Alaska Airlines announced Sunday that it plans to acquire Hawaiian Airlines in a $1.9 billion deal.
The combined airline will retain the Alaska Airlines and Hawaiian Airlines brands, but with a single operating platform, Alaska Airlines said in a news release. The airline would serve 138 destinations, including non-stop flights to airports in the Americas, Asia, Australia and the South Pacific.
For Hawaii residents, the company would offer three times the current number of destinations from the state to destinations across North America, either nonstop or with a single connection.
“With Alaska Airlines, we join an airline that has a long history of serving Hawaii and has a complementary network and shared service culture,” said Peter Ingram, president and CEO of Hawaiian Airlines, quoted in the Press release.
The deal will likely face intense scrutiny from federal regulators. The Justice Department has aggressively enforced antitrust laws under President Biden, helping to prevent mergers, acquisitions and other deals that could lessen competition in various industries, including aviation.
Last year, the department successfully blocked a partnership between American Airlines and JetBlue Airways in New York and Boston. He’s also currently suggesting blocking JetBlue from buying Spirit Airlines. A federal trial in that lawsuit is expected to conclude this week, with closing arguments scheduled for Tuesday.
The Spirit acquisition is expected to generate the rapid growth that has eluded JetBlue in recent years. In 2016, JetBlue lost a bidding war with Alaska for Virgin America.
The U.S. airline industry is dominated by four carriers – Delta Air Lines, American Airlines, Southwest Airlines and United Airlines – all of which grew to size through mergers. United, the fourth-largest airline, controls about 16 percent of the market, according to federal data. Alaska is the fifth-largest carrier, with 6.4 percent, followed by JetBlue, with 5.5 percent.
If the sale of Spirit is authorized, JetBlue will grow and control more than 10% of the market. If Alaska is allowed to buy Hawaiian, the combined company will control a little more than 8 percent of the market.
Unions representing thousands of workers in Alaska and Hawaii, including flight attendants, office workers, airport workers and other employees, said they would work closely with airlines to s ensure that workers benefit from the merger.
“Our first priority is to determine whether this merger will improve conditions for flight attendants, similar to the benefits the companies have outlined for shareholders and consumers,” said the Association of Flight Attendants, which represents 9,000 airline workers. Alaska and Hawaii, plus thousands more. several other carriers said in a statement. “Our support for the merger will depend on it.”
There is relatively little overlap in the services provided by airlines. Alaska and Hawaii only compete on about 3% of the itineraries they offer collectively. These routes, which connect Hawaii airports with those in major West Coast cities, account for about 6.7% of the seats that airlines collectively flew over the past year, according to Cirium, a data provider aeronautics.
