Alaska Airlines and Hawaiian Airlines Move Closer to Historic Merger
The proposed $1.9 billion merger between Alaska Airlines and Hawaiian Airlines is making significant progress, bringing the two U.S. carriers closer to finalizing what would be the largest industry merger in recent years.
On Monday evening, Alaska Airlines announced that the Department of Justice (DOJ) has completed its review of the merger without filing a lawsuit to block the deal. This clears a major hurdle for the merger, which now awaits approval from the U.S. Department of Transportation to proceed. The DOJ’s decision follows an extended review period, which had previously raised concerns about potential regulatory obstacles.
Merger’s Impact on the Industry
The merger, valued at $1.9 billion, would be the largest consolidation of U.S. carriers since Alaska Airlines’ acquisition of Virgin America in 2016, a deal valued at $2.6 billion. If approved, the Alaska-Hawaiian Airlines merger would reshape the competitive landscape of the industry.
Alaska Airlines highlighted the merger as a pivotal moment, stating, “This is a significant milestone in the process to join our airlines.” The airline emphasized its collaboration with Hawaii’s attorney general to address concerns and enhance commitments to Hawaiian Airlines and its customers.
Support and Benefits for Hawaii
Hawaii Governor Josh Green has expressed strong support for the merger, citing its potential benefits for residents and the local economy. According to Governor Green, the merger would “vastly expand” the number of North American destinations available to Hawaii’s residents, while also preserving and creating union jobs. He is optimistic that the merged entity will foster increased competition within the industry.
Market Reactions and Stock Performance
The announcement has had a positive impact on stock prices. Hawaiian Airlines’ shares saw an increase of more than 11% in pre-market trading on Tuesday, bringing its year-to-date gains to 13%. In contrast, Alaska Air Group’s stock rose nearly 1% in pre-market trading, though it remains down almost 9% for the year.
Regulatory Challenges Ahead
Last month, there were concerns that the DOJ might block the merger after extending its review period. This followed the DOJ’s earlier move to prevent the $3.8 billion merger between Spirit Airlines and JetBlue Airways, which would have combined the U.S.’s sixth- and seventh-largest carriers. As the fifth-largest airline in the nation, Alaska Airlines’ merger with Hawaiian Airlines remains under close scrutiny.
As the merger progresses, the final approval from the Transportation Department remains a crucial step. Both airlines are poised to enhance their market positions and improve service offerings for travelers. The merger promises to be a transformative event in the U.S. airline industry, with potential long-term benefits for consumers and the broader aviation market.
Sources: AirGuide Business airguide.info, bing.com, qz.com