Alaska Airlines has successfully passed the scrutiny of the U.S. Justice Department in its bid to acquire Hawaiian Airlines. This milestone comes after a period of investigation into the $1.9 billion agreement between the two carriers, which was announced nearly eight months ago. With the clearance from the DOJ, the focus now shifts to obtaining approval from the U.S. Transportation Department before the deal can be finalized.
Upon completion, the Alaska Airlines and Hawaiian Airlines merger would mark the largest consolidation in the U.S. airline industry since Alaska’s merger with Virgin America back in 2016. The combined entity would operate under a single platform, maintaining both brands while boasting a robust fleet of over 360 aircraft serving more than 130 destinations. This move is expected to enhance their competitiveness and market presence in the aviation sector.
Leading up to the merger announcement, Hawaiian Airlines encountered various obstacles including the Maui wildfires, heightened competition from Southwest Airlines, and a slower rebound in travel to and from Asia following the Covid-19 pandemic. Despite facing net losses in most quarters since the onset of 2020, the airline has shown signs of improvement in recent booking trends. As a result, Hawaiian’s shares have surged by nearly 12% this quarter, contrasting the downward trend seen in the shares of most other airlines.
The aviation industry has witnessed a series of regulatory actions by the DOJ, including the thwarting of JetBlue Airways’ acquisition of Spirit Airlines and the dissolution of a partnership between JetBlue and American Airlines in the Northeast. These precedents underscore the rigorous scrutiny that airline mergers undergo to preserve competition and protect consumer interests.
The progress made by Alaska Airlines towards acquiring Hawaiian Airlines signifies a significant step towards consolidation within the U.S. airline sector. While challenges persist, the potential synergies between the two carriers bode well for their future prospects in a competitive market environment.