Alaska Air Group Inc. on Sunday announced a plan to acquire Hawaiian Holdings Inc. Alaska’s $1.9 billion offer is almost four times the current price of Hawaiian shares, which have been pummeled this year by the Maui wildfires, high fuel costs and engine recall issues on some of its Airbus SE planes.
In a joint announcement, the airlines said the merger will allow them to compete effectively, expand destinations and entrench the newly combined carrier on the West Coast. The newly combined company will have a 25% share of the US domestic market. Alaska Air will remain the fifth-largest carrier in the United States, behind Delta Air Lines, American Airlines, Southwest Airlines and United Airlines — all of which grew to their current size with the help of mergers. Alaska Air will have 365 aircraft, 31,200 employees and 54.7 million annual passengers; it will be based in Seattle, and Honolulu will become an Alaska Airlines hub, where pilot, flight attendant and maintenance bases will remain.
Should the agreement be approved by antitrust regulators, the combined airline will be part of the Oneworld airline alliance, which Alaska joined in 2021. It will serve 138 destinations, including 29 international markets.
During a Sunday conference call with investors, Alaska emphasized Hawaiian’s long history of profitability. The carriers said the deal will offer travelers more opportunities to fly to and from Hawaii; now, Hawaiian mainly connects the state to major airports in the United States, Japan, South Korea, Australia and New Zealand, while Alaska flies throughout the United States, and to Mexico and Central America. Insiders noted that the combination of Alaska and Hawaiian will give the new company control of the Hawaiian market, one of the world’s most popular tourist destinations. Over the past year, Hawaiian sold about 22% of all flights to Hawaii, more than any other airline; that number would climb to 38%, more than double that of the next competitor, United Airlines.
United, the fourth-largest carrier, controls about 16 percent of the market, according to federal data. Alaska controls about 6.4 percent of the market today, a share that would grow to 8.2 percent after its acquisition. JetBlue controls about 5.5 percent of the market today, but that would nearly double in size if it is successful in completing its purchase of Spirit.
Alaska Airlines CEO Ben Minicucci said consumers will continue to see both brands, but work groups from the two airlines will be combined under a single collective bargaining agreement.
The merger still must get past the Department of Justice (DOJ), which has successfully challenged partnerships between JetBlue and American Airlines and JetBlue and Spirit, citing antitrust concerns. But Minicucci said less than 3% of the network routes of the two airlines overlap.
