The antitrust authority in the US Department of Justice will not challenge the planned takeover of Hawaiian Airlines by Alaska Airlines as anti-competitive.
The merger review period ended on Tuesday without action. The two airlines will now work to close the $1.9 billion deal.
“This is an important milestone in the process of joining our airlines,” Alaska Airlines said in a statement. “During the Department of Justice’s review, Alaska worked closely with the Hawaii Attorney General to reaffirm and expand our commitments to the future of Hawaiian Airlines and Hawaiian consumers. This includes plans to maintain the Hawaiian Airlines brand and local jobs, and to continue to provide strong service between, to and from the islands.”
The airline noted that it still needs to clear other regulatory hurdles and closing conditions before the deal can be finalized. Specifically, the airlines must obtain preliminary approval from the Department of Transportation to operate under common ownership while they await final approval for Hawaiian to transfer its authority for international routes to Alaska and while they integrate their operations into a single operating license.
Under the merger agreement, Alaska intends to retain the Hawaiian Airlines brand as a symbol of Hawaii’s strength and otherwise continue to operate the two airlines as a merged airline with centralized flight scheduling, a single loyalty program and interchangeable aircraft.
Alaska will buy Hawaiian for $18 per share. The $1.9 billion price includes $900 million of Hawaiian Airlines’ debt.
Under the Biden administration, the Justice Department has taken a skeptical stance toward airline mergers. The department successfully sued to block JetBlue’s acquisition of Spirit Airlines and succeeded in breaking up a close alliance between American and JetBlue in the New York and Boston areas.
However, the Alaska-Hawaii merger received important support from the Hawaiian government. The proposal also likely benefited from the limited overlap between the two airlines’ networks. Alaska and Hawaiian compete in only 12 markets.
Hawaii Governor Josh Green said Tuesday he looked forward to the merger moving forward, stressing that it would result in “overwhelming benefits for consumers, workers and the community.”
“The merger will dramatically increase the number of destinations across North America that Hawaii residents can reach nonstop or with a stopover from the islands. HawaiianMiles members will retain the value of their miles while gaining access to more destinations around the world,” Green said.
