Alaska Air Acquires Hawaiian Airlines in $1.9 Billion Deal
- Category: News
Alaska Air (ALK) revealed its intention on Sunday to acquire Hawaiian Airlines (HA) for $1.9 billion, following several months of negotiations, as stated by Alaska Airlines CEO Ben Minicucci. The deal encompasses $900 million in Hawaiian Airlines debt.
Minicucci, speaking at a news conference, emphasized the strategic benefits of bringing together two airlines with strong regional loyalties, foreseeing expanded domestic and international choices for customers in both states. The merger, expected to take between nine and 18 months, will maintain the distinct brands of both companies, a decision made to honor the nearly 100-year legacy of the airlines and the communities they serve.
A Good Deal:
With both states heavily reliant on air travel, the merger positions Honolulu as the second-largest hub for the combined company, facilitating enhanced international connectivity for West Coast travelers through Hawaii.
The expanded fleet, growing from about 300 to 365 planes, will serve a total of 138 destinations, including non-stop service to 29 top international destinations. Alaska’s membership in the Oneworld alliance will provide Hawaiian Airlines loyalty customers with improved benefits, including lounge access and an enhanced credit card loyalty program.
Minicucci, set to become the CEO of both airlines, characterized the move as “pro-consumer,” aiming to bolster competition with major carriers like United, Delta, Southwest, and American Airlines, which currently dominate 80% of the domestic market share.
Acknowledging potential antitrust scrutiny, especially in the wake of recent legal proceedings involving JetBlue Airways and Spirit Airlines, Minicucci deferred questions on timing, stating, “We’ll let the lawyers deal with that issue.”
Alaska Airlines and Hawaiian Airlines CEOs break down $1.9 billion cash merger
A Dual-brand Strategy:
Alaska Airlines CEO Ben Minicucci underscores the significance of retaining both brands in the combined entity, emphasizing the dual-brand strategy as essential for a successful integration. He assures that the decision, though unique, aligns with the respect owed to Hawaiian Airlines’ 94-year legacy and substantial loyalty. The deal, valued at $1.9 billion, awaits regulatory approvals and shareholder consent, with the closing anticipated in 12-18 months.
Ingram echoes the sentiment, highlighting the emotional impact on Hawaiian Airlines’ 7,300 employees but finds solace in the preservation of the Hawaiian brand, a testament to Alaska’s respect for the airline’s longstanding history.
Earlier coverage details the acquisition’s financial aspects, with Alaska Air Group, Inc. set to pay $18 per share for Hawaiian Holdings, Inc., alongside assuming $900 million in Hawaiian debt. The boards of both companies have approved the transaction, signaling an exciting evolution in providing enhanced travel experiences and expanded options for West Coast and Hawaii travelers under the leadership of Minicucci in Seattle. The merged organization anticipates tripling destinations and establishing Honolulu as a key hub for improved international connectivity.
