Alaska Airlines has officially received approval from the U.S. Department of Transportation (DOT) for its $1.9 billion acquisition of Hawaiian Airlines, marking the final major milestone before the historic deal is set to be completed as early as this week.
This approval comes after the U.S. Department of Justice’s (DOJ) decision not to block the merger in August, solidifying the path for the acquisition to move forward.
The DOT confirmed the decision to allow the merger to go ahead on Tuesday after both airlines agreed to several stipulations designed to protect consumer interests.
The Agreed Conditions
1. Protect the value of rewards programs by ensuring no devaluation of points and that customers retain their current statuses. Members must be able to transfer their HawaiianMiles to Alaska Mileage Plan miles, and vice versa, at a 1:1 ratio before the two schemes are merged into one.
2. Maintain key commercial and cargo flight routes between the Hawaiian islands and the continental U.S. to protect the interests of Hawaiian residents, especially those in rural communities.
3. Preserve support for Essential Air Service (EAS) in rural communities in both Hawaii and Alaska.
4. Ensure competitors have access to Honolulu International Airport (HNL) by refraining from any actions that prevent new entrants or smaller airlines from operating at the airport.
5. Guarantee that children aged 13 and under can sit next to their accompanying adults free of charge, in line with the DOT’s regulations for all major airlines.
6. Provide travel credit or frequent flyer miles when a flight is canceled or delayed for three hours or more due to circumstances within the carrier’s control.
7. Reduce costs for U.S. military personnel and their families by waiving certain fees, including allowing at least one free carry-on bag and at least two free checked bags.
Route and Job Preservation
“Our top priority is protecting the traveling public’s interest in this merger,” said U.S. Transportation Secretary Pete Buttigieg. “We have secured binding protections that maintain critical flight services for communities, ensure smaller airlines can access the Honolulu hub airport, lower costs for families and service members, and preserve the value of rewards miles against devaluation.”
Photo: Courtesy of Alaska Airlines
“This more proactive approach to merger review marks a new chapter of DOT’s work to stand up for passengers and promote a fairer aviation sector in America,” added Buttigieg.
Hawaiian Leadership Changes
Following the DOT’s decision to approve the merger, the parent company of Alaska Airlines, Alaska Air Group, quickly announced the new leadership team that will oversee Hawaiian Airlines’ operations until the two airlines are officially combined.
With the current Hawaiian Airlines President and CEO Peter Ingram stepping down, the airline’s interim CEO will be Alaska Airlines’ regional president of Hawai’i/Pacific, Joe Sprague.
Photo: Hawaiian Airlines CEO Peter Ingram. Courtesy of Marco Garcia
“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,” said Sprague.
“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.”
Separate Brands Moving Forward
Since the merger was first announced late last year, it has been made clear that both Alaska Airlines and Hawaiian Airlines will keep their respective brand names. Together, the combined airlines will become a major force in the West Coast and transpacific markets, commanding a fleet of over 360 aircraft and offering flights to more than 130 destinations.
Photo: Courtesy of Hawaiian Airlines
“We look forward to formally welcoming Hawaiian Airlines’ guests and employees into Alaska Air Group,” said Ben Minicucci, CEO of Alaska Air Group.
“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.”