The planned merger between Alaska Airlines and Hawaiian Airlines has cleared a significant regulatory hurdle, signaling a major change in the U.S. airline industry.
The U.S. Department of Justice has approved the proposed $2 billion deal, taking a crucial step in the first major airline merger in nearly a decade.
The merger, which is expected to expand travel from Hawaii to the mainland U.S. and expand Alaska Airlines’ international presence, has been under intense scrutiny, but the U.S. Department of Justice’s decision not to file a lawsuit challenging the merger before the deadline is a sign that the airlines have the green light to move forward with the merger.
“This is an important milestone for both companies and for travelers who will benefit from improved service options and increased competition,” said Alaska Airlines in a statement released late Monday.
Fusion expands travel opportunities in the US and abroad
The merger is seen as a strategic move in an environment where four major airlines—American, Delta, Southwest and United-dominate 80% of the marketThrough the merger, Alaska and Hawaiian Airlines hope to offer travelers a more competitive alternative, especially on routes between Hawaii and the U.S. mainland.
The merger is also intended to strengthen Alaska Airlines’ international activities, a step that new routes and destinations for world travelers.
Waiting for further approvals
Although the lack of opposition from the Justice Department is a major victory for both airlines, the deal is not yet finalized. The merger still needs to be approved by the U.S. Department of Transportation, a process that Alaska Airlines is optimistic about.
The announcement of the Justice Department’s decision came as a surprise to some industry analysts, as the Biden administration had previously pledged to closely scrutinize mergers in already concentrated industries. However, the Justice Department’s failure to intervene suggests that the current administration may pursue a different regulatory strategy for airline mergers.
Governor of Hawaii, Josh Green welcomed the news and stated: “This merger will strengthen our connections to the mainland and beyond and ensure Hawaii remains a premier destination for travelers from around the world.”
The merger, originally announced in December, has been under review since February. The airlines have extended their deadline for a decision until mid-August. With the approval of the US Department of Justice, the path forward now seems clearer than ever.
A new era for US airlines?
As Alaska and Hawaiian Airlines move ever closer to merging, the U.S. airline industry may be seeing a shift in competitive dynamics. With the potential to challenge the big four airlines, this merger could offer travelers more choice and better service in the near future.
As the approval process continues, travelers and industry observers alike will be curious to see how this new partnership develops and what it means for the future of air travel in the United States and elsewhere.
