Alaska Air Group acquires Hawaiian Airlines

Alaska Air Group has announced a significant acquisition of Hawaiian Airlines for $1.9 billion. This deal, which includes taking on $900 million of Hawaiian’s debt, represents a major shift in the airline industry, marking the second proposed merger in less than two years.

Hawaiian Airlines, facing multiple challenges including competition from Southwest and a slow recovery in Asian travel markets, has seen a significant decline in its stock value, making it a strategic acquisition target for Alaska Air Group. The deal, at $18 per share, comes as Hawaiian’s shares closed at just $4.86, reflecting a steep drop of nearly 53% this year.

Shane Tackett, CFO of Alaska Airlines, sees this as a unique opportunity to strengthen their position in the premium-travel Hawaii market. However, the merger faces potential hurdles with regulatory bodies. The Biden administration’s Justice Department has previously shown opposition to airline mergers, as seen in the cases of JetBlue Airways’ partnerships and acquisitions.

Despite these challenges, Alaska CEO Ben Minicucci remains confident in the deal’s approval. He highlights the combined company’s reach, including 1,400 daily flights and a larger network, which he believes will allow them to compete effectively with the market’s largest carriers.

The merger is subject to approval by regulators and Hawaiian’s shareholders, and is expected to close in 12 to 18 months. The combined company will be based in Seattle and led by Minicucci, emphasizing Alaska’s strategic plan to enhance financial performance and network growth.