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Hawaiian Airlines and Alaska Airlines are the latest U.S. airlines to seek a merger.
The airlines have cleared a regulatory hurdle at the Department of Justice and are now waiting for approval of a preliminary exemption request from the Department of Transportation.
JetBlue and Spirit had similar intentions, but those plans fell through earlier this year after a federal judge blocked the $3.8 billion deal on antitrust grounds.
Merger of Alaska Airlines and Hawaiian Airlines overcomes regulatory hurdle and is now being reviewed by the US Department of Transportation
Clint Henderson, editor in chief of The Points Guy, told FOX Business it was surprising that the Justice Department allowed this merger to go ahead, given that mergers and acquisitions in the industry face heavy scrutiny from regulators.
A Hawaiian Airlines aircraft takes off next to an Alaska Airlines aircraft at Los Angeles International Airport in Los Angeles, California on December 5, 2023. (Eric Thayer/Bloomberg via Getty Images / Getty Images)
However, “although in this case both airlines play a major role in the market between Hawaii and the mainland, there is still a lot of competition there, including from Southwest, Delta, American and United,” Henderson said, adding, “This is unlikely to be as anti-competitive as a merger between larger operators.”
Katy Nastro, spokeswoman for booking site Going.com, also explained that this merger would be less disruptive to the overall market than a merger between JetBlue and Spirit would have been.
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“If the Justice Department allowed the merger of JetBlue and Spirit, there would be one less ultra-low-cost airline helping to lower prices,” Nastro said.
What impact could this have on travelers?
Alaska and Hawaiian argued that the proposed merger would expand benefits and choices for consumers in Hawaii, the Asia-Pacific region, the continental United States and around the world.
In general, competition is the “biggest single reason for low-cost flights”.
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According to Nastro, a “merger of two airlines – whose route networks partially overlap – would not lead to more low-cost flights for consumers, but to some extent to fewer.”
A Hawaiian Airlines Airbus A330 taxis at Daniel K. Inouye International Airport in Honolulu, Hawaii on January 20, 2024. (Photo by Kevin Carter/Getty Images / Getty Images)
However, Henderson does not believe this will have a major impact on prices as there is a lot of competition in the markets where Hawaiian operates.
“Alaska also doesn’t operate inter-island flights, so it’s not a competitor. It’s primarily Southwest and Hawaiian that operate inter-island flights,” Henderson said, adding that unions, airline employees and the state of Hawaii viewed the merger quite positively.
| ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ALCOHOL | Companies starting with ALASKA | 34.96 | +0.18 |
+0.52% |
| HA | Companies starting with HAWAIIAN | 17.68 | +1.80 |
+11.34% |
Henderson noted that overall demand in Hawaii has declined and several airlines are currently offering special offers.
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If the two airlines merge, Nastro and Henderson say Hawaii’s frequent flyers would be the real winners.
““Hawaii miles become much more valuable when combined with Alaska as part of the Oneworld alliance,” said Nastro. “This addition now opens up many redemption and earning opportunities with Oneworld partners,” such as British Airways and Iberia.
