Alaska Air Seeks Dismissal As Hawaiian Merger Hangs in Balance

Alaska Air Seeks Dismissal As Hawaiian Merger Hangs in Balance

The proposed acquisition of Hawaiian Airlines is a very significant and unprecedented move that is set to permanently reshape the landscape of air travel to and from Hawaii. We expect to have word from the U.S. Justice Department soon on the Hawaiian Air acquisition, or by August 5 at the latest. That having been said, the actual merger could drag out well after the first announcement from the federal government.

Yesterday, Alaska Airlines formally requested that a U.S. Federal Court dismiss a recently filed consumer lawsuit that seeks to block its proposed $1.9 billion acquisition of Hawaiian Airlines. This is yet another important milestone along the path.

Hawaiian Airlines has been integral to Hawaii since 1929.

Hawaii, which relies heavily on air travel for tourism and local connectivity, has depended on Hawaiian Airlines as its critical link both between the islands and the rest of the world. The proposed merger with Alaska Airlines, announced in December, continues to stir considerable attention and debate among both consumers and stakeholders.

What’s at stake is huge for Hawaii and the industry.

Concerns continue to be raised about potential impacts on competition and fare prices, given the dominant roles both carriers play in the Pacific region. That notwithstanding, Hawaiian Airlines is in a very challenging financial position, continuing to sustain huge losses in its operations while facing enormous investments in infrastructure and aircraft going forward. It isn’t at all clear that Hawaiian can survive in its current form without the Alaska merger. It has been widely rumored that the likely alternative will be a Hawaiian Air bankruptcy filing.

Alaska Air Seeks Dismissal As Hawaiian Merger Hangs in Balance

On Friday, Alaska Airlines urged the U.S. District Court for the District of Hawaii to reject the lawsuit filed in April by a group of consumers from Hawaii, California, and other states. The airline argues that the lawsuit fails to demonstrate how the merger would cause “concrete, particularized, and impending harm” to passengers. Labeling the plaintiffs as “serial litigants,” Alaska Airlines seeks to dismiss their allegations as “boilerplate” and not grounded in factual evidence that their proposed merger would reduce competition or create any monopoly. The plaintiffs in the suit however, describe themselves very differently, as being passengers and prior travel agents.

In the legal matter (attached below), Alaska says that “Plaintiffs identify themselves as airline passengers, though they do not claim any connection to Alaska or Hawaiian. Most of them are also serial litigants who
have challenged nearly every airline merger in recent history, albeit without success. Recycling the same boilerplate allegations they have directed at other airline mergers, Plaintiffs allege that this merger violates Section 7 of the Clayton Act. The JetBlue-Spirit merger failed when a federal judge who found that it violated that act.

Alaska is represented by the law firm O’Melveny, whose top lawyers, are reported to earn up to $1200+ per hour, are clearly experts in such matters. They are also represented by Margery Bronster, who was the prior Hawaii Attorney General. In our Google search attempt to confirm either side’s allegations related to plaintiffs being “serial litigants” or not, we were unable to reach to any conclusion.

Alaska restates the merger’s benefits.

Alaska Airlines contends in its filing that the merger would significantly benefit consumers by expanding global access for the airlines’ customers and enhancing service offerings.

Alaska has indicated that Hawaiian would remain indefinitely as a separate brand, post-merger. Alaska indicated when they acquired Virgin America that they “would consider” keeping that brand. In the end, that turned out not to be the case. At that time the company said, “We are looking at that because we do believe in the power of the Virgin America brand, and we don’t want to lose all that loyalty and revenue that exists today… [we are] taking a good look at running two brands for some period of time, perhaps forever.”

Alaska emphasizes that the consolidation with Hawaiian is designed to strengthen its competitive position against larger, major national airlines, which it believes will ultimately benefit the combined consumer base with more choices and improved services. Clearly, it’s complicated.

Enormous challenges facing Hawaii Airlines are undeniable.

Hawaiian Airlines continues to incur losses, including $100 million in the last quarter of 2023 and $138 million in the first quarter of 2024. That continues at a rate of more than a million dollars a day in the red.

