US DoT Approves Alaska Airlines and Hawaiian Airlines Merger

The U.S. Department of Transportation (DOT) has granted Alaska Airlines and Hawaiian Airlines the green light to proceed with their planned $1.9 billion merger. This significant step follows the U.S. Justice Department’s review last month, which cleared the merger from an antitrust perspective. However, the DOT has outlined several conditions that both carriers must adhere to during the merger process.

Among the primary requirements, the airlines must maintain the integrity of their existing loyalty programs—HawaiianMiles and Alaska Mileage Plan. Specifically, the DOT mandates that any miles earned prior to the establishment of a new, combined loyalty point system must not expire. Additionally, members should be able to transfer their miles at a 1-to-1 ratio, ensuring that customers do not lose value during the transition.

In a commitment to service equity, the airlines are also required to preserve essential air support for rural areas and maintain current service levels for both passenger and cargo routes operating between the Hawaiian islands. U.S. Secretary of Transportation Pete Buttigieg emphasized the importance of these provisions during a press call, highlighting the need for continued service to underserved regions.

While the DOT has allowed the airlines to begin the merger process, they still need to obtain approval for a transfer application. This application is crucial as it permits the airlines to combine and operate international routes under a single operating certificate.

In response to the DOT’s announcement, Alaska Airlines indicated it would establish an interim transition team to oversee the merger’s execution. Joe Sprague, currently serving as the regional president of Alaska Airlines for Hawaii, has been appointed as the CEO of Hawaiian Airlines post-transaction. This leadership transition will remain in place until the Federal Aviation Administration (FAA) process is completed.

Following the DOT’s approval, Hawaiian Airlines’ stock experienced a nearly 4% increase, reflecting investor confidence in the merger’s potential benefits.

When the merger was initially announced in December, both airlines stated their intention to retain their individual brands while operating on a unified platform. Together, they aim to create a robust fleet of over 360 aircraft serving more than 130 destinations.

The merger also includes specific operational improvements. Hawaiian Airlines will adopt several practices from Alaska Airlines, including guaranteeing family seating at no additional fee and providing compensation in cases of significant flight delays or cancellations. These enhancements are aimed at improving customer experience and aligning operational standards across the newly formed entity.

As Alaska Airlines and Hawaiian Airlines move forward with their merger plans, the focus will be on integrating operations while ensuring that customer loyalty and service quality remain top priorities. The successful completion of this merger is expected to create a stronger airline capable of better serving its customers across both domestic and international routes. The upcoming months will be critical as both airlines work to finalize the merger and prepare for a new chapter in their operational journey.

Sources: AirGuide Business airguide.info, bing.com, cnbc.com