Alaska Airlines is reportedly to acquire Hawaiian Airlines in a deal that may be announced formally today, Sunday, December 3rd, 2023.
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Scant Details
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.
Logical Combination
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.
Regulatory Implications
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.
Other Considerations
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.
Conclusion
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?
Here is the website with all the details about the merger: https://localcareglobalreach.com
I found the word “synergies” in the press release. Sooo Go-Go 1980’s!!!!
I would imagine the DOJ is have a conniption fit at the moment!!
Next up, AA and B6. Closely followed by UA/WN.
The press conference for the announcement is at 2:00 PM Pacific.
Hm potential future arbitrage opportunity to use Amex points for Alaska miles (Amex>Hawaiian>Alaskan)
Bingo.
Nice to have a foreign carrier operate in the US! ha ha
I’ve heard of people from Hawaii being asked what country they are from.
I believe the Hawaiian name is slightly stronger than Alaska. How about a joint livery which would be Chester on the tail but Hawaiian colors and name?
What would the Hawaiian fleet become? The 717’s will eventually retire, maybe replaced with Embraer 175’s. I don’t think the 737 is good for so frequent short trips though I suppose they could be rotated with the Alaska fleet after 2 or 3 island hops. The Hawaiian/Alaska Airlines could have E175, 737-700/800/900/900ER/MAX8/MAX9, and A350’s.
They have a huge Vegas connection with hotel deals for Main Street Station and the California. Both hotels are 80% Hawaiian customers.
Oh look another completely incompatible airline for Alaska to buy!
In my experience, I like HA much better than AS. What a bummer if this buyout was approved by the feds.
Maybe I’m looking at this the wrong way, but the Asian markets are the only really new thing Alaska is getting out of this. Maybe they open mainland to Japan/Korea over Alaska? Out Northern the New Pacific Airlines? Alaska has the feed to make some Seattle-Asia work.
This is absolutely fantastic! Matt, great meeting you on UA321 this week. As both an Alaska G100K and Hawaiian Pualani Platinum I have been pushing for this deal for a year. HA has been decimated in Hawaii by SWA, their liquidity is low, and the engine issues put a crimp in their ops. Their IT is HORRIBLE, their management slow and timid, and their call center is in Manila in a betrayal to the Hawaiian People, but their PRODUCT is AWESOME. This is great for AS to open up to Asia, possible allow for wide body on transcons OR use a few A330 for SEA-LHR SEA-CDG, SEA-FCO. Plus Hawaiian Elites are loyal and put up with so much crap. They will love AS customer service.
Are they gonna Virgin America HA?
Nope. Lots of reasons why they won’t on HA like they did with VA
They need to add a route from Honolulu to Kwajalein in the Marshall Islands in order to break up the monopoly United has on that segment!