Alaska Airlines has announced its intention to buy Hawaiian Airlines in a deal valued at $1.9 billion.
The merged entity will retain both the Alaska Airlines and Hawaiian Airlines brands but will operate on a single platform, the company said in a press release. The combined airline will serve 138 destinations, including offering nonstop flights to various airports in the Americas, Asia, Australia, and the South Pacific.
For Hawaii residents, the combined company will provide three times the current number of destinations from the state to North American destinations, with nonstop or single-connection options.
Hawaiian Airlines’ President and CEO, Peter Ingram, expressed his views on the acquisition, stating, “In Alaska Airlines, we are joining an airline that has long served Hawaii, and has a complementary network and a shared culture of service.” His comments were included in the news release.
The deal is expected to undergo thorough scrutiny by federal regulators, particularly in light of the Justice Department’s recent focus on enforcing antitrust laws to maintain competition in various industries, including aviation, under the Biden administration.
This move comes in the wake of the department’s successful efforts to prevent a partnership between American Airlines and JetBlue Airways in New York and Boston last year. Additionally, the department is currently involved in a lawsuit to halt JetBlue’s acquisition of Spirit Airlines, with a federal trial expected to conclude shortly.
If the Spirit acquisition is approved, JetBlue’s growth in the market is anticipated to surpass 10 percent. Meanwhile, if Alaska’s purchase of Hawaiian gets the green light, the combined company would control slightly over 8 percent of the market.
The U.S. airline industry is largely dominated by four major carriers — Delta Air Lines, American Airlines, Southwest Airlines, and United Airlines — all of which expanded through mergers. According to federal data, United, the fourth-largest carrier, holds approximately 16 percent of the market, while Alaska and JetBlue follow with 6.4 percent and 5.5 percent, respectively.
Several unions representing thousands of employees at both Alaska and Hawaiian, such as flight attendants, office workers, and airport personnel, have expressed their commitment to collaborating with the airlines to ensure that employees benefit from the merger.
The Association of Flight Attendants, representing 9,000 workers from both Alaska and Hawaiian, along with thousands more from several other carriers, emphasized the need to prioritize the improvement of conditions for flight attendants as a key factor in their support for the merger.
There is minimal overlap in the services offered by both airlines, with Alaska and Hawaiian only competing on approximately 3 percent of their collective routes, accounting for about 6.7 percent of the seats flown over the past year, according to Cirium, an aviation data provider.
