Alaska Air Announces $1.9 Billion Acquisition of Hawaiian Airlines
In a significant move within the aviation industry, Alaska Air (ALK) disclosed on Sunday its plans to acquire Hawaiian Airlines (HA) for a substantial $1.9 billion. The acquisition, resulting from several months of negotiations, includes the absorption of $900 million in Hawaiian Airlines debt.
Alaska Airlines CEO Ben Minicucci expressed enthusiasm about the deal during a news conference, describing it as a “fantastic” move that brings together two airlines with strong loyalties in their respective regions. Minicucci highlighted the strategic benefits of the merger, emphasizing the potential for expanded domestic and international choices for customers in both states.
The acquisition, expected to conclude within nine to 18 months, outlines a unique approach where both companies will retain their individual brands. This decision, according to Minicucci and Hawaiian Airlines CEO and President Peter Ingram, is a mark of respect for the nearly 100-year legacy of the two airlines and the communities they serve.
Both Alaska and Hawaii heavily rely on air travel, and this merger is anticipated to enhance connectivity between the two states. The deal positions Honolulu as the second-largest hub for the combined airline, providing improved international connectivity for West Coast travellers throughout the Asia-Pacific region.
As a result of the merger, Alaska Airlines’ fleet is set to expand from approximately 300 to 365 planes, serving a total of 138 destinations. This includes non-stop service to 29 prominent international destinations across the Americas, Asia, Australia, and the South Pacific.
With Alaska Airlines being a member of the Oneworld international airline alliance, the merger promises added benefits for Hawaiian Airlines loyalty customers. This includes enhanced lounge access, an improved credit card loyalty program, and increased opportunities for earning and redeeming miles.
Minicucci, slated to become the CEO of both airlines, framed the move as “pro-consumer” and positioned it as a strategy to compete more robustly with major players like United, Delta, Southwest, and American Airlines, who collectively hold 80% of the domestic market share.
The acquisition, however, may undergo scrutiny from antitrust authorities, a recent concern within the industry following a lawsuit involving JetBlue Airways and Spirit Airlines. When asked about the potential challenges, Minicucci deferred the issue to legal experts.
