To use this site, please disable the ad blocking feature and reload the page.
This website uses cookies to collect information about your visit for purposes such as showing you personalized ads and content, and analyzing our website traffic. By clicking “Accept all,” you will allow the use of these cookies.
Users accessing this site from EEA countries and UK are unable to view this site without your consent. We apologize for any inconvenience caused.
AP Photo/Ted S. Warren, File Alaska Airlines planes are shown parked at gates with Mount Rainier in the background at sunrise, March 1, 2021, at Seattle-Tacoma International Airport in Seattle.
AP
17:56 JST, August 21, 2024
Alaska Air is one step closer to acquiring Hawaiian Airlines after the U.S. Department of Justice chose not to challenge the $1 billion deal that the carriers say will create a company better able to serve travelers.
Alaska Air announced in December that it would pay $18 in cash for each share of Hawaiian. The deal includes $900 million in debt held by Hawaiian Airlines.
The brands of both airlines would be preserved after the merger, which is rare in an industry where decades of acquisitions have left only four big carriers dominating the U.S. market.
Alaska and Hawaiian say they have few overlapping routes and the intent of a tie-up is to allow the new airline to better compete with the nation’s Big Four: American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.
Alaska Air and Hawaiian Holdings, the parent company of Hawaiian Airlines, said in regulatory filings with the Securities and Exchange Commission Tuesday that the review period for the Justice Department, which had already been extended several times, expired just after midnight.
The closing is still subject to approval from the Department of Transportation. Alaska and Hawaiian have been working with Transportation on lingering issues, according to the SEC filing.
The decision by the Justice Department to give the deal a pass runs counter to the Biden administration’s opposition to two recent attempts at further consolidation in the airline industry. The Justice Department successfully sued to block JetBlue Airways from buying budget carrier Spirit Airlines and prevented JetBlue from striking a partnership with American Airlines in the Northeast. In both, the administration argued that allowing the deals would have reduced choice and driven up prices for consumers.
If Alaska and Hawaiian close their agreement, it will be the first combination of sizeable U.S. airlines since 2016, when Alaska outbid JetBlue to buy Virgin America.
Shares of Hawaiian Holdings Inc. jumped more than 12%. Alaska Air Group Inc. shares were flat.
Hawaiian has not recovered from the coronavirus pandemic as have larger airlines, including Alaska.
Hawaiian depends heavily on tourism from Japan, which dropped sharply after the outbreak of COVID-19 and now suffers from the weakness of the yen, which has fallen by about 40% in comparison with the dollar since the start of 2021. In addition, Hawaiian faces more competition on flights between the islands and the U.S. mainland and from Southwest on intra-islands service.
