Summary
- Hawaiian Airlines’ shares dropped 9% amid DOJ concerns over $1.8B sale to Alaska Air Group, challenging 54.7M passenger merger.
- The merger offers more choices for passengers and robust competition to major US carriers. DOJ to decide by August 5, 2024.
- Following a comprehensive review, the Alaska-Hawaiian merger aims to provide substantial public benefits and expand international services.
Hawaiian Airlines has seen its shares tumble 9% amid a report that the US Department of Justice may unlikely approve its intended $1.8 billion sale to Alaska Air Group. The merger would see the two carriers serve more than 54.7 million passengers annually to 138 destinations across the Americas, Asia, Australia, and the South Pacific, including nonstop destinations to 29 top international ports. Furthermore, the combined carrier will offer more choices for passengers than either carrier could do before.
Through its partnership with the oneworld alliance, the carriers will provide access to over 1,200 destinations worldwide through the airline alliance. Hawaiian and Alaska will also offer more robust competition to the other major American carriers, including American, United, Delta, and Southwest, which currently account for 80% of all domestic seat shares.
Photo: BUI LE MANH HUNG | Shutterstock
The antitrust regulator will look to challenge the merger, and with it appearing, it would be unlikely the DOJ would approve the merger in the future. The United States Department of Justice (DOJ) has until August 5, 2024, to determine whether it will oppose the merger between Alaska Airlines and Hawaiian Airlines, according to an SEC filing released by both airlines on May 7, 2024.
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DOJ Given August Deadline Over Alaska-Hawaiian Airlines Merger
The DOJ started reviewing the Alaska and Hawaiian merger in February 2024.
No remedies to DOJ concerns
The two carriers have not provided any remedies to the DOJ concerns, as it is unclear whether the airlines had received clear indications if there was a lawsuit to block the detail coming. Hawaiian, through it’s regulator is looking into divestiture packages, however state and federal regulators will continue to discuss their options and are yet to make a final decision. Following the prediction, Hawaiian’s stocks began to fall on Tuesday, when it reported a 7% decline.
On December 3, last year, the two carriers publicly announced they had entered into a definitive merger, which could see Alaska Air Group (AAG) acquire the Honolulu-based carrier. The boards approved the terms of this agreement, and directors at both airlines and Hawaiian Holdings shareholders were to receive $18 per share in cash. On February 16, this year, Hawaiian Holdings shareholders approved the transaction.
Photo: christianthiel.net | Shutterstock
The DOJ started reviewing the Alaska and Hawaiian merger in early February 2024. The DOJ requested information and documents from Hawaiian and Alaska on February 7, 2024, to review the deal. Subsequently, a “second request” for additional information was sent on March 27, 2024.
Substantial public benefits
Following a merger, both carriers have stressed that a proposed transfer of route authority will ‘generate substantial public benefits,’ allowing the combined airlines to expand various international services to provide a more robust network for its consumers. The transaction will enable the carriers to offer new non-stop and nonstop services while allowing Alaska Airlines to access a widebody aircraft fleet to serve international and domestic routes. These widebodies enable Alaska to provide new competition to other leading US carriers.
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Alaska Airlines And Hawaiian Take Official Steps Towards Merging
Operating under combined ownership will allow the carriers to optimize aircraft usage and expand their domestic and international networks.
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Hawaiian Airlines
- IATA/ICAO Code:
- HA/HAL
- Airline Type:
- Full Service Carrier
- Hub(s):
- Honolulu International Airport, Kahului Airport
- Year Founded:
- 1929
- CEO:
- Peter Ingram
- Country:
- United States
