Alaska Airlines announced that its $1.9 billion merger with Hawaiian Airlines has passed a significant regulatory hurdle, as the U.S. Justice Department’s antitrust review period concluded without any legal action to block the transaction. This development marks a critical step in the merger process, eight months after the two airlines first unveiled their plans to combine. The merger still requires approval from the U.S. Transportation Department before it can be finalized. The timeline for this next phase remains uncertain.
If completed, the merger would represent the largest U.S. airline consolidation since Alaska Airlines’ acquisition of Virgin America in 2016, according to Mergermarket. The combined airline would operate a fleet of over 360 aircraft, serving more than 130 destinations while maintaining the distinct brands of both Alaska and Hawaiian Airlines.
In a statement, Alaska Airlines highlighted the expiration of the Justice Department’s regulatory investigation period under the Hart-Scott-Rodino Antitrust Improvements Act as a significant milestone. “This is a significant milestone in the process to join our airlines,” the company stated.
The announcement follows a series of legal challenges in the airline industry. Earlier this year, the DOJ successfully blocked JetBlue Airways’ acquisition of Spirit Airlines and dismantled a partnership between JetBlue and American Airlines in the Northeast. Despite these setbacks for other carriers, Alaska Airlines and Hawaiian Airlines have managed to navigate the regulatory landscape without similar impediments.
Hawaiian Airlines has faced a challenging environment in the lead-up to the merger, dealing with the aftermath of the Maui wildfires, increased competition from Southwest Airlines, and the sluggish recovery of travel routes to and from Asia following the COVID-19 pandemic. Since the beginning of 2020, Hawaiian has reported net losses in nearly every quarter, though recent booking trends have shown signs of improvement. Following Alaska Airlines’ announcement, Hawaiian’s stock surged more than 11%, nearly doubling in value over the past year, even as other airline stocks have declined.
The U.S. Transportation Department, which is responsible for the final approval of the merger, stated that it is currently reviewing the application. The department emphasized that it can only approve the transaction if it is determined to be in the public interest.
As the merger advances, industry observers and stakeholders will be closely watching the Transportation Department’s decision, which will determine whether this significant airline merger will move forward.
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