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Alaska Airlines and Hawaiian Airlines announced on Sunday that they plan to combine forces, joining a growing trend of U.S. airlines seeking to expand through mergers. Under the agreement, Alaska Airlines will acquire Hawaiian for $1.9 billion, or $18 per share, which includes $900 million in debt.
The merger is expected to help both carriers compete more effectively across the U.S. and globally, while expanding destinations for travelers and establishing the combined carrier’s presence on the West Coast. The airlines stated that they would continue to operate under their respective brands and maintain a single loyalty program. The goal is to achieve run-rate synergies of approximately $235 million through the merger.
The combined entity would be based in Alaska Airlines’ headquarters in Seattle, with Honolulu serving as a key hub. Alaska Airlines CEO Ben Minicucci expressed excitement about the combination, stating that it is a step towards delivering a better travel experience for guests and expanding travel options for customers on the West Coast and in Hawai’i.
Following the transactions, the combined airline would become part of the Oneworld airline alliance, offering service to 138 destinations, including 29 international markets. The carriers also emphasized their commitment to Hawaii, with a focus on retaining and growing union-represented jobs in the state.
While the airlines did not address potential challenges from regulators, the Biden administration has a history of opposing consolidation in various industries, including airlines. Both Alaska and Hawaiian Airlines believe that less than 3% of their network routes overlap, and they only share 12 overlapping markets out of 1,400 combined flights per day.
Early reactions from employee groups at both airlines were cautious, with flight attendant and union groups expressing concerns about the potential impact on employee benefits and job security. Further details about the merger are expected to be provided during a press conference on Sunday evening.
This is a developing story, and updates are expected.
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