Alaska Airlines is reportedly to acquire Hawaiian Airlines in a deal that may be announced formally today, Sunday, December 3rd, 2023.
In an unofficial report from the Wall Street Journal, Alaska Airlines may announce a deal as soon as today to purchase Hawaiian Airlines.
“Alaska Air ALK 5.08%increase; green up pointing triangle is nearing a deal to buy Hawaiian Airlines HA 8.24%increase; green up pointing triangle, a combination of rivals that could be announced as soon as Sunday, according to people familiar with the matter.” – WSJ
Hawaiian has communicated the following to its staff in an internal memo obtained by Live And Let’s Fly:
“Combining for a Stronger Future
We have entered into an agreement to become a part of Alaska Airlines Group but continue to operate as the Hawaiian brand.
The combined strength of Alaska and Hawaiian will result in many important benefits for employees and guests and preserve the Hawaiian brand into the future, but we understand this kind of change can be difficult to process. We’re committed to communicating often and answering your questions as the process moves.”
This is a developing story and has not been officially confirmed by either party.
For Alaska, this is a logical combination. Alaska is already one of the largest providers to Hawaii from its several west coast bases operating 737 aircraft to the islands. Hawaiian has a bit more reach with larger aircraft from Airbus including the longest US domestic flight spanning more than 10 hours from Honolulu to Boston.
This combination would make Alaska far and away the leader in flights from the US mainland to the islands despite a substantial presence from United.
The size of the Hawaiian network may pose challenges to the carriers in combining. JetBlue and American Airlines lost its Northeast Alliance tie-up in a losing battle with the Department of Justice. JetBlue is attempting to acquire Spirit and is in court right now fighting the DOJ on the matter as well.
It’s clear that the DOJ wants to keep competition where it can. While the JetBlue and Spirit combination is a different type of challenge, this combination would see two foes with a massive presence offering more seats to Hawaii than any other carrier could reasonably compete with.
There’s no question it would be challenged by the DOJ, and unlike other mergers in which concessions could be provided to maintain competitiveness, the entire strategy of this union would be to own a specific geography, making such concessions useless.
Alaska is now a member of the oneworld Alliance. Hawaiian flies to a number of destinations which work well with other oneworld carriers like Japan Airlines and Qantas. It’s possible that Alaska would seek its own JV in time as American has done with Japan Airlines, British Airways, Iberia, and Aer Lingus to offer a seamless product.
While the deal is in some places called a merger and in other places an acquisition, the structure of the deal could require Hawaiian to apply for membership. In past mergers, namely the US Airways/American Airlines combination, US Airways was granted temporary status in oneworld while the two carriers handled the legal and bureaucratic necessities of the combination. The same could hold true here, depending on the nature of the deal.
While not all mergers are great for consumers, and this one would have to be examined with more scrutiny as details unfold, I’m cautiously optimistic about this combination. The two carriers are in somewhat similar market strata, and it would allow Alaska to grow in a way they have not done to this point with widebody aircraft and major international destinations.
What do you think? Is this a good deal for consumers? How could this combination reshape Alaska Airlines?