(NEW YORK) — Hawaiian Airlines and Alaska Airlines are one step closer to closing a $1.9 billion deal that would mark the largest consolidation of any U.S. carrier since 2016.
The deadline for regulatory review by the Department of Justice expired earlier this week without any interference, meaning the two companies have cleared the first major hurdle for their merger plans, which were first announced last December.
In order for the deal to move forward, it will need to pass scrutiny from the U.S. Department of Transportation — a customary closing condition — which includes an interim exemption application.
The Justice Department has already been skeptical of airline partnerships and most recently blocked the proposed merger of JetBlue and Spirit.
While it’s not immediately clear how long the approvals process could take, experts have said it can take years for the behind-the-scenes logistics to settle into place.
Pending the remaining approvals, this acquisition would be the second for Alaska Airlines within the past decade, after it beat out JetBlue in a bidding war for Virgin America.
Under the proposed Hawaiian-Alaska merger, both airlines would remain intact and continue to operate under their current names.
Alaska Airlines statement on next steps for Hawaiian merger
“This is a significant milestone in the process to join our airlines,” the SeaTac, Washington-based carrier announced in a statement this week. “During the HSR [Hart–Scott–Rodino Antitrust Improvements Act] time period, Alaska worked closely with the Hawai’i Attorney General to reinforce and expand upon our commitments for the future of Hawaiian Airlines and to Hawai’i consumers. These include plans to maintain the Hawaiian Airlines brand and local jobs and continue providing strong service between, to, and from the Islands.”
The airline also said that following the potential next steps, “we will complete work to close the transaction, and proceed with integrating the two companies, welcoming Hawaiian Airlines guests and employees into Alaska Air Group, and expanding benefits and choice for consumers throughout Hawai’i, the Asia-Pacific region, continental United States and globally.”
Governor of Hawaii comments on possible airline merger
After the latest details on the merger were released, Hawaii Gov. Josh Green said in a statement that he and his staff have worked with Alaska Airlines leadership over the past few months “to carefully review the potential impacts of a consolidation, and we insisted that any changes expand travel options for our residents and preserve union jobs.”
“Alaska has reinforced commitments to our state and will maintain the Hawaiian Airlines brand, preserve and grow union jobs in our Hawai’i, as well as continue to provide crucial passenger and air cargo service to, from, and within the islands,” he said. “The merger will vastly expand the number of destinations throughout North America for Hawai’i residents that can be reached nonstop or one-stop from the islands, and HawaiianMiles members will retain the value of their miles while gaining access to more destinations around the world.”
Green added that he’s “confident” this merger would “offer more travel options for Hawai’i residents and local businesses” and “enhance competition across the U.S. airline industry.”
What a merger of Alaska and Hawaiian Airlines means for travelers
The travel experts at Going.com — formerly Scott’s Cheap Flights — weighed in on the possible deal and what it could potentially mean for customers.
“Competition between airlines is the single biggest cause of cheap flights. A merger between two airlines — whose route maps have a portion of flights that overlap — would result not in more cheap flights for consumers but, to some extent, fewer,” Katy Nastro, a spokesperson for Going, told ABC News.
Additionally, the team of experts believe that certain markets may be affected worse than others.
“The Justice Department did not require concessions, meaning that Alaska could eventually make some cuts on routes that consistently underperform, such as the inter-island routes,” she explained.
There has been no official statement from the airline about when or where any possible changes to routes would take place.
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