DOT Clears $1.9B Alaska-Hawaiian Airlines Combo For Takeoff

Airline Merger Gets Government Approval

The U.S. Department of Transportation (DOT) has approved the $1.9 billion merger of Alaska Air Group and Hawaiian Holdings, the parent companies of Alaska Airlines and Hawaiian Airlines, respectively. The deal, which was first announced in January 2022, will create the fifth-largest airline in the United States.

Benefits and Challenges of the Merger

The merger is expected to benefit both airlines by increasing their scale and reach. Alaska Airlines will gain access to Hawaiian Airlines' strong presence in the Pacific region, while Hawaiian Airlines will benefit from Alaska Airlines' extensive network in the mainland United States.

However, the merger also poses some challenges. The two airlines have different cultures and operating systems, and integrating them will be a complex process. Additionally, the merger could lead to higher fares and reduced competition in some markets.

DOT's Approval Process

The DOT's approval of the merger was based on its review of the competitive impact of the deal. The DOT concluded that the merger would not significantly reduce competition in any market and that the benefits of the merger outweighed the potential drawbacks.

The DOT also imposed several conditions on the merger, including a requirement that Alaska Airlines and Hawaiian Airlines maintain their separate brands and loyalty programs. Additionally, the DOT required the airlines to provide certain benefits to consumers, such as fare caps and additional flight options.

Next Steps

The merger is expected to close in the second half of 2023, subject to the approval of Hawaiian Airlines' shareholders. Once the merger is complete, the combined airline will operate under the Alaska Airlines brand.

The merger of Alaska Airlines and Hawaiian Airlines is a significant event in the airline industry. The combined airline will be a major player in the U.S. market and will have a strong presence in both the mainland United States and the Pacific region.