Alaska, Hawaiian Airlines merger clears antitrust hurdle, airline says
Alaska Airlines and Hawaiian Airlines have cleared an important regulatory hurdle for their plan to combine operations, according to Alaska Airlines.
The nearly $2 billion deal, the first airline merger in almost a decade, is expected to significantly broaden mainland U.S. travel options from Hawaii and expand Alaska Airlines’ international presence.
An overnight deadline for the Justice Department to file a lawsuit blocking the merger passed with no announcement that it would sue. Statements from Alaska Airlines and the governor of Hawaii said the deal had cleared an important milestone. The Justice Department did not immediately respond to inquiries.
“The time period for the U.S. Department of Justice … to complete its regulatory investigation of the proposed combination of Alaska Airlines and Hawaiian Airlines … has expired,” Alaska Airlines said in a news release late Monday.
The merger still has to be approved by the Department of Transportation, according to Alaska Airlines.
The announcement came as a surprise to some in the industry, given the Biden administration’s pledge to scrutinize mergers in already highly concentrated industries.
Alaska Airlines said it worked closely with the Hawaii attorney general to “reinforce and expand” its commitments to Hawaiian Airlines and Hawaii consumers, agreeing to maintain the Hawaiian Airlines brand to protect local jobs.
In a statement, Hawaii Gov. Josh Green (D) said his administration had worked closely with the airline’s leadership to evaluate the merger’s potential impacts and ensure the preservation of local union jobs. Green said the deal would expand access to the mainland for Hawaii residents.
“The merger will vastly expand the number of destinations throughout North America for Hawai’i residents that can be reached nonstop or one-stop from the islands,” Green said.
In December, the two carriers announced their plans to merge operations, arguing that in an industry where four major carriers — American, Delta, Southwest and United — account for 80% of the market, they had no choice but to join forces.
The Justice Department then opened a review of the deal in February. The carriers had initially sought a decision by Aug. 5 but agreed to extend the deadline to Aug. 15, according to a regulatory filing.
Alaska Airlines chief executive Ben Minicucci told The Washington Post at the time of the announcement that the transaction would bring together two companies that shared similar values: connecting communities and connecting people. Peter Ingram, Hawaiian’s chief executive, pointed out that there were no two states — Alaska and Hawaii — more dependent on air service to connect them with the wider world.
Though combined, the airlines would continue to operate under their own brands, Minicucci said, adding that there would be no loss of union jobs because the carriers are not making any changes to their networks. The airlines overlap on only 12 routes, he noted.
As part of the deal, Alaska also pledged to open a “significant” regional headquarters in Hawaii, similar to ones it operates in Alaska and California.
The last major U.S. merger in 2017 also involved Alaska, which outbid JetBlue for Virgin America.
This is a developing story and will be updated.