It’s abundantly clear that the US government doesn’t favor airline mergers in any way. That has become apparent from the current merger it opposes and will again come into focus as Alaska Airlines attempts to complete its acquisition of Hawaiian Airlines over the next year.
“Airline industry competitiveness is in free fall, and consumers are feeling the consequences. Today, the four largest airlines—American, Southwest, Delta, and United—control 80% of the domestic market, more than at any point in the modern history of commercial aviation.”
“The proposed JetBlue-Spirit merger is just the latest threat to consumers in this long string of mergers.”
United States Senator, Elizabeth Warren
The government remains adamant about preventing such moves that it considers anti-consumer to proceed, which is exemplified in the current attempt of JetBlue to merge with Spirit Airlines.
While earlier small airline mergers, like the Alaska/Hawaiian one, may not have garnered trouble from the US regulatory agencies, rapidly escalating negative sentiment towards airline mergers will be tested to the (737) MAX (excuse the pun) with Hawaiian/Alaska.
The two Hawaii-centric airlines believe and have stated unequivocally that their deal isn’t anti-consumer and that the two have only a very small number of overlapping routes. That may not matter to the case that regulators will present.
The sentiment of the US government is that airline mergers aren’t in the public’s interest, and it is the job of the Department of Justice to intervene. The US DOT thinks it too may have a say in whether or not this goes through. This change followed airline mergers that allowed American to acquire US Airways in 2013, United to acquire Continental in 2010, and Delta to acquire Northwest in 2008.
Ruling awaited in merger that would precede Hawaiian/Alaska.
A ruling is currently pending in the JetBlue/Spirit Airlines tie-up. If that is allowed to go through, as many analysts are predicting, it appears that the Alaska and Hawaiian marriage will be a shoo-in. If not, however, the deal could encounter insurmountable headwinds.
Hawaiian Airlines without the Alaska acquisition.
It isn’t clear whether Hawaiian Airlines can stand alone any longer. The small Hawaii bellwether continues to suffer from the Hawaii travel decline that followed Covid, and especially the prolonged failure of international travel to return to normal.
See: Could Hawaiian Airlines Survive Without Alaska Deal? A World Of Emotion And Change.
Then, in 2023, the airline faced the brunt of the impact following the Lahaina fire. Add to that the endless Airbus A321neo engine problems and repairs that are still not over, and ongoing technology/infrastructure issues. It’s been suggested that in addition to extreme debt, the airline may lose an additional $300 million in 2024.
Are you in favor of the Hawaiian merger with Alaska? How do you think this will turn out?
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Limit top 4 air lines to number of gates, increase gates for several smaller air lines. No foreign ownership or risk loss of control of air line due to abroad regulations by owners and foreign regulations.
When I look at the two mergers that had been proposed, Spirit/Frontier and now Spirit/JetBlue, there are many overlapping routes and quite a case can be made for the fact it cuts competition. However, if we look at Alaska/Hawaiian only 8 routes would be in competition.
I have to wonder if some insiders with the Big Four, American, Delta, Southwest and United, are working behind the scenes to stop this merger.
I for one, do not want to see Hawaiian disappear. I still believe that overall, they provide the best service and the spirit of Aloha!
The Hawaiian/Alaska merger is great for both parties, particularly Hawaiian Airlines. Alaska fights vigorously versus Delta in Seattle and United in sfo and LAX. Thus theirs is not a sure thing either. A merger would help both parties.
Over the span of 30 years in the airlines I’ve been through 3 mergers and two bankruptcies. I’ve yet to see one create “more” airline jobs or increase market competition — or lower fares, for that matter. Those who say it “will” or “might” are thinking logically – you have to think in airline “think” – not logic. (smiles)
The Air Line Pilots Association represents pilots at both airlines, and the Association of Flight Attendants-CWA represents Hawaiian and Alaska F/As.
If this merger is approved by the gov’t, and that’s still a BIG “if”, it’s all going to come down to the unions and how “painless” they make any seniority integration …
Agree with you Dickie about past mergers…. However the reason for my optimism on this one?…. For the same reason HA is the only airline that never merged or disappeared since Deregulation. HA’s greatest asset is it image and experience in Hawaii, unlike other airline mergers it was just about hard assets. For AS to get their money’s worth on this deal they need to use the HA brand to it’s fullest. 1.9 Billion for some gates and airplanes is a lot of money….. 1.9 Billion for a solid footprint in the Pacific while retaining a brand that is a very powerful marketing advantage with employees that authentically represent what is special about Hawaii is a bargain.
