Alaska Airlines successfully completed its acquisition of Hawaiian Airlines for $1 billion, following the removal of the final regulatory barrier by the federal government. The purchase includes taking over approximately $900 million of Hawaiian Airlines’ debt. Alaska Airlines has decided to maintain Hawaiian Airlines as a distinct brand, avoiding the need to repaint their aircraft.
To secure approval from the Department of Transportation, both airlines agreed to uphold current service levels on crucial routes within Hawaii and between the state and the U.S. mainland, particularly in areas with limited competition. Despite the completion of the acquisition, Alaska Air Group’s stock saw a 3% decline on Wednesday, although it has shown a 2% increase since the beginning of the year.
Unlike previous challenges by the Justice Department against similar industry mergers, such as JetBlue’s failed bid to acquire Spirit Airlines, there have been no antitrust objections raised against the Alaska-Hawaiian deal. In addition, both Alaska and Hawaiian Airlines have committed to certain consumer safeguards, including maintaining the value of frequent-flyer rewards and providing compensation for flight cancellations and significant delays caused by the carriers.
Alaska Airlines, headquartered in Seattle, reassured that these conditions align with the intentions outlined when the acquisition was first announced in December. This acquisition cements Alaska’s position as the fifth-largest airline in the U.S. based on revenue.