If it remains independent, Hawaiian will face intense competition from Alaska, as well as behemoths American, Delta, Southwest, and United Airlines.

Other pressures on Hawaiian Airlines include the need to acquire the remaining nine aircraft of its planned Boeing 787 Dreamliner fleet and replacement of its aged Boeing 717 interisland fleet. Hawaiian could well be the last carrier to fly those 717 planes as Delta and Qantas quickly divest themselves of the aircraft.

Hawaiian is also still suffering from a failed upgrade to its Amadeus reservation system. Editor Jeff bemoaned spending nearly an hour on the phone yesterday with Hawaiian Airlines’ off-shore call center, trying to book an upgrade. In the end, it still didn’t happen, and he needs to plan for another call. Hawaiian has never managed to complete the implementation of basic, expected online features such as these.

Hawaiian Airlines “once had routes to 18 international destinations, including American Samoa, Brisbane and Sydney, Australia, Beijing, Rarotonga, Papeete, Guam, six Japan airports, Auckland, Manila, Apia, Seoul, and Taipei.” But of those, unfortunately, a majority did not work out and were either terminated or reduced by half. — Beat of Hawaii

Alaska Airlines could come to Hawaiian’s rescue at the perfect time.

The planned acquisition would undoubtedly be great for Hawaiian. It will also bring opportunities to both airlines. Alaska will become a much larger airline with widebody fleets, while Hawaiian will become a Oneworld Alliance member together with all the advantages of Alaska’s strong, proven abilities. Scaling will benefit a larger combined company, including Hawaiian using the Alaska Airlines reservation system, its IT infrastructure, and more.

Implications for Hawaii’s Travel Sector

For Hawaii, the stakes associated with the planned deal are high. The merger would, without doubt, redefine flight routes, schedules, airfare prices, and more, impacting both tourists and residents. Stakeholders in Hawaii travel are well aware that the integration of these two major airlines, in terms of the state, could either enhance or hinder the connectivity and financial well-being of Hawaii.

We will continue to update you on the Hawaiian Air/Alaska Air merger and welcome your comments!


Leave a Comment

Comment policy:
* No profanity, rudeness, personal attacks, or bullying.
* Hawaii focused only. General comments won't be published.
* No links or UPPER CASE text. English please.
* No duplicate posts or using multiple names.
* Use a real first name, last initial.
* Comments edited/published/responded to at our discretion.
* Beat of Hawaii has no relationship with our commentors.
* 1,000 character limit.

Your email address will not be published. Required fields are marked *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

17 thoughts on “Alaska Air Seeks Dismissal As Hawaiian Merger Hangs in Balance”

  1. Hawaiian Airlines is a niche airline meaning their primary function is to bring travelers to the Hawaiian islands. Hawaii has no where near recovered fully from the Covid epidemic. That combined with the significant drop in Japanese tourism to Hawaii due to the current exchange rate has put Hawaiian Airlines in a big hole. Their infrastructure and software issues didn’t help either.

    1. Is Hawaiian Airlines paying the state Rent and Landing Fees? It must be hard if you lose over $1M a day. The state won’t shut you down if you don’t pay your bills…Not Fair and Not Right!

  2. I booked our flight to Las Vegas in last November to spend Thanksgiving with our family. I booked flight long before to get the best seats for my husband who is immune compromised. When I tried to check in 24 hours before, our seats had been changed to the back of the plane. I called your offshore agent with heavy Philippine accent. She said it was all my fault because I did not pay… I had confirmed reservation. Anyway, I had to cancel the trip. I would not ever fly Hawaiian again

    1. That is one of the funny things about the lawsuit. They claimed the customer service would be offshored. Considering that is already the case with HA while AS has US base customer service, it is hard to take this suit seriously.

  3. I hope Alaska/ Hawaiian merger goes through soon because Hawaiian needs this one world alliance with Alaska and it could help boost profits and bring more passengers and more destinations.

  4. I’m considering moving to a state that does not have Hawaiin Airlines, however, does have Alaskan airlines. I don’t want to lose my HA points for travel. I hope the merger takes place by year end!

