The Acquisition of Hawaiian Airlines by Alaska Airlines has Cleared the U.S. Justice Department: A Milestone in the Merger Process

After the $1.9 billion agreement to combine Alaska Airlines and Hawaiian Airlines was announced eight months ago, the U.S. Justice Department has cleared the plan without a lawsuit to block the deal. This clears the way for the two airlines to seek approval from the U.S. Transportation Department before the merger can proceed. The largest merger of U.S. carriers since Alaska merged with Virgin America years ago, this acquisition has reached a significant milestone in the approval process.

Hawaiian Airlines faced numerous challenges leading up to the acquisition announcement in December. Factors such as the Maui wildfires, increased competition from Southwest Airlines, and the slower recovery of travel to and from Asia post the Covid-19 pandemic, posed obstacles for the airline. Hawaiian recorded net losses in almost every quarter since the beginning of 2020. Despite this, booking trends are showing signs of improvement and the shareholders are responding positively, with Hawaiian’s shares rising by almost 12% this quarter, in contrast to the rest of the airline industry.

Implications of the Merger

The plan outlined by Alaska Airlines and Hawaiian Airlines involves maintaining the individual brands of both carriers while operating under a unified platform. The merger will create a fleet of more than 360 airplanes, servicing over 130 destinations. This move signifies a significant expansion and consolidation within the airline industry, setting the stage for increased competition and potentially enhanced services for customers.

As the two airlines move forward with seeking approval from the U.S. Transportation Department, the focus will shift towards the integration process and the seamless merging of operations. The success of this venture will be closely monitored by industry analysts and stakeholders, as it has the potential to reshape the landscape of the airline market in the United States. The implications of this merger reach far beyond the individual companies involved, impacting customers, employees, and investors alike.