The planned merger between Alaska Airlines and Hawaiian Airlines marks a potential turning point in the US aviation industry. With a volume of 1.9 billion US dollars, this merger is intended to unite two of the country’s most important airlines under one roof. But the transaction, announced on December 2nd last year, is under intense scrutiny by regulators and is being closely watched by the public and politicians. While supporters of the merger hope for synergies and improved service for consumers, there are also critical voices who fear a monopolization of the market and negative effects on prices.
The U.S. Department of Transportation (DOT) and the Department of Justice (DOJ) play a critical role in evaluating this merger. The DOT recently announced that it is now reviewing the transfer application and will only grant its approval if the merger is in the public interest. This statement underscores the importance of the merger for the entire aviation market and consumers, especially in Hawaii, where Hawaiian Airlines plays a central role in regional air travel.
The Justice Department had previously extended its review of the planned merger three times, postponing the decision until August 20. The delays show how intensively the legal and economic aspects of this merger are being investigated. After all, this deal is not just about the merger of two companies, but also about the effects on competition, prices and jobs.
The state of Hawaii is also a key player in this process. Governor Josh Green described the end of the review period as an “important milestone” and underlined the importance of the merger for the region. Hawaiian Airlines is of outstanding importance for Hawaii because the airline plays an important role in connecting the islands and the connections to the mainland.
The perspectives of the airlines involved
Alaska Airlines and Hawaiian Airlines have repeatedly stressed in their statements that the merger will be beneficial to both customers and employees. Alaska Airlines emphasized that it will preserve the Hawaiian Airlines brand, protect local jobs, and promise strong service between the islands and the mainland. These promises are critical to addressing public and policymaker concerns. As part of the proposed merger, Alaska Airlines will assume $900 million of Hawaiian Airlines’ debt, indicating a significant financial commitment by Alaska Airlines aimed at long-term success. Despite the merger, both airlines will retain their existing brands, indicating a strategy to preserve the diversity and heritage of the Hawaiian Airlines brand while creating operational synergies.
Judicial hurdles and the path to approval
In addition to regulatory scrutiny, the merger also had to survive a legal challenge. A US court recently dismissed a lawsuit brought by consumers seeking to block the takeover. This is an important victory for the airlines involved, as it removes one of the legal hurdles. The consumer lawsuit was likely based on concerns about potential negative effects on competition and airfares, showing that public perceptions of the merger are mixed.
Now, the final implementation of the merger depends on the approval of the temporary exemption application by the U.S. Department of Transportation, which Alaska and Hawaiian Airlines have jointly submitted. This application is crucial because it sets the legal framework for the integration of the two companies and ensures that the merger complies with applicable regulations.
Market impact and future developments
The merger of Alaska Airlines and Hawaiian Airlines could have far-reaching effects on the US aviation market. By combining their forces, the two airlines could strengthen their market position and increase their operational efficiency. This could have a positive effect on ticket prices and service, especially on routes between the Hawaiian Islands and the US mainland.
However, there could also be negative consequences. Critics fear that market concentration could lead to less competition and thus prices could rise in the long term. In addition, smaller, independent airlines could come under pressure as they may not be able to compete with the combined offering of Alaska and Hawaiian Airlines.
Another aspect that must be taken into account when considering this merger is the geopolitical situation. Hawaii is a strategically important point in the Pacific and is of great importance to the USA. A strong presence of a merged airline could improve the connectivity of the islands and thus also strengthen the regional economy.
