Alaska Airlines Set to Acquire Hawaiian Airlines | DOJ Review Period Expires

In a significant yet quietly handled development, Alaska Airlines has just announced that the U.S. Department of Justice (DOJ) allowed the review period for its proposed acquisition of Hawaiian Airlines to expire without further comment. This marks a critical step forward in the process under the Hart-Scott-Rodino (HSR) Act, bringing Alaska Airlines closer to completing its strategic acquisition of Hawaiian Airlines.

The next hurdle remains approval from the U.S. Department of Transportation (DOT), which will rule on an interim exemption application before the deal can proceed.

DOJ review period passed without action.

Under the HSR Act, certain large mergers and acquisitions, including the proposed combination of Alaska Airlines and Hawaiian Airlines, are subject to mandatory pre-merger notification and a subsequent waiting period.

During this time, the DOJ reviews the potential competitive impacts of the merger. The assigned agency can either allow the waiting period to expire, terminate it early, or issue a request for additional information—commonly known as a “Second Request.” If the agencies identify any antitrust concerns, they can take steps to block or modify the merger.

In this case, the DOJ allowed the waiting period to expire after multiple extensions, without further action. This suggests that, from the DOJ’s perspective, the merger does not pose significant antitrust concerns, or at least none that require immediate intervention. This is a substantial victory for Alaska Airlines as it navigates the complex regulatory landscape associated with large-scale mergers.

Industry insiders were taken aback by the latest development.

Given the number of delays, and potential roadblocks that had previously cast doubt on the deal’s success, at least in the totality of its proposed form, the expiration came as a surprise. The swift and unremarked expiration of the DOJ review caught many off-guard, especially in light of the concerns raised about competition, market overlap, interisland service commitment, and the overall impact on Hawaii’s air travel landscape.

For weeks there have been widespread speculation that multiple issues could have derailed the merger, yet Alaska Airlines now appears to be moving forward, albeit quietly at first, with the acquisition, leaving the industry to ponder exactly what might have changed behind the scenes to allow the deal to proceed so unexpectedly and uneventfully today. We hope to learn what actually occurred at some point.

Alaska Airlines’ Commitment to Hawaii.

During the DOJ review, Alaska Airlines worked closely with the industry and state government to address concerns specific to our local market. Alaska Airlines has reiterated its commitment to maintaining the Hawaiian Airlines brand, preserving local jobs, and continuing to provide robust service to, from, and within the Hawaiian Islands. They have also committed to preserve the value of HawaiianMiles at a one-to-one ratio when they become Alaska Mileage Plan miles.

Their pledge is seen as crucial to gaining support from both regulators and the public in Hawaii, where the airline industry plays a vital role in our travel economy and everyday life.

Alaska Airlines’ strategic approach appears to be aimed at mitigating any potential backlash from the merger. By maintaining the Hawaiian Airlines brand and promising to safeguard local employment, Alaska has, from the outset, presented the merger as beneficial rather than disruptive to Hawaii’s air travel market.

Remaining steps to complete in the merger process.

While the DOJ review period’s expiration is a major milestone, the merger is not yet an entirely done deal. The proposed combination still requires approval from the U.S. Department of Transportation (DOT).

Alaska Airlines has submitted an interim exemption application, which, if approved, would allow the merger to proceed while the DOT completes its own review. This process typically involves yet another thorough examination of the merger.

Should the DOT next grant the interim exemption and approve the merger, Alaska Airlines will begin the complex process of integrating Hawaiian Airlines into its operations. This will involve aligning the two carriers’ fleets, routes, loyalty programs, technologies, and other key aspects of their businesses. Alaska Airlines has emphasized that this integration will be handled with finesse to ensure a smooth transition for both employees and customers.

Industry and consumer implications.

The deal is now poised to reshape the competitive landscape of air travel, particularly in the Pacific region. For consumers, the merger could mean more extensive route networks and increased options for travel between the U.S. mainland, Hawaii, and Asia-Pacific destinations. However, it also continues to raise concerns about reduced competition and the potential for fare increases on certain routes.

In Hawaii, where Hawaiian Airlines has long been the dominant player, the merger’s impact will be particularly significant. Alaska Airlines has sought to reassure stakeholders that it will continue to support the local economy and maintain the service that Hawaiian Airlines’ customers have come to expect. However, industry observers will be watching closely to see how the merger impacts airfares, service levels over time, and overall competition in the region.

As Alaska Airlines starts to move beyond this enormous hurdle to acquiring Hawaiian Airlines, the completion of the DOJ review period without further comment marks a crucial step. Alaska Airlines appears to be strategically positioning itself to integrate Hawaiian Airlines in a way that benefits both the company and the consumers it serves. The coming months will be critical as the final pieces of this merger fall into place, and its true impact on the aviation industry and Hawaii travel becomes clear.

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