Alaska Airlines cleared a major hurdle this week: the Justice Department and its planned merger with Hawaiian Airlines. The Justice Department’s regulatory approval is a huge step.
Now the merger still has to be approved by the US Department of Transportation. My genuine joy about this should not be confused with cynicism. I do, however, have one question.
Why? Why was this merger allowed to go ahead while the proposed merger between JetBlue Airways and Spirit Airlines was blocked?
“The deadline for the U.S. Department of Justice (DOJ) to complete its regulatory investigation of the proposed merger of Alaska Airlines and Hawaiian Airlines under the HSR Act has passed,” Alaska said in a statement. “This is an important milestone in the process of merging our airlines.”
Alaska Airlines’ statement continued:
“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. These include 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 other customary closing conditions, including approval of a temporary waiver request 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, welcoming Hawaiian Airlines guests and employees to 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.”
A bad precedent?
I have no doubt that the two airlines will merge seamlessly. We are talking about two exceptionally well-run companies, but the nagging question still remains.
Why?
Why this merger? Why this merger when just eight months ago the federal government went to court to block the proposed merger between JetBlue and Spirit? Legal experts, government officials and aviation experts will tell you that this is all about monopolies and competition.
A merger with JetBlue would deprive customers of a competitive alternative in the market. Alaska and Hawaiian have two different cultures and very few overlapping routes.
I understand the logic. I may not like it, but I understand it.
But using the same thinking, you say McDonald’s and Burger King could never merge, or Coca-Cola with Pepsi, because there would be little to no competition for consumers. You can’t tell a company how to run its business. But the Biden administration has already shown that it is very anti-business.
Frankly, it sets a bad precedent to approve one merger and reject another.
Subscribe to the TravelPulse daily newsletter to receive the latest travel news, updates and offers.
