Hawaiian & Alaska Airlines Agree With DOJ On Timing Of Merger

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Summary

  • After the DOJ requested more information from Alaska Airlines and Hawaiian Airlines, the three parties into a timing agreement.
  • The Alaska Airlines and Hawaiian Airlines merger was announced in December 2023.
  • However, the DOJ has become more stringent in the past year, including the Department blocking the JetBlue and Spirit Airlines merger.

Alaska Airlines, Hawaiian Airlines, and the United States Department of Justice (DOJ) recently entered into an agreement, with the two airlines agreeing not to finalize the merger 90 days after they received the DOJ’s approval following an additional request for information from the Department.

Additional information about the merger

According to the US Securities and Exchange Commission (SEC) filing, the DOJ’s Antitrust Division requested additional information and documents (Second Request) from both airlines regarding their merger.

Since the merger is conditioned on the expiration or early termination of the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), as well as other regulatory approvals, the second request extended the waiting period under the HSR Act until 30 days after Alaska Airlines and Hawaiian Airlines have complied with the DOJ’s request.

Timing the Alaska-Hawaiian merger

As such, the three parties entered into a timing agreement, which resulted in the two carriers agreeing not to go ahead with the merger before 90 days after the DOJ had certified substantial compliance with the Second Request.

The agreement was signed on March 27, 2024, with the SEC filing noting that both Alaska Airlines and Hawaiian Airlines have been cooperating with the DOJ and expect to continue doing so in order to gain approval for the merger.

Alaska Airlines and Hawaiian Airlines announced their merger on December 2, 2023. Then, the former airline said that it would acquire the latter in an all-cash deal, paying Hawaiian Airlines’ shareholders $18 per share. On March 27, the carrier’s shares closed the day of trading at $13.32, slightly down from its peak of $14.72 per share on January 29.

Nevertheless, the merger agreement promised that both airlines would keep their branding while, at the same time, integrating their operations into a single operating platform. This will enable both carriers to provide remarkable service and hospitality to their passengers.

Related


In Focus: Why The Alaska-Hawaiian Merger Could Be Good For The US Airline Market

Hawaiian Airlines shareholders have overwhelmingly approved the merger.

More conservative DOJ

However, recently, the DOJ has been more stringent when reviewing and approving mergers, which included its effort to sue the JetBlue and Spirit Airlines deal, which eventually was struck down by a US District Judge.

In addition, the DOJ has essentially dismantled the Northeast Alliance (NEA) between American Airlines and JetBlue, which saw both airlines combining their efforts to grow capacity in Boston and New York with a codeshare and frequent flyer program agreements. When the Department won the lawsuit against the NEA, the DOJ said that the court ruled that,

“[…] JetBlue and American Airlines’ decision to stop competing in Boston and New York, where they are major players, violated Section 1 of the Sherman Act because it increased fares and reduced choice for American travelers in many domestic markets for scheduled air passenger service.”

At the same time, the JetBlue and Spirit Airlines merger had one major hurdle to clear: the differentiating business models of both airlines. While at first glance, both airlines have a similar fare structure, the merger would have eliminated an ultra-low-cost competitor for JetBlue, according to the DOJ, resulting in fewer choices and higher fares for US consumers.

Related


Merger Blocked: What’s Next For JetBlue & Spirit Airlines

Seemingly, JetBlue and Spirit Airlines have to different futures ahead of them following a judge’s ruling against their merger.


  • Alaska Airlines Tile
    Alaska Airlines

    IATA/ICAO Code:
    AS/ASA

    Airline Type:
    Full Service Carrier

    Hub(s):
    Anchorage International Airport, Los Angeles International Airport, Portland International Airport, San Francisco International Airport, Seattle-Tacoma International Airport

    Year Founded:
    1932

    Alliance:
    oneworld

    CEO:
    Ben Minicucci

    Country:
    United States

    Region:
    North America



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