Alaska Airlines Set to Acquire Hawaiian Airlines

Alaska Airlines has made a groundbreaking announcement in the aviation world by agreeing to acquire Hawaiian Airlines for an impressive $1.9 billion.

The Deal at a Glance

• Continuation of Brands: In this acquisition, Hawaiian Airlines will maintain its distinct brand identity, coexisting with Alaska Airlines. A significant aspect of this merger will be the integration of a unified operating platform and a cohesive loyalty program.
• Commitment to Hawai’i: Emphasizing its dedication, Alaska Airlines plans to expand services for Hawai’i residents. The focus will also be on sustaining and increasing union-represented employment opportunities in the Hawaiian Islands.
• Expanded Destinations: The merger promises enhanced travel options for guests, featuring a combined network of 138 destinations, including direct flights to 29 international locations like Tokyo, Seoul, Sydney, and Auckland. Furthermore, through the Oneworld Alliance, over 1,200 global destinations will become accessible. The merger will boast a fleet comprising of 365 narrow- and wide-body aircraft.

The Approval Process

• Time Frame: The completion of this acquisition is anticipated to take 12 to 18 months. During this time, both airlines will operate as usual.

Editorial Perspective: Cautiously Optimistic

• Uncertain Outcome: Although the deal is promising, it is not yet sealed. The Justice Department has historically been skeptical of airline mergers, often blocking such attempts (See JetBlue sued to block Spirit acquisition and JetBlue and American Airlines Partnership).
• Possible caveat: The rumor is that Hawaiian Airlines is currently facing financial challenges that could make this acquisition more feasible. The Justice Department might be more willing to okay the merger if it will save Hawaiian Airlines from bankruptcy.

Questions I have about this deal

1. Aircraft Management: Post-acquisition, will Alaska Airlines phase out Hawaiian Airlines’ Airbus fleet, similar to their strategy with Virgin America? Alaska Airlines has traditionally operated a Boeing-only fleet.
2. Mileage Plan Future: Will Alaska Airlines retain its distance-based mileage plan after the merger? They are one of the only remaining airlines that still operate this way. With more international destinations, their mileage plan would increase in value for flyers.
3. Credit Card Benefits: The potential addition of Hawaiian Airlines’ routes could significantly enhance the Alaska Airlines Visa Card offerings. For instance, the companion pass, especially for flights from Seattle to international destinations like Tokyo or Seoul, could become an even more attractive perk.

As a frequent Alaska Airlines flyer, I am excited about this deal. It positions Alaska Airlines to become a stronger competitor against major airlines like Delta, United, and American Airlines, potentially reshaping the airline industry landscape.