Pago Pago, AMERICAN SAMOA — For the first time — in the case of the Hawaiian Airlines /Alaska Air merger — the Dept. of Transportation (DOT) is requiring airlines to agree to a binding consumer protection in order to close the merger. By locking in terms upfront, the DOT says it’s establishing a more proactive approach to the merger process that prioritizes travelers.
According to Hawaii News Now, the protections and commitments include:
- Protecting the value of rewards
- Maintaining existing service on key Hawaiian routes to the continental United States and inter-island
- Preserving support for rural service
- Ensuring competitive access at the Honolulu hub airport
- Guarantee fee-free family seating and alternative compensation for controllable disruptions
- Lowering costs for military families
The DOT said the commitments “do not impact the synergies of the deal, which will enhance competition and expand choice for consumers.”
Also yesterday, Alaska Air Group, the parent company of Alaska Airlines, announced that Hawaiian Airlines President and CEO Peter Ingram will step down immediately following the completion of its $1.9 billion transaction with Hawaiian Airlines and an interim Honolulu leadership team will guide the closing of the merger.
Joe Sprague, Alaska Airlines’ current regional president of Hawaii/ Pacific, will be named the new Hawaiian Airlines CEO and will lead the interim leadership team overseeing Hawaiian’s operations while Alaska pursues a single-operating certificate.
Until then, the airlines will operate as one organization with two separate airline operations, under two individual operating certificates. After the certificate is granted, the airlines will function as a single operation with two public-facing brands, Hawaiian Airlines and Alaska Airlines.
Sprague will oversee all aspects of Hawaiian Airlines’ operations until the FAA finalizes Alaska’s request for a single operating certificate — a process made possible by the U.S. Department of Transportation’s approval of the airlines’ application to combine and operate international routes under one certificate.
Sprague said in a statement, “We have a unique, once-in-a-generation opportunity to combine two incredible companies with aligned values and 90-plus 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.”
Meanwhile, Associated Press is reporting that the Biden administration is letting Alaska Airlines complete its $1 billion purchase of Hawaiian Airlines after the carriers agreed to certain conditions, including maintaining 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 the deal and beginning to merge, although some final approvals were still pending.
Alaska Airlines said it expected to close the deal “in the coming days.”
Alaska’s stock closed down 1%, while shares in Hawaiian Holdings rose 4% to $18, the price per share that Alaska agreed to pay for its smaller rival.
The decision to clear the way for the airlines to merge 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.
American Samoa residents traveling to & from Hawai’i and the US mainland have taken a wait-and-see attitude, hoping for better ticket prices — and perhaps even an increase in available flights in & out of the territory.
Many residents of American Samoa believe that the Am. Samoa leg of Hawaiian Air routes is one of its most profitable — pointing to the vast price difference between tickets for the Hawai’i- US mainland (LA or SF) leg and the Pago- Hawai’i leg, despite being of like distance.