Alaska Airline finalizes a $1.9 billion purchase of Hawaiian Airlines
On Wednesday, Alaska Airlines announced the completion of its $1.9 billion purchase of Hawaiian Airlines, having secured approval from the U.S. Department of Transportation.
The two airlines agreed on Tuesday to preserve important Hawaiian routes and implement consumer safeguards, under a six-year arrangement.
In August, the Justice Department decided against impeding the announced December merger between Alaska, the fifth-largest U.S. domestic airline, and Hawaiian, the 10th-largest carrier.
Alaska's CEO, Ben Minicucci, stated in an interview that the merger would boost competition and consumer benefits, while increasing consumer access to both networks and providing Alaska with access to Hawaiian's large-body aircraft fleet.
"It's just a few more tools in our toolkit for deploying planes across our entire network," Minicucci said. "Placing the correct plane in the appropriate market to generate the best results for the collective entity."
Minicucci predicted that the airline would achieve at least $235 million in year-three operational savings.
Under President Joe Biden, the Justice Department has been active in obstructing airline consolidation. In March, JetBlue Airways and Spirit Airlines terminated their $3.8 billion merger plan due to a U.S. judge blocking the deal on antitrust grounds, following a lawsuit from the Justice Department.
The agency also disputed American and JetBlue's 2020 joint venture, the "Northeast Alliance," for flights to and from New York City and Boston.
Alaska and Hawaiian agreed, under the watchful eye of the Transportation Department, to safeguard the worth of frequent flyer rewards, maintain existing service on important Hawaiian routes to the continental U.S. and inter-island regions, ensure competitive access at the Honolulu airport, and offer travel credits or frequent flyer miles for disruptions caused by the airline itself.
Hawaiian Airlines' stock will be removed from the Nasdaq on Wednesday, according to Alaska's statement, and the combined entity will continue to trade under the ALK symbol on the New York Stock Exchange.
The merger between Alaska and Hawaiian will contribute to increased competition in the business sector, as mentioned by Alaska's CEO. This is expected to bring consumer benefits and improve access to both airlines' networks.
Under the six-year arrangement, Alaska and Hawaiian have agreed to preserve important Hawaiian routes, which is beneficial for the business operations and consumer service.
