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Aloha? Alaska Airlines Plans to Acquire Hawaiian

Alaska Airlines plans to acquire Hawaiian Airlines, the two U.S. carriers announced on Sunday, a surprising and unusual deal that would keep both airline brands running – at least in name.

Alaska's takeover of the 50th state's hometown airline rings in at $1.9 billion, including assuming nearly $1 billion of Hawaiian's debt. But in a drastic departure from the airline buyout playbook – including Alaska's recent acquisition of Virgin America – the two carriers said both Alaska and Hawaiian planes would continue flying. Behind the scenes, though, Alaska Airlines would call the shots, operating the two airlines under one umbrella – and its popular Mileage Plan program would take over for the pair of carriers.

Combined, the two airlines could strengthen Alaska's dominance in Seattle (SEA) while expanding to a second hub in Honolulu (HNL) and even give Alaska Airlines a long-haul international presence. In addition to flying between the islands and out to the mainland, Hawaiian flies to several destinations throughout Asia, Australia, and the rest of Oceania.

“This combination is an exciting next step in our collective journey to provide a better travel experience for our guests and expand options for West Coast and Hawai‘i travelers,” Alaska CEO Ben Minicucci said in a news release. We look forward to deepening this stewardship as our airlines come together while providing unmatched value to customers, employees, communities, and owners.”
 

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Alaska & Hawaiian's combined route map, courtesy of Alaska Airlines

While the airlines spun their merger as a win for themselves and travelers alike, the deal could be challenged by federal regulators. They've done it before.

The Department of Justice (DOJ) forced JetBlue and American to give up on their partnership in the Northeast. JetBlue is still defending its proposed acquisition of Spirit in federal court after the DOJ sued to block it, arguing that it would effectively eliminate one of the nation's largest low-cost carriers, reducing competition and raising fares for Americans.

As of Monday morning, federal regulators had not weighed in on the proposed Alaska-Hawaiian deal. If it moves ahead, the two carriers combined would be the nation's fifth-largest airline – or the sixth-largest, if JetBlue and Spirit are allowed to merge.
 

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Mergers and acquisitions are commonplace in the airline industry after times of crisis like the aftermath of the Sept. 11 attacks and the 2008 recession, but no crisis was greater than the COVID-19 pandemic.

Hawaiian Airlines has been ripe for a takeover, struggling to recover not just from the pandemic but also Maui wildfires that hurt travel demand and Southwest's steady expansion in Hawaii. Hawaiian's stock has lost more than 50% of its value in 2023 alone.

For Alaska and its customers, buying Hawaiian Airlines is an elegant way to expand: While the airline is a household name in Seattle, it's not big enough to compete with the likes of American, Delta, or United elsewhere.

It also gives the combined airline widebody planes like Airbus A330s and Hawaiian's incoming Boeing 787 Dreamliners, giving Alaska an international presence (and lie-flat business class seats) that it currently lacks. In its release, Alaska hinted at its plan to turn Honolulu into a “strategic hub,” allowing travelers from the West Coast to connect through Hawaii and onward to Japan, Australia, New Zealand, and beyond.

The combined airlines would remain part of the Oneworld alliance, which Alaska joined in 2021 with the likes of American Airlines, Qatar Airways, Japan Airlines, and more.

It's Alaska's second crack at an airline takeover in less than a decade … and its last acquisition looked much different than what it's proposing with Hawaiian. Alaska swallowed Virgin America back in 2018, assuming that beloved carriers' fleet and presence in California. Within just a few years, any trace of Virgin America was virtually eliminated.

In Hawaii, state officials have made clear they won't let that happen with Hawaiian.

“The Attorney General and I will be monitoring the merger/acquisition very closely,” Hawaii Gov. Josh Green wrote on X, formerly known as Twitter, as news of the deal spread. “Both Alaska Airlines and Hawaiian Airlines are very high quality companies, but ultimately, I will be watching to make sure all of our state’s needs are met and all of our workers are cared for.”

Minicucci from Alaska repeatedly assured investors on Sunday that the Hawaiian brand isn't going anywhere.

“The culture element is so important that we decided early on that the Hawaiian Airlines brand will remain, not only in name but also in the distinctive branding at airports,” the CEO said, according to Hawaii News Now. “This is a departure from what the industry does. We need to respect the culture and legacy that’s been created here.”

 

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