Alaska Airlines has announced that its plan to acquire Hawaiian Airlines has received clearance from the U.S. Justice Department, marking a significant milestone in the merger process. The deal, which was announced eight months ago and is valued at $1.9 billion, will create the largest merger of U.S. carriers since Alaska’s merger with Virgin America in 2015.
The U.S. Justice Department’s investigation into the proposed combination of Alaska Airlines and Hawaiian Airlines has now concluded, with no lawsuit filed to block the deal. This paves the way for the two carriers to seek approval from the U.S. Transportation Department before the merger can be finalized. The exact timeline for this approval process remains uncertain.
This development comes on the heels of the DOJ’s successful court ruling in January, which blocked JetBlue Airways’ acquisition of Spirit Airlines. The regulatory scrutiny faced by airlines seeking to merge has been increasing in recent years, with the DOJ also winning a suit last year that undid a partnership between JetBlue and American Airlines. These cases highlight the rigorous antitrust scrutiny that airline mergers are subject to.
Hawaiian Airlines has encountered various challenges leading up to the merger announcement. The company faced setbacks such as the Maui wildfires, heightened competition from Southwest Airlines, and the slower recovery of travel to and from Asia due to the ongoing Covid-19 pandemic. As a result, Hawaiian has experienced net losses in most quarters since the beginning of 2020. However, executives have expressed optimism about improving booking trends, which has led to a nearly 12% increase in the company’s shares this quarter, while other airlines have seen their share prices decline.
Under the terms of the merger, both Alaska Airlines and Hawaiian Airlines will retain their respective brands while operating under a single platform. The combined fleet will consist of over 360 airplanes, serving more than 130 destinations. This strategic move aims to leverage the strengths of both carriers and enhance their competitive position in the market.
The response from the Justice Department and Transportation Department regarding this latest development has yet to be provided. Their input will be crucial in determining the final outcome of the merger. In the meantime, industry observers will be closely monitoring the progress of the deal and its potential impact on the broader airline industry.
Overall, the clearance from the U.S. Justice Department represents a significant step forward for Alaska Airlines and Hawaiian Airlines in their quest to merge. The successful completion of the merger would not only create a major player in the U.S. airline industry but also signal the continued consolidation trend within the sector. As the aviation industry continues to navigate the challenges posed by the pandemic and evolving market dynamics, strategic mergers and partnerships may prove essential for airlines to stay competitive and ensure long-term sustainability.
