Alaska Airlines announced on Wednesday that it has finalized its $1.9 billion acquisition of Hawaiian Airlines, following an agreement with the U.S. Department of Transportation.
As part of the deal, the airlines have committed to maintaining key Hawaiian routes and introducing consumer protections, with the agreement set to last for six years.
This acquisition merges Alaska, the fifth-largest U.S. airline, with Hawaiian, the tenth-largest.
Alaska Airlines CEO Ben Minicucci expressed optimism about the merger, stating it will enhance competition and benefit consumers by expanding access to both airlines’ networks.
“It’s just a few more arrows in our quiver on how we deploy airplanes across our entire network,” Minicucci said.
He also noted that Alaska will gain access to Hawaiian’s fleet of wide-body airplanes, allowing for more efficient use of aircraft across various routes.
Minicucci expects the merger to generate at least $235 million in cost savings by the third year.
The U.S. Department of Justice, which has been tough on airline mergers under President Joe Biden, chose not to block this deal. This decision follows the department’s previous actions to block the JetBlue-Spirit Airlines merger and challenge the Northeast Alliance between American Airlines and JetBlue.
As part of the agreement, Alaska and Hawaiian Airlines will protect frequent flyer rewards, maintain important Hawaiian routes to the mainland and between islands, ensure fair access to Honolulu airport, and offer travel credits or miles for airline-caused disruptions.
Hawaiian Airlines’ stock will no longer be traded on Nasdaq, while the combined company will continue trading under Alaska Airlines’ ticker symbol ALK on the New York Stock Exchange.
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