  5. I don’t think you guys get it.. economics don’t care about the romance of Hawaii having their own airline if it’s economically unfit and can’t compete it goes away That’s how business works.. simple facts are Hawaiian Airlines is insignificant and basically bankrupt those are just facts not my opinion as a matter of fact it’s barely made its whole existence it just can’t compete in today’s marketplace It’s probably a bad idea for Alaska Airlines to get involved it will just drag them down… Everything comes to an end even Hawaiian Airlines…

    1. Is Hawaiian paying the state of Hawaii rent and landing fees? They stiffed the state taxpayers before and they shouldn’t get away with not paying what is owed to the state!

  6. Its good to have a Alaska/ Hawaiian merger because it would make sense for the company and its customers and keep its Hawaiian brand and have Oneworld alliance come together and combine and not have people complaining about the merger.

  7. Hawaiian Air is in dire need of updating all their antiquated systems. We flew back to Maui from Auckland, NZ in February. Hawaiian Air did not allow for online check in, and our flight was for 11:30 pm, so we bought lounge passes to comfortably have dinner and spend time there before our flight. We arrived at Auckland airport by 6:45 pm, only to find out Hawaiian did not open their check in until 8 pm. We had to wait in a very long line, for well over an hour, to “check in”, along with all the other passengers on the flight. It didn’t matter if you had bags to check or not. The boarding process was extremely chaotic. We waited a half hour at OGG for our bags from HNL (bags didn’t make it).
    Never again!!

  8. Aloha,
    Great piece Gents. “Serial litigants” is actually a Latin phrase, loosely translated, means ” a bunch flakes who deserve to be saddled with the legal costs for this abomination, then counter sued into tomorrow”. I foresee the merger failing, given the massive effort by the state and others to eliminate the tourist trade, perfectly timed with a “softening” economy. Barring a few Pacific route authorizations that ALA doesn’t currently have, there no point in acquiring Hawaiian. Alaska is more than capable of expanding their route structure and fleet composition under more favorable conditions and terms.

  9. Having experienced both Hawaiian an Alaska on many trips to the islands, I have found Alaska to be the better run organization. I say that as a former CFO of two national airlines and as a frequent traveler.
    Hawaiian is 90% dependent on price sensitive leisure travel to the islands while Alaska has multiple hubs, standardized equipment and a solid balance sheet. It has a healthy mix of business and leisure clients, a proven and profitable route structure and a mileage plan which gives access to worldwide partners. An intangible, which many travelers might not see, is culture. Alaska wins every time on that measurement as experienced with the in-flight service, gate agents and reservation agents. Hawaiian is doomed without a merger.

  10. Wife and I are Executive Platinum members of American Airlines and would welcome Hawaiian joining One World. We periodically look at moving to the Hawaiian Airlines FF program from AA. HA is currently flying the new 787 out of PHX and AA seasonally removes their 787 out of PHX. However, the HA FF program is lackluster so we haven’t changed. Still tempted to do so as the F class cabin is equivalent to the AA international Business Class on the 787. HA jointing Oneworld would make this a no brainer. Most of our travel is Hawaii – Mainland.

  11. While I appreciate the lawsuit and ensuring this does not become a monopoly….I believe thr most likely outcome of no merger is Hawaiian Airlines going bankrupt. One has to ask themselves: is preventing a potential monopoly worth hundreds, if not more than a thousand, people in multiple states losing their jobs? I suspect that the people filing the lawsuit would respond differently than those who work for HA and the companies dependent on HA (non-HA airport staff, catering companies, advertising agencies, etc….).

  12. Hoping Hawaiian airlines survives but also hope airlines in general avoid Boeing planes for the safety of all that fly and for their business.

  13. We travel from the mainland to Hawaii once or twice a year. We use to travel on Hawaiian Airline, but gave up on it due to the need to use the large, busy airports to access. We’re hoping for the Alaska/Hawaiian airline merger to put them back in the running for our travel plans. Alaska flies out of the smaller airports that we utilize, making access to the Hawaiian airline flights a possibility for us again. Good Luck Alaska/Hawaiian merger.

Scroll to Top