Alaska Airlines Plans to Buy Hawaiian Airlines in $1.9 Billion Deal
Alaska Airlines on Sunday announced plans to acquire Hawaiian Airlines in a $1.9 billion deal.
The combined airline will maintain the Alaska Airlines and Hawaiian Airlines brands but with a single operating platform, Alaska Airlines said in a news release. The company would provide service to 138 destinations, including nonstop flights to airports in the Americas, Asia, Australia and the South Pacific.
For residents in Hawaii, the company would offer three times the current number of destinations from the state to destinations throughout North America, either nonstop or with one connection.
“In Alaska Airlines, we are joining an airline that has long served Hawaii, and has a complementary network and a shared culture of service,” Peter Ingram, president and chief executive of Hawaiian Airlines, was quoted as saying in the news release.
The deal is likely to face close scrutiny by federal regulators. The Justice Department has aggressively enforced antitrust laws under President Biden, suing to prevent mergers, acquisitions and other deals that could decrease competition in various industries, including aviation.
Last year, the department successfully sued to prevent a partnership between American Airlines and JetBlue Airways in New York and Boston. It is also currently suing to stop JetBlue from buying Spirit Airlines. A federal trial over that lawsuit is expected to wrap up this week, with closing arguments scheduled for Tuesday.
The Spirit acquisition is expected to deliver the rapid growth that has eluded JetBlue in recent years. In 2016, JetBlue lost a bidding war with Alaska for Virgin America.
The airline industry in the United States is dominated by four carriers — Delta Air Lines, American Airlines, Southwest Airlines and United Airlines — all of which achieved their size with the help of mergers. United, the fourth-largest carrier, controls about 16 percent of the market, according to federal data. Alaska is the fifth-largest carrier, with 6.4 percent, followed by JetBlue, with 5.5 percent.
If the Spirit sale is allowed to proceed, JetBlue will grow to control more than 10 percent of the market. If Alaska is allowed to buy Hawaiian, the combined company will control just over 8 percent of the market.
Unions representing thousands of workers at both Alaska and Hawaiian, including flight attendants, office workers, airport workers and other employees, said they would work closely with the airlines to make sure that workers benefited from the merger.
“Our first priority is to determine whether this merger will improve conditions for flight attendants just like the benefits the companies have described for shareholders and consumers,” the Association of Flight Attendants, which represents 9,000 Alaska and Hawaiian workers, in addition to thousands more at several other carriers, said in a statement. “Our support of the merger will depend on this.”
There is relatively little overlap in the service that the airlines provide. Alaska and Hawaiian only compete on about 3 percent of the routes that they collectively offer. Those routes, which connect airports in Hawaii with those in major West Coast cities, represent about 6.7 percent of the seats the airlines collectively flew over the past year, according to Cirium, an aviation data provider.
