Biden admin greenlights Alaska Airlines-Hawaiian Air merger

SEATTLE – The Biden administration is letting Alaska Airlines complete its $1 billion purchase of Hawaiian Airlines after the carriers agreed to certain conditions, including maintaining maintain current service on routes between Hawaii and the mainland U.S. where they don’t have much competition.

Transportation Department officials said Tuesday that no obstacles remain to the airlines closing their $1 billion deal and beginning to merge, although some final approvals are still pending.

Transportation Secretary Pete Buttigieg said the airlines made promises to protect travelers, including upholding the value of frequent-flyer rewards.

The decision to clear the way for the airlines to close their merger stands in contrast to the administration’s adamant opposition to previous airline deals. The Justice Department successfully sued to block JetBlue from buying Spirit Airlines for $3.8 billion, and it went to court to kill a partnership between JetBlue and American Airlines.

“We have a unique, once-in-a-generation opportunity to combine two incredible companies with aligned values and 90+ year legacies of serving and connecting local communities. I am deeply honored to work alongside these strong leaders from Hawaiian Airlines to lead the airline’s people, operations, and brand through this transition while sustaining our commitments to safety and service,” said Sprague.

The Justice Department could still challenge the Alaska-Hawaiian deal, but that appears unlikely.

The Transportation Department said that “as the merger moves forward,” Alaska and Hawaiian promised to meet certain conditions for six years.

Alaska Airlines Boeing 737-9 MAX in Seattle. (Alaska Airlines)

Those include preserving subsidized flights to smaller communities in Alaska and Hawaii, and maintaining current levels of service between Hawaii and the mainland where no more than one other airline currently flies the same route. The Transportation Department could drop the latter requirement if the flying becomes unprofitable.

Alaska and Hawaiian also agreed to some consumer protections including maintaining the value of frequent-flyer rewards as they combine their loyalty programs, guaranteeing families can sit together without paying extra fees, and offering lower costs to military families.

The Transportation Department said it gave Alaska and Hawaiian an exemption to combine ownership — to merge. The department is still reviewing the airlines’ request to fly international routes under one operating certificate, which is likely only a formality.

The airlines announced the deal in December, when they valued it at $1.9 billion including Hawaiian debt that Alaska will take over. It would solidify Alaska’s position as the fifth-largest U.S. airline by revenue.