Alaska Airlines Will Buy Hawaiian Airlines For $1.9 Billion—Faces Likely DOJ Scrutiny



Alaska Airlines will buy Hawaiian Airlines for $1.9 billion, the companies said Sunday, in a deal that would bring Alaska Airlines closer to the big four Airlines: American, Delta, Southwest and United.

Key Facts

The deal includes $900 million in Hawaiian Airlines’ net debt and amounts to $18 per share in cash, the companies said in a press release.

The combined company will be based in Seattle under the leadership of Alaska Airlines CEO Ben Minicucci, who called the deal an opportunity to “expand options for West Coast and Hawaii travelers.”

Hawaiian residents will be able to access three times the number of North American destinations through the combined airline, which will fly to 138 destinations, including non-stop flights to 29 international locations, the companies said.

The deal comes after Alaska Air Group cut its full-year profit outlook in October amid rising labor expenses, higher fuel prices and softening consumer demand.

Surprising Fact

With its purchase of Hawaiian, Alaska Airlines will control an 8 percent share of the domestic airline industry—but could drop from the No. 5 airline, where it is now, to No. 6, behind JetBlue Airways, but only if JetBlue’s effort bid to buy Spirit Airlines is approved.

Key Background

Alaska Air has grown to become the fifth largest airline group in North America, but still holds far less market share than United, Southwest, Delta and American. It acquired Virgin America in 2016 for $2.6 billion, winning a bidding war with JetBlue. Earlier this year, Virgin Group won a trademark dispute with Alaska Air when a London judge ruled it is required to pay Virgin Group approximately $8 million in minimum royalties every year until 2039, despite shedding its branding. Alaska Air said it will maintain the Hawaiian Airlines brand under the merger.

What We Don’t Know

Whether the deal will face a challenge from the Justice Department over antitrust concerns. The agency successfully stopped a merger between American Airlines and JetBlue in the Northeast, arguing in a lawsuit settled in May that the lack of competition would harm consumers by driving up prices. It is also suing JetBlue to stop it from buying Spirit.

NytimesAlaska Airlines Plans to Buy Hawaiian Airlines
ReutersAlaska Air cuts profit view as rising labor costs cast shadow


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