Alaska Air Group is set to acquire Hawaiian Airlines in a $1.9 billion deal, marking the second potential airline merger in less than two years, according to a report by CNBC. The merger is expected to add to the ongoing regulatory challenges in the industry.
Alaska will take on $900 million of Hawaiian’s debt, paying $18 a share for the rival airline. Hawaiian’s market cap is currently at around $250 million with its shares falling around 53% this year. The struggles faced by Hawaiian Airlines include challenges from Maui wildfires, increased competition, and the slow travel recovery from Asia post-pandemic.
Alaska’s CFO, Shane Tackett, believes that the acquisition presents a unique opportunity for growth and to become a leader in the premium-travel Hawaii market. However, the deal also faces potential regulatory hurdles, with the Justice Department showing opposition to previous airline mergers.
If the merger goes through, the combined company will be based in Seattle, led by Alaska CEO Ben Minicucci. Both airlines plan to operate under a single platform, combining into a 365-airplane fleet covering 138 destinations. This move marks a significant shift for Alaska as it will acquire a complex mix of Boeing and Airbus jets under Hawaiian’s fleet.
Additionally, the merger will allow Alaska Airlines to triple nonstop or one-stop flights from the Hawaiian islands to destinations throughout North America. Moreover, Hawaiian’s long-haul flights to and from Asia will come under Alaska’s umbrella. The deal is estimated to bring at least $235 million of “run-rate synergies” to Alaska Airlines within the next two years.
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