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Thursday,  February 29, 2024 11:35 AM 

Alaska Air to buy rival Hawaiian Airlines for $1.9 billion

  • Air
  •   12-03-2023  5:01 pm
  •   Pax Global Media

Alaska Air to buy rival Hawaiian Airlines for $1.9 billion
Alaska Airlines has agreed to buy Hawaiian Airlines for $1.9 billion. (Alaska Airlines)
Pax Global Media

Alaska Airlines has agreed to buy its smaller rival Hawaiian Airlines for $1.9 billion, the airline announced on Sunday (Dec. 3).

The definitive acquisition was the culmination of “several months” of negotiations, according to Alaska Airlines’ CEO Ben Minicucci, as reported by CNN.

The deal will also include $900 million in Hawaiian Airlines debt, which the airlines' says will brings the acquisition’s total value to $1.9 billion.

According to a press release, the transaction agreement has been approved by both boards.

The acquisition is conditioned on required regulatory approvals, approval by Hawaiian Holdings, Inc. shareholders (which is expected to be sought in the first quarter of 2024), and other conditions.

Alaska Airlines says it expects the takeover to close in 12-18 months.

"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 travellers,” stated Minicucci on Sunday.  

"We have a longstanding and deep respect for Hawaiian Airlines, for their role as a top employer in Hawai'i, and for how their brand and people carry the warm culture of aloha around the globe. Our two airlines are powered by incredible employees, with 90+ year legacies and values grounded in caring for the special places and people that we serve.”

“I am grateful to the more than 23,000 Alaska Airlines employees who are proud to have served Hawai'i for over 16 years, and we are fully committed to investing in the communities of Hawai'i and maintaining robust Neighbour Island service that Hawaiian Airlines travellers have come to expect.”

“We look forward to deepening this stewardship as our airlines come together, while providing unmatched value to customers, employees, communities and owners."

The acquisition will see both companies keep their brands, a decision Minicucci and Hawaiian Airlines CEO and President Peter Ingram says was made out of respect for the nearly 100-year legacy of the two airlines and the communities they serve.

Both states are “uniquely reliant upon air travel,” Alaska Airlines said in their news release.

The airline currently serves 19 cities, many of which are not connected by roads.

The merger will also shape Honolulu into the company’s second-largest hub, “enabling greater international connectivity for West Coast travellers throughout the Asia-Pacific region with one-stop service through Hawaii,” according to the press release.

“With the additional scale and resources that this transaction with Alaska Airlines brings, we will be able to accelerate investments in our guest experience and technology, while maintaining the Hawaiian Airlines brand,” stated Peter Ingram.

“We are also pleased to deliver significant, immediate and compelling value to our shareholders through this all-cash transaction. Together, Hawaiian Airlines and Alaska Airlines can bring our authentic brands of hospitality to more of the world while continuing to serve our valued local communities."

Alaska Airlines’ fleet will grow from about 300 to 365 planes, and serve 138 destinations, including “non-stop service to 29 top international destinations in the Americas, Asia, Australia and the South Pacific,” the company stated.

Hawaiian Airlines’ loyalty customers, meanwhile, will have access to improved loyalty benefits, such as lounge access, an enhanced credit card loyalty program and the ability to earn and redeem more miles.

The combined organization will be based in Seattle under the leadership of Alaska Airlines CEO Ben Minicucci, the release says.

A dedicated leadership team will also be established to focus on integration planning.

The deal could face criticism by U.S. federal regulators, who have enforced antitrust laws under President Biden, suing to prevent mergers and acquisitions that could threaten competition in several industries, including in aviation.

In 2022, the department successfully sued to prevent a partnership between American Airlines and JetBlue in New York and Boston. It is also suing to block JetBlue from buying Spirit Airlines.

Closing arguments in that case are set for Tuesday.

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