Timely Hawaiian Airlines Sale As Merger + Aircraft Challenges Escalate

Alaska Seeks To Reduce Uncertainties About Hawaiian Air Purchase

It remains unclear whether the recent antitrust ruling that stopped JetBlue’s Spirit will put the kibosh on Alaska Airlines’ proposed purchase of Hawaiian Airlines. Analysts say it could still go either way. Insights gleaned from the pitfalls of the JetBlue deal may even help Alaska navigate regulatory scrutiny.

In addition to dealing with DOJ, a huge cultural shift is afoot that is in part being addressed with an announcement today by Alaska to soften the transition. This is because Hawaiian Airlines remains a symbol of local pride as the largest private employer in Hawaii, with a distinctive identity that evokes a sense of comfort and place for residents and travelers alike. The potential relocation of operations to Seattle represents a huge cultural shift.

Alaska and Hawaiian remain optimistic and take the next steps.

While Deutsche Bank said the likelihood of DOJ approval of any airline merger has declined further since the JetBlue ruling, Alaska and Hawaiian continue expressing confidence in the $2 billion deal. They emphasize their complementary route networks and enhanced, instead of reduced, competition. The two point to a combined network with less than 3% overlap, largely differentiating this deal with JetBlue/Spirit.

Alaska also intends to retain the Hawaiian brand separately, whereas JetBlue planned to absorb and disappear Spirit.

While many questions remain, and challenge and uncertainty reign, this may still get through regulatory scrutiny.

Alaska announces strategic second-ever community advisory board.

As part of its multi-pronged approach to managing the proposed purchase of Hawaiian, Alaska announced it has just formed a Hawaii Community Advisory Board (HICAB) to understand “Hawaii’s people and culture as the airline merges with Hawaiian Airlines, preserving the legacy of the beloved brand and solidifying Alaska’s expanded role in Hawaii.”

For decades, the airline has maintained its only other advisory board, that one for the state of Alaska. CEO Ben Minicucci said, “The HICAB ensures that our business aligns with local needs, and as we’ve served Hawaii for 16 years, we recognize the responsibility to learn more and serve for generations.” It is intended to represent diverse Alaska Airlines guests in Hawaii, “including gender, ethnicity, and industry sectors such as non-profit, education, healthcare, business, tourism, and agriculture.”

The first HICAB board members are:

Paula Akana – President & CEO, The Friends of ʻIolani Palace
Nāʻalehu Anthony – Founder, Palikū Documentary Films
Todd Apo – VP, Community Partnerships & Public Affairs, Hawai’i Community Foundation
Rosie Davis – Executive Director, Huli Au Ola, Maui County Area Health Education Center (AHEC)
Stephanie Donoho – Administrative Director, Kohala Coast Resort Association
Art Gladstone – EVP & Chief Strategy Officer, Hawai’i Pacific Health
Hōkūlani Holt – Director of Kahōkūala, Hawaiian Cultural Arts Institute, UH Maui College
Stephanie Iona – Community Outreach Manager, Kekaha Agriculture Association
Meli James – Cofounder, Mana Up
Valerie Janikowski – Program Administrator, Lānaʻi Kinaʻole
Kūhiō Lewis – CEO, Council for Native Hawaiian Advancement
Colbert Matsumoto – Chairman, Tradewind Group
Ben Rafter – President & CEO, Springboard Hospitality
Trisha Kēhaulani Watson-Sproat – President, Honua Consulting
Jayson Watts – Director of Environmental Health and Safety, Mahi Pono
Kūhaʻo Zane – COO & Creative Director, Sig Zane Designs & SZKaiao Creative

Can Hawaiian Airlines survive without Alaska Airlines?

Outstanding issues and prospects for Hawaiian remain unclear. Significant problems are upcoming for Hawaiian Airlines, including how to navigate an enormous debt load that Alaska would otherwise absorb, the necessary completion of their Amadeus reservation system, Boeing 787 Dreamliner deliveries, Boeing 717 interisland fleet replacement, and airline-wide WiFi.

Hawaiian also faces competition greater than ever before by players infinitely larger and better funded than them. While it’s all good and well for comments about Hawaiian surviving on its own, that likelihood appears to be diminished.

What’s Up Next in the Alaska/Hawaiian deal?

Hawaiian Airlines has its special stockholders meeting on February 16, 2024, at 11:30 a.m., Hawaii time. The meeting, via a live interactive webcast, will let shareholders consider and vote on the proposal to adopt the Agreement and Plan of Merger with Alaska, as well as what compensation named executive officers will receive related to the merger.

Hawaiian shareholders are set to receive a premium of $18.00 in cash for each share, which is about three times more than the stock was trading for previously. The Hawaiian Airlines Board has approved the merger plans, but needs shareholder concurrence and approval.

Then there’s the securities lawsuit filed by one of Hawaiian’s shareholders, Deann Owen. The lawsuit seeks to invalidate the $1.9 billion deal. Among the suit’s claims is that the transaction will damage Hawaiian’s shareholders and benefit select company insiders only.

Hawaiian Airlines expressed openness to other merger offers.

They cited strategic considerations amid challenges in expansion, modernization, and the substantial $900 million debt. While emphasizing commitment to the Alaska proposal, the filing highlighted Hawaiian’s struggles to ensure resilience under these unknown circumstances.

