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Back in December, I wrote about Alaska Airlines entering into a definitive agreement to buy Hawaiian Airlines. The two airlines would remain independent brands post acquisition, but would combine loyalty programs. Two weeks ago, the Department of Justice (DOJ) extended its antitrust review period to end on August 15th (it was originally slated to end on August 5th). We should find out today if this is approved, denied, or the review period is going to be extended again.
The fifth largest US airline is looking to expand to operate a fleet of 365 narrow and widebody aircraft and reach 138 destinations through the combined networks. This would also offer flyers access to more than 1,200 destinations globally through the oneworld Alliance. This combination would build on the 90+ year legacies and cultures of the two airlines while preserving the brand legacies and loyalties they both hold.
Under the combined company, Honolulu’s Daniel K. Inouye International Airport (HNL) would become a key hub with expanded service for residents of Hawaii to the Continental US as well as new connections to Asia and throughout the Pacific for travelers across the US. The DOJ has made it clear that it wants to keep competition in market. This deal would create dominance within a specific geography and reduce competitiveness.
We’ll soon know what the DOJ thinks and if concessions need to be made in this case. But, this seems to not have the opposition seen with the JetBlue/Spirit merger and the Northeast Alliance that JetBlue and American Airlines had running. The DOJ could ask for the combined airline to divest slots at crowded airports so that market dominance is less of a concern. It will be interesting to see if the DOJ also asks Alaska to dissolve its West Coast partnership with American Airlines. The two carriers are in the same alliance, but they also offer things like reciprocal upgrades and codeshares.
Beat of Hawaii confirms that these concerns might need to be addressed in order to push the merger through. It recently reported:
According to recent discussions on aviation forums, there is growing speculation that the DOJ might impose conditions on the merger, such as a commitment to maintain current seat capacities and flight frequencies on interisland routes for a certain period, possibly for up to a decade. This would ensure that Alaska Airlines does not reduce service levels, which could lead to increased pricing and diminished accessibility for Hawaii’s residents.”
Anthony’s Take: We should know soon if this merger is approved or what else the DOJ will require the airlines to do in order to close the deal. I’ll be watching for updates.
(Image Credits: Alaska Airlines and Hawaiian Airlines.)
(H/T: View from the Wing.)
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Advertiser & Editorial Disclosure: The Bulkhead Seat earns an affiliate commission for anyone approved through the links above This compensation may impact how and where links appear on this site. We work to provide the best publicly available offers to our readers. We frequently update them, but this site does not include all available offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
1 comment
Since Southwest started flying Hawaii, Hawaiian Airlines has been in big trouble financially. If they don’t find a merger partner then they’ll eventually file Chapter 7 bankruptcy. This is seemingly the best of a set of sub-optimal choices. Certainly this is better than one of the Big 3 legacy airlines taking over Hawaiian?