Alaska-Hawaiian merger faces a Justice Department that has been skeptical of airline deals
Alaska Air Group’s executives spent months working on its plan to buy rival Hawaiian Airlines. The airlines’ leaders will now spend many more trying to convince regulators the acquisition should go ahead. It could be the latest in a string of challenges brought by President Joe Biden’s Justice Department against airline deals it views as anticompetitive. The $1.9b cash and debt deal, announced Sunday, comes less than a year after the Justice Department sued to block another deal: JetBlue Airways’ $3.8b cash acquisition of budget carrier Spirit Airlines. The Justice Department argued that the purchase of Spirit would harm consumers in the form of higher fares if the budget airline is absorbed by JetBlue. Earlier this year, the Justice Department successfully broke up JetBlue’s partnership with American Airlines in the US Northeast. In both that limited alliance and the Spirit acquisition, JetBlue argued it needed to team up to better compete with larger rivals, and grow, when planes and pilots are in short supply. More than a decade of airline mergers left four airlines — American, Delta, Southwest and United — in control of around 80% of U.S. airline capacity. Alaska has a more than 5% share of US airlines’ capacity and Hawaiian has a less than 2% share, according to Cirium data. The Alaska-Hawaiian deal comes as Hawaiian has faced a host of challenges including like the Maui wildfires, increased competition in Hawaii from Southwest and a slower recovery of some long-haul Asia routes. The Alaska-Hawaiian and JetBlue-Spirit deals are different in approach, but the Alaska acquisition could still face hurdles with regulators. For example, JetBlue plans to remodel Spirit’s tightly packed yellow planes to take out seats and bring on board more amenities like seat-back screens, while getting rid of the Spirit brand and model entirely. Alaska, meanwhile, said it plans to keep separate Hawaiian and Alaska brands, two carriers that are key to the far-flung states they serve.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-12-05/oneworld/alaska-hawaiian-merger-faces-a-justice-department-that-has-been-skeptical-of-airline-deals
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Alaska-Hawaiian merger faces a Justice Department that has been skeptical of airline deals
Alaska Air Group’s executives spent months working on its plan to buy rival Hawaiian Airlines. The airlines’ leaders will now spend many more trying to convince regulators the acquisition should go ahead. It could be the latest in a string of challenges brought by President Joe Biden’s Justice Department against airline deals it views as anticompetitive. The $1.9b cash and debt deal, announced Sunday, comes less than a year after the Justice Department sued to block another deal: JetBlue Airways’ $3.8b cash acquisition of budget carrier Spirit Airlines. The Justice Department argued that the purchase of Spirit would harm consumers in the form of higher fares if the budget airline is absorbed by JetBlue. Earlier this year, the Justice Department successfully broke up JetBlue’s partnership with American Airlines in the US Northeast. In both that limited alliance and the Spirit acquisition, JetBlue argued it needed to team up to better compete with larger rivals, and grow, when planes and pilots are in short supply. More than a decade of airline mergers left four airlines — American, Delta, Southwest and United — in control of around 80% of U.S. airline capacity. Alaska has a more than 5% share of US airlines’ capacity and Hawaiian has a less than 2% share, according to Cirium data. The Alaska-Hawaiian deal comes as Hawaiian has faced a host of challenges including like the Maui wildfires, increased competition in Hawaii from Southwest and a slower recovery of some long-haul Asia routes. The Alaska-Hawaiian and JetBlue-Spirit deals are different in approach, but the Alaska acquisition could still face hurdles with regulators. For example, JetBlue plans to remodel Spirit’s tightly packed yellow planes to take out seats and bring on board more amenities like seat-back screens, while getting rid of the Spirit brand and model entirely. Alaska, meanwhile, said it plans to keep separate Hawaiian and Alaska brands, two carriers that are key to the far-flung states they serve.<br/>