Lastly uncertainties remain regarding the integration of unionized Hawaiian flight attendants, pilots, and maintenance personnel with Alaska’s team. Hawaiian and Alaska have said some answers are yet to be determined.

In summary, the impending purchase of Hawaiian by Alaska involves a very complex and multi-faceted strategic landscape. As all of us watch these two airlines navigate this hopeful change, we invite readers to share their thoughts on the future of Hawaiian Airlines with and without Alaska Airlines’ ownership.

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15 thoughts on “Alaska Seeks To Reduce Uncertainties About Hawaiian Air Purchase”

  1. Hawaiian was doing fine until this new CEO took over. I think that they got too big for their own good. Adding too many routes that were really unnecessary. And the management of every day operations is lacking in efficiency With so many employees baggage claim is a big joke, flight attendants who rarely smile so much for Aloha. Maybe they should look at overhauling management from the top down so they don’t have to merge with Alaska Air. And do away with some unnecessary routes just saying

  2. I remember when people were so excited when Southwest came to Hawaii because they would keep fares down and give them some real interisland choice.

    Be careful what you wish for.

    1. Yeah! Absolutely right! If Hawaiian remained the monopoly, they’d be charging $250 one way to the outer islands. Hawaiian is losing over $1 million per day…let that sink in!

  3. Alaska Airlines actually could impart some Aloha to Hawaiian Airlines. The Telephone communication with Alaska Airlines, except in emergency situations, is 100% better than dealing with a call center offshore where the responders are reading from a script and have no power to help you.

  4. Alaska ceo should forget Hawaii cultural talk he should first fix bigger problems like when a flight crew reports a pressure problem (missing door bolts ) just removing from just Hawaii service is not the answer. You see what happens with cultural issues the fire department s don’t have enough water to fight serious fires

  5. Aloha BOH,

    Fair point for Hawaiian Airlines employee’s and passengers to be concerned. Alaska Airlines absorbed and absolutely ruined Virgin America. (ask anyone that flew VA, then had to get subpar seats in Alaska planes).

    If they come in with those same “wise” ideas, then I think Hawaiian Airlines cabin experience will suffer immensely.

  6. If the merger maintain’s Hawaiian’s powerful brand and integrates the employees well there is no reason why a Seattle based airline can’t be Hawaii’s local airline much the same as a Seattle based airline is Alaska’s hometown airline. Hawaiian’s deep Hawaii roots and experience blend beautifully with Alaska’s state of the art technology and operational expertise. This has the potential to be a huge gain for Hawaii and create a lot more opportunities for the employees of both carriers.

  7. Very unlikely Hawaiian airlines can make it much further than it has now as it has massive debt massive competition from Airlines far stronger than it is I’ve seen this movie before doesn’t matter what dreams the local people may have The reality is Hawaiian Airlines has to operate in the real world at any time one of the bigger airlines could intensely challenge it and they would be out of business in 3 months they just owe too much and they don’t make any money they’re not profitable so this is really the only way they can turn

    1. You may be correct. But more than 100 year old Hawaiian Air is simply too strategic for us to loose. The State of Hawaii should step in here. After all, many a carrier was saved by timely government intervention. Japan Airlines, Lufthansa, etc. etc.

      1. NO WAY! Hawaiian Airlines is a private company and my state tax paying dollars should not be used to help Hawaiian Airlines Again . They got a $50 million buyout from the state in their previous bankruptcy. They’ve been losing money for the past 2 plus years, and yet they have not trimmed the fat…business as usual!

        1. I am also concerned that the company may have become bloated under Mark Dunkerly’s leadership. Rapid expansion comes with the price of higher vulnerability when a downturn appears. But I much rather support HA, one of the biggest employers of our local neighbors, than any other business in our state. More importantly, Japanese travelers will come back sooner or later… as soon as the Bank of Japan stops its interest policy. (They are, as always, behind.) So your dollars may not be not a bad investment. Better than supporting our inept government employees and old boys club.

  8. An approval of the buy out would be an “easy out” for the current management, for sure. But Alaska Air is not an ATM machine.

    I really worry about the long term prospects for the State of Hawaii. It takes tremendous brains, competitive drive, and skill to operate an airline. Both technology- and business skill. Relocating that kind of skillbase, which still exists here in HNL now, to the mainland would be a major symbolic step in the already ongoing rapid dismantling of our local skillbase and the outflow of local brain power to the West Coast. It brings us one more step closer to banana republic, just a place to sit in the sun, not a future for our kids to make a career.

    Less choice is never a good thing for the consumer either.

  9. HA will not survive without better leadership.
    In state (or US) customer service is non-existent. No one on the customer service side knows anything.
    Had a nice phone conversation with an Alaska Airlines representative. I told her all of the problems with HA customer service. She was very glad to get the input and was going to talk to her workgroup about my concerns.
    At the end of the day us (the customers) have to be HA’s priority. Somewhere down the line they forgot who pays all of their bills.
    HA leadership sunk this airline. They need to go.
    Thank you gentlemen for the article.

    1. Hawaiian customer service !its a call center in Philippines
      Hawaiian stopped flying To Manila but outsourced customer service to Philippines I guess trying to keep the Hawaiian culture!!

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