The planned merger between Alaska Airlines and Hawaiian Airlines took a decisive step closer to completion this week after the U.S. Department of Justice (DOJ) completed its regulatory investigation into the merger.
Alaska Airlines’ historic acquisition of Hawaiian was originally announced in December 2023 and is expected to be valued at approximately $1.9 billion. If completed, the merger would significantly expand Alaska’s operations and cement its position as the fifth-largest airline in the United States.
After the mutual confirmation of the merger intentions, the US Department of Justice began a thorough review process. The review period was originally scheduled to be completed on August 15, but it was extended to August 19 due to concerns that the deal could potentially be blocked.
However, the review period passed without objections from the US Department of Justice, meaning one of the biggest hurdles for the deal has been overcome.
Competition concerns in Hawaii
One of the biggest concerns surrounding the merger is what effect it will have on competition among consumers, particularly in Hawaii. Currently, inter-island flights in Hawaii are dominated by Hawaiian Airlines, although it faces strong competition from low-cost carrier Southwest Airlines.
Photo: Courtesy of Alaska Airlines
Meanwhile, Hawaiian has a similar market share to United Airlines for flights to the mainland, but the Hawaiian and Alaska networks would have around 40 percent market share.
The U.S. Department of Justice and the Biden administration have a history of taking a tough stance on major merger deals that could potentially harm competition. Earlier this year, the department blocked JetBlue’s planned $3.8 billion acquisition of Spirit Airlines on the grounds that JetBlue would change Spirit’s ultra-low-cost model, thereby raising airfares for consumers.
Other concerns surrounding Alaska’s proposed acquisition of Hawaiian include the impact on employees and the brand. However, Alaska Airlines has long insisted that if acquired, it will continue to operate flights under the Hawaiian Airlines brand and retain all employees while improving connections within, to and from the islands.
Alaska has confirmed that there are still some hurdles to overcome with the merger, including approval from the U.S. Department of Transportation (DOT), but it is confident the deal will go through. If approved, the two airlines will combine their networks and serve over 130 destinations in the U.S., Japan, South Korea, Australia and New Zealand.
Photo: Courtesy of Christian Brinkmann / Airbus
“This is an important milestone in the process of joining our airlines,” Alaska Airlines said. “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 Hawaii 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 proposed merger remains subject to customary closing conditions, including approval of a preliminary waiver application by the U.S. Department of Transportation (DOT). After that step, we will complete work to close the transaction and move forward with integrating the two companies, bringing Hawaiian Airlines guests and employees into the Alaska Air Group and expanding benefits and choices for consumers throughout Hawaii, the Asia Pacific region, the continental United States and around the world.”
Hawaii Governor Josh Green added: “Over the past few months, my administration and I have worked with Alaska Airlines leadership to carefully consider the potential impacts of consolidation. We have insisted that any changes expand travel options for our citizens and preserve union jobs.
Photo: Courtesy of Alaska Airlines
“Alaska has reaffirmed its commitment to our state and will uphold the Hawaiian Airlines brand, preserve and grow union jobs in our Hawaii, and continue to provide essential passenger and air cargo service to, from and within the islands.
“The merger will significantly increase the number of destinations across North America that Hawaiian 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.”
