The news of Alaska Airlines to acquire Hawaiian Airlines for $1.9 billion came as a surprise to many people when the announcement was officially released by their parent companies earlier today, Sunday, December 3, 2023.
Alaska Airlines to Acquire Hawaiian Airlines For $1.9 Billion
The official press releases from both Alaska Air Group, Incorporated and Hawaiian Holdings, Incorporated announced that they have entered into a definitive agreement under which Alaska Airlines will acquire Hawaiian Airlines for $18.00 per share in cash — inclusive of $0.9 billion of Hawaiian Airlines net debt.
The combined airline will maintain both the Alaska Airlines and the Hawaiian Airlines brands while integrating into a single operating platform as the fifth largest airline in the United States. Despite keeping the brands separate, the membership programs will be combined into one offering. Details of the new combined membership program have not been released at the time this article was released.
The fleet will consist of 365 airplanes which will serve 138 destinations — 29 of which are international destinations — through the combined networks of the airlines as illustrated in the route network map shown above. Additionally, greater than 1,200 destinations are served through the oneworld Alliance, through which Hawaiian Airlines will become a member. Hub airports will include Honolulu, Seattle, Anchorage, Portland, Los Angeles, San Diego, and San Francisco, which will significantly bolster the presence of both airlines on the west coast of the United States.
The combined airline will consist of 31,200 employees serving 54.7 million passengers annually and earn $13.1 billion in revenue while unlocking more destinations for consumers and expand choice of critical air service options and access throughout the Pacific region, Continental United States, and globally.
The transaction agreement has been approved by the boards of both companies. The acquisition is conditioned on required regulatory approvals, approval by shareholders of Hawaiian Holdings, Incorporated — which is expected to be sought in the first quarter of 2024 — and other customary closing conditions. The deal is expected to close as soon as twelve months but could take as many as 18 months. The combined organization will be based in Seattle under the leadership of Ben Minicucci, who is the current chief executive officer of Alaska Airlines. A dedicated leadership team will be established to focus on integration planning.
Final Boarding Call
This is not the first time Alaska Airlines has acquired another airline. Alaska Airlines initially agreed to acquire Virgin America for $2.6 billion in cash back on Monday, April 4, 2016. The Department of Justice of the United States officially approved the acquisition of Virgin America Incorporated by Alaska Airlines on Tuesday, December 6, 2016 after the completion of its review. The last official flight of Virgin America from Los Angeles to San Francisco occurred at 9:35 in the evening Pacific Daylight Time on Tuesday, April 24, 2018.
As to whether this acquisition will be approved is still in question, as this deal may be scrutinized by the Department of Justice of the United States.
With the exception of a number of flights between Hawaii and several cities that are located on the west coast of the United States, the route networks of both airlines do not overlap. This can potentially be good for the consumer as well as for both airlines — especially for members of the new combined membership program with the significantly expanded combined route network.
Whether the claims that “The combination of complementary domestic, international, and cargo networks is positioned to enhance competition and expand choice for consumers on the West Coast and throughout the Hawaiian Islands through” a number of initiatives “as well as long-term job opportunities for employees, continued investment in local communities and environmental stewardship” remain to be seen, however — if the acquisition is indeed approved…
All photographs ©2022 and ©2023 by Brian Cohen.
