Alaska-Hawaiian Merger Given Go-Ahead by U.S. DOT

Less than a year after the JetBlue/Spirit merger attempt was blocked by the U.S. Department of Justice, a new airline merger between Hawaiian Airlines and Alaska Airlines has been approved by both the DOJ and now the DOT. However, this merge is happening in a slightly different way and has some constraints imposed by the Department of Transportation.

The Merge

In late 2023, Alaska Airlines and Hawaiian Airlines announced their intent to merge, albeit in a different way than how most airline merges go. Instead of becoming one airline, they will keep the two brands separate, and simply put the two entities under one parent company. The reasoning behind this was to preserve the unique culture and identities of the two West Coast-based airlines while also bringing their financials and economics under one roof. 

A month ago, the Department of Justice, the same branch that brought up the dispute to the Spirit/JetBlue merger, completed its review of the merger and cleared it to proceed to the review of the Department of Transportation. Today, the DOT completed their own review of the merger and has green-lit the two companies to move forward with their plans. A few small fine print items were included with the review, but none are meant to halt or delay the merge process any further.

Terms of the Merge

According to the review by the Department of Transportation, the merger will be allowed to proceed unopposed as long as a few circumstances are met. The first is that the rewards programs for both airlines must retain their value through the merge and must have a one-to-one transfer ratio when moving over into a new combined system that covers both airlines. 

That means customers with accounts through HawaiianMiles and Alaska Mileage Plans will be able to seamlessly move their points into whatever new combined program comes as a result of this merge. Also, the miles/points that exist in the two separate systems today cannot expire throughout the merge process.

On the side of the routes, the DOT has ordered that "essential air support" be preserved for Hawaii's rural areas. U.S. Secretary of Transportation Pete Buttigieg also said on a press call that the current level of service connecting the islands through passenger and cargo flights must be maintained. 

Hawaiian Airlines will also have to adopt Alaska's policy of guaranteeing families being seated together for no additional fees, as well as compensating passengers for any significant delays or cancellations caused by the airline. 

What's Next

Now that the merge has been approved, not much remains before the two airlines will be combined under one roof. The biggest hurdle that remains is securing a transfer application, which will allows Alaska and Hawaiian to combine their international networks and operate them under one certificate. 

They also need to apply for a single operating certificate for all operations, and to do that Alaska has created an interim transition team to work on getting that critical piece of paper secured. To help the merge even further, Alaska Airlines also plans to appoint Joe Sprague to the position of Hawaiian Airlines CEO from when the deal is closed until all FAA processes are completed. 

All in all, the now-approved merge of Alaska Airlines and Hawaiian Airlines is full steam ahead, and soon we will have a new global company in possession of a 360-airplane strong fleet that serves over 130 destinations across the globe.