Skift Take
The courting carriers arenât over the finish line just yet, but the green light from the DOJ dramatically increases the likelihood of the deal closing successfully.
Alaska Airlines and Hawaiian are one step closer to gaining final approval for their proposed merger. Monday was the end of the review period for the U.S. Department of Justice (DOJ) to complete its regulatory investigation. This followed two last-minute extensions in recent days.
In a statement, Alaska described the expiry of the DOJ deadline as âa significant milestone in the process to join our airlines.â It noted that as part of the DOJâs review, the airline worked closely with the Hawaii Attorney General âto reinforce and expand upon our commitments for the future of Hawaiian Airlines and to Hawaii consumers.â
Hawaii Governor Josh Green added: âI appreciate the DOJâs strong consideration of Hawaiiâs unique needs during its review of the proposed merger. I look forward to this merger proceeding and the overwhelming consumer, employee, and community benefits that will result from it.â
Green said the combined company will expand travel options for residents while preserving local jobs. The governor also claimed it will enhance competition across the U.S. airline sector.
Since the $1.9bn merger announcement in December 2023, leaders from the two companies have been on a charm offensive to highlight how beneficial the upcoming âtwo brands, one carrierâ system could be for travelers.
To help win support for the deal, Alaska previously said it would maintain the Hawaiian Airlines brand and commit to providing inter-island connectivity within Hawaii. Members of the HawaiianMiles program will also retain the value of their loyalty points.Â
What Happens Now?
The DOJ developments are not the end of the formal regulatory process. The proposed merger still needs approval from the Department of Transportation (DOT) and is subject to an interim exemption application.Â
Historically, DOT approval has quickly followed DOJ decisions.
Alaska says after the DOT nod, it will âcomplete work to close the transaction, and proceed with integrating the two companies, welcoming Hawaiian Airlines guests and employees into Alaska Air Group.â
If completed as planned, the deal will cement Alaskaâs place as the fifth-largest carrier by revenue in the United States. It also offers the chance for the Seattle-based carrier to venture far beyond the shores of the West Coast and into Asia-Pacific, tapping into Hawaiianâs fleet of long-haul widebody planes.
The JetBlue-Spirit Factor?
The dramatic collapse of the JetBlue and Spirit merger in January cast a shadow on the deal. If realized, the $3.8bn partnership would have created the fifth-largest airline in the United States. Ultimately, it was thrown out by a judge, making it the first time in nearly 20 years that an airline merger had been blocked in the U.S.
However, on balance, fears over Alaskaâs position in the West Coast-Hawaii market and a possible monopoly didnât spook the DOJ. A recent case brought by a group of activist passengers was promptly dismissed by a U.S. District Court judge in Hawaii, helping clear the way for the DOJâs approval.
Speaking in March, Alaska Airlines CEO Ben Minicucci has called the decision to block the JetBlue-Spirit merger a âpositiveâ â because it set the stage for its merger with Hawaiian.
âI think the judge was clear in saying that heâs blocking the deal because of the elimination of an ultra-low-cost carrier that has benefit to consumers in the country,â Minicucci told he JPMorgan Industrials conference in New York.
âIn our deal, itâs nowhere near that. Our deal is completely different. Weâre actually the low-cost, low-fare airline acquiring Hawaiian.â
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