Alaska Airlines announced plans on Sunday to acquire Hawaiian Airlines in a $1.9 billion deal.
The combined airline will maintain the Alaska Airlines and Hawaiian Airlines brands but with a single operating platform, Alaska Airlines said in a news release. The company would serve 138 destinations, including non-stop flights to airports in the Americas, Asia, Australia and the South Pacific.
For Hawaii residents, the company would offer three times the current number of destinations from the state to destinations throughout North America, either nonstop or with a connection.
“At Alaska Airlines, we join an airline that has long served Hawaii and has a complementary network and shared service culture,” Peter Ingram, president and CEO of Hawaiian Airlines, said in the news release.
The deal is likely to face close scrutiny from federal regulators. The Justice Department has aggressively enforced antitrust laws during Biden’s presidency, filing lawsuits to prevent mergers, acquisitions and other deals that could lessen competition in various industries, including aviation.
Last year, the department successfully sued to block a partnership between American Airlines and JetBlue Airways in New York and Boston. He is also currently suing to stop JetBlue from buying Spirit Airlines. A federal trial on that lawsuit is expected to conclude this week, with closing arguments scheduled for Tuesday.
The Spirit acquisition is expected to deliver the rapid growth that JetBlue has eluded in recent years. In 2016, JetBlue lost a bidding war with Alaska for Virgin America.
The airline industry in the United States is dominated by four airlines (Delta Air Lines, American Airlines, Southwest Airlines and United Airlines), all of which reached their size with the help of mergers. United, the fourth-largest airline, controls about 16 percent of the market, according to federal data. Alaska is the fifth-largest airline, with 6.4 percent, followed by JetBlue, with 5.5 percent.
If the Spirit sale is allowed to continue, JetBlue will grow to control more than 10 percent of the market. If Alaska is allowed to buy Hawaiian, the combined company will control just over 8 percent of the market.
Unions representing thousands of workers in both Alaska and Hawaii, including flight attendants, office workers, airport workers and other employees, said they would work closely with the airlines to make sure workers benefit from the merger.
“Our first priority is to determine whether this merger will improve conditions for flight attendants, as well as the benefits the companies have described for shareholders and consumers,” said the Flight Attendants Association, which represents 9,000 Alaska workers. and Hawaii, plus thousands more on various other carriers, they said in a statement. “Our support for the merger will depend on this.”
There is relatively little overlap in the service that airlines provide. Alaska and Hawaii only compete on about 3 percent of the routes they collectively offer. Those routes, which connect Hawaii airports with those in major West Coast cities, account for about 6.7 percent of the seats airlines collectively flew over the past year, according to Cirium, an aviation data provider. .