Alaska Air Closes Hawaiian Acquisition

By Alison Sider

Alaska Air completed its acquisition of Hawaiian Airlines in a deal that the carriers have said will connect Hawaii to more U.S. destinations and give Alaska a path toward international growth.

The Department of Justice last month finished its review of the $1 billion deal without challenging it on antitrust grounds-an about-face for antitrust enforcers who have fought other recent airline tie-ups. The Department of Transportation on Tuesday said the carriers could go ahead provided they adhere to certain consumer protection guarantees and maintain flying levels on critical routes.

For Alaska Chief Executive Ben Minicucci, who will lead the combined airline, this will be his second go-around navigating a big merger. Minicucci oversaw the integration of Alaska and Virgin America after Alaska bought Virgin in 2016.

"We've done this before we know how to do it," he said in an interview, adding that he hopes the process can be finished within 24 months or sooner. Alaska shares fell 2.4% Wednesday morning, while U.S. stock indexes were little changed.

The airlines will need government approval to combine under a single operating certificate, they'll have to transition to a single reservation system, and will need to strike collective bargaining agreements with unions.

Minicucci reiterated that Hawaiian's brand will remain, with its iconic logo still flying aircraft tails to and from the islands, but said the carrier is still figuring out the exact details.

Customers will soon be able to transfer their miles between Alaska and Hawaiian loyalty accounts to redeem them for trips at a one-to-one ratio. Over the coming weeks and months, the airlines will start selling tickets on one anothers' flights and will more closely align their loyalty programs. The airline is also launching a program offering discounts and other perks for residents of Hawaii.

Alaska will still be much smaller than the four airlines that dominate the U.S. market. But Minicucci said the deal will make the combined airline a "fierce competitor."

The acquisition gives Alaska the opportunity to transform its Seattle hub into an international gateway. The airline hasn't yet said where it hopes to fly, but Minicucci said it will look at possibilities around the world.

"The question is not if we fly international out of Seattle, the question is going to be when we do it," he said.

(END) Dow Jones Newswires

September 18, 2024 11:48 ET (15:48 GMT)

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