Alaska Airlines CEO, Ben Minicucci, spoke at a JP Morgan conference, where he insisted he’s confident in the merger being approved in spite of what appear to us and others to be daunting regulatory challenges that are upcoming. One thing that’s been highlighted by Alaska, Hawaiian, and others is something near and dear to Hawaii travelers that might also help to assuage the U.S. Justice Department.
In a fast-evolving airline industry landscape, especially here In Hawaii’s skies, Ben Minicucci maintains a positive outlook on the proposed $2B acquisition of Hawaiian Airlines. These are Minicucci’s first remarks since the court ruling that permanently blocked the nearly $4B Spirit-JetBlue merger. He said, in fact, that he thinks that the JetBlue decision sets a precedent that will play in favor of the Alaska/Hawaiian deal. “I think it’s a positive for us,” he said.
According to Minicucci, the Spirit-JetBlue ruling was emphatic about the need to preserve airline competition for the public’s benefit. He sees Alaska’s position in this proposed merger as one of maintaining competitive pricing strategies while integrating Hawaiian within the Alaska portfolio.
Minicucci has, since the outset, acknowledged some minimal route overlap between Hawaiian and his company. He restated Alaska’s commitment to persevering in the upcoming regulatory challenges toward the goal of a successful merger process. Minicucci feels that Alaska’s operational model is one that distinguishes the Alaska-Hawaiian merger from previous merger plans.
U.S. Justice Department wants more details.
Minicucci said that the two companies are now in receipt of the 2nd request for information from regulators as part of the antitrust investigation process at the Justice Department. He acknowledged the painstaking nature of the regulatory review and said that he is confident in the process, being both transparent and diligent.
Next significant update is expected in three months’ time.
Minicucci said he expects to be able to provide more information on the status of the merger in June after the airlines provide additional information to the Justice Department which is due May.
At this point, the Justice Department’s success in halting the JetBlue/Spirit merger in its tracks won’t stop Alaska from giving this all that they have.
The court’s decision blocking the JetBlue/Spirit merger was based on the prospect that it would “harm cost-conscious travelers” who use airlines like ultra-low-cost Spirit. Alaska, of course, thinks that the Hawaiian deal differs significantly.
Some in the industry believe that the different issues at hand in this deal may be significant enough to pass muster. That contention is based largely on the minimal overlapping routes and largely complementary route networks, plus one more trick that Alaska has up its sleeve.
Alaska says that the acquisition will in fact enhance competition and provide travelers with more options, saying, “Our deal combines two airlines with complementary networks, and we believe the transaction will enhance competition and expand choice for consumers.”
Will keeping the Hawaiian Airlines brand separate be the key to regulatory success?
JetBlue had planned to integrate Spirit with its own operations. Alaska, on the other hand, says it will maintain the Hawaiian brand as separate and distinct from the Alaska brand. Together with the largely differing and complementary routes, these may form the basis for this case attaining regulatory approval.
Probably not of primary concern to the Justice Department, Hawaiian Airlines largely remains a symbol of pride as Hawaii’s largest private employer. The idea of a good portion of the company relocating from Honolulu to Seattle, however, may somewhat change people’s feelings about the merged company.
There remains concern about Alaska’s track record in retaining brands. The Virgin America brand was killed off by Alaska after that $2.6B deal went through in 2017. In spite of promises to retain features Virgin America customers loved, ultimately, Alaska said that consistency and efficiency required a single brand. Virgin’s fleet also ultimately ended up at American Airlines.
In summary, here’s where the Alaska/Hawaiian deal stands.
The seemingly valid points that Alaska Airlines makes notwithstanding, many still believe that the airline-merger-adverse Justice Department may cast a shadow on this deal ever coming to fruition. Until then, Alaska and Hawaiian continue to forge ahead while fully recognizing the potential pitfalls they may face. Without the merger, we are not sure what will become of Hawaiian Airlines, and we remain hopeful of the merger happening.
Eskimo on the tail of some of those 787’s in 3..2 . .1
Clearly the synergies of these two airlines greatly enhances both in the market. As noted below, just the HA on board product combined with the AS website/ customer service will benefit the consumer. The combination of the two route structures will create many new one stop options to Hawaii. Also creates opportunities for growth between Hawaii and new long haul destinations both on the mainland and Internationally. For obvious reasons their competitors will lobby against it, but not sure how much that sways the DOJ?
Appreciate your coverage …but given what appears to be cheerleading for this merger (in the shadow of all the safety issues, coverups and mismanagement by Alaska and Boeing …have to ask if you are shareholders in Hawaiian?
Hi Stacy.
Not in ether company.
Aloha.
How about Southwest?
Hi Jim.
It’s only available on their website. And they will place first party cookies on your device.
Aloha.
Sorry I’m not clear on what that means. Thanks for your reply?
Hi Jim.
Perhaps we don’t understand what you were asking about. We’re sorry if that’s the case. Are you asking about the fact that Southwest isn’t on Google Flights or is it about tracking tools the airlines including Southwest use? Let us know and we’ll try to help.
Aloha.
Aloha Stacy… Can you please elaberate in detail on what you view as safety issues, coverups and and mismanagement specifically by Alaska Airlines? I can clearly see see where you could point your fingers at Boeing, however, I’d be interested to hear your points towards Alaska Airlines?
I was part of management at a Fortune 50. The philosophy was to always acquire potential competitors whenever possible, and to willingly overpay for them so that their management would get good stock payouts and negotiation bonuses for the transaction. The PR team would construct “business reasons” which “benefit society” to use, but we were willing to overpay since we would make more money in the long run – either by putting them out of business or changing their offerings over a period of many years. Thus we would be able to charge more with less competition, even if we lowered prices for a few years. (And this was usually coordinated with other so-called “competitors”, who were responsible for buying others with better offerings.)
HA is done if this merger does not go through. As you have stated they are going through money faster than they are making it. They are on a glide path that is not sustainable.
Onboard is where they still shine. My experiences there have been great.
However, after a year their website is still FUBAR. It appears that they are not even trying to make it user friendly.
Try making a roundtrip first class reservation. It’s impossible. It always shows “Mixed cabin”. You can only get first class on one of the legs.
On the app you can get first class in both directions.
I could go on, but Alaskas’ website and customer service are much better.
Thank you for the updates.
Weird. I just tried it five times on different mainland to HNL roundtrips. I chose a first class seat when selecting each leg and it took me correctly through to paying for them. It does show “mixed cabin” on the first leg’s first class box, but I think that’s just required since it doesn’t know if the second leg has first class available until I actually pick the second leg.
And I’ll admit the HA website still has gaps (where’s “change my flight”???) but I don’t see the issue Kelly is describing.
hope Hawaiian keeps running the 330’s -no Boeings for a lot of folks
You do realize that Hawaiian, and other airlines, flying the Airbus A321’s are having to cancel flights due to engine and other problems with the A321’s? Boeing isn’t the only aircraft manufacturer having problems.