Alaska Airlines expects to close its merger deal with Hawaiian Airlines soon after it cleared a Department of Transportation review Tuesday.
The DOT said SeaTac, Washington-based Alaska can acquire Hawaiian but, it required “enforcement, public-interest protections” from the two airlines before the merger. These include protecting the value of rewards and maintaining certain Hawaiian routes and lower costs for military families, DOT said.
Alaska announced in December that it would acquire Hawaiian for $1.9 billion. Under that plan, each airline would maintain its brand but operate under the same platform, serving a combined 54.7 million passengers annually.
Alaska expects to finalize the deal as early as Wednesday, according to a Securities and Exchange Commission filing.
Hawaiian President and CEO Peter Ingram will step down following the deal closure, Alaska announced Tuesday. Joe Sprague, the current Alaska regional president of Hawaii/Pacific, will replace Ingram and lead all aspects of Hawaiian’s operations.
“We look forward to formally welcoming Hawaiian Airlines’ guests and employees into Alaska Air Group,” Alaska CEO Ben Minicucci said in a statement Tuesday. “We sincerely appreciate the exceptional care and service that employees of both companies have continued to show for one another and our guests throughout this process, and the support of both airlines’ labor unions, as we proceed to realize the vision for this combination and build a stronger future together.”
The protections required by the DOT remain in effect for six years after the transfer is approved.
The two airlines agreed to what the DOT called the first-ever rewards protections for the airlines’ planned new loyalty program. Alaska Mileage Plan miles and HawaiianMiles earned before the conversion won’t expire and will be transferred using a 1-to-1 ratio, so all members will have the same number they had originally. HawaiianMiles miles will be maintained at their current value and statuses will be matched and maintained, the DOT said.
The DOT requires the airlines, when merged, maintain passenger and cargo service for inter-island routes and key routes between Hawaii and the continental U.S, and preserve its support for the Essential Air Service program, which subsidizes airline flights to rural communities.