Speaking of past mergers and train wrecks…funny trivia. How ironic the Allegheny/Mohawk merger of 1972 was considered by ALPA as the gold standard how a merger should go down…..Flash forward to the same airline in 2005 and arguably the most acrimonious and destructive merger of all, USAir/AmWest cost all their employees dearly.
From what I hear from employees on both sides of this one is some fear and skepticism by a few but far more pragmatic optimism to do the right thing. Both sides bring a lot to the table and it seems both sides recognize that fact. Crazy times for sure and anything can happen, but the opportunity for a huge gain for both is there.
Instead of hearing what Massachusetts Senator Elizabeth Warren has to say about anything whatsoever (her letter dated 9-15-2023, was six weeks prior to Alaska Airlines announcement of acquiring Hawaiian Airlines & she mentioned nothing of either Airline)… it might be nice to hear what Hawaii’s US Senators & Representatives have to say about it.
Good point, from what I hear they don’t seem to oppose it. Seems stupid if they did….this merger creates a stronger Hawaiian Air brand that isn’t at the mercy of a potential Chapter 11 filing and the resulting reductions that would follow. Especially if one more surprise (like Covid, the Maui fire, ry 8L, partial Neo grounding, etc) happened. Covid killed service to MKK and LNY, now this merger may bring it back. None of HA’s woes were their fault but at it’s current size they can only take so many body slams before something gives
When a business merges together, this generates better competition and the economy, it is always rare when a company agrees to merge and it will help consumers enjoy the benefit of the merger.
If denied a merger it can hurt both companies and the consumers denied affordability and confidence in using their services.
Senator Liz Warren is now an authority on travel in these inflationary times that see consolidation the rule, not the exception. Hawaii’s Economy is predicated on Tourism, getting people there, to spend $, support the economy, the citizenry and drive State Tax Revenue. If Hawaiian Airlines goes away, Legacy Carriers raise prices, with reduced competition, Economics 101, wonder if she has Stock in any Airlines?
💯 A super match !! They’re both excellent airlines, and to have Alaska step up and help out Hawaiian is pretty awesome..
Hawaiian Air was planning to replace it’s aging fleet of 717s this year. Average age is 22 years old with the oldest at 25.
Alaska said they will continue to fly them for another 5+ years!
I’ll never set foot on one again.
It’s either a merger or BK court for HA. No other options no matter how much wishful thinking is involved – The HA union folks will probably be against it though at the rubber meets road level. Lot of concern over losing their jobs.
Best Regard
As this is being framed all union jobs are secure. If anything the merger brings more jobs to the table than either airline would have individually. The Hawaiian part of the airline would have greater resources to capitalize on it’s strengths and grow in markets it might have struggled with alone. Alaska’s greatly enhanced footprint in the Pacific Rim means growth for that part of the Airline too. As I said, as this is being presented…..I err on the optimistic side, I believe it will pan out as they say it will as there is nothing to gain by Alaska paying a premium for the HA brand and than destroying it rather than capitalizing on it. This has all the makings of being a win win deal for all.
Wonder how this would affect Hawaiian Airlines points? I’ve got over 200K miles. If the hotels would lower their prices people would come more. I would hate to see HA go under. Always loved flying with them.
This merger is very anti competive in that just look whenever theres a fair war youre lucky to see pdx getting a discount and almost never sea.
Having Christmas 22 ruined by the impossibilty to get as on the phone for four days from a customer service perview is a very mismanged airline. You cant say its bad wx when its mgt greed not to have a plan to deal with surge volume. Whats next thunder storms so plane crashed?
Why not chg the laws and let a quality airline like sn, qf, jp buy it? At least the customer service wouldnt go down to soviett levels and intl expansion gets done. Having flown. On aeroflot thats not fair 5hier fa s are way more aloha then as.
A minor point. US Airways bought American which at the time was in bankruptcy. The American name was chosen for name recognition only.
As long as they operate separately and keep the Hawaiian name, what difference does it make.. it’s best to keep the name and svc alive. British airways owns AerLingus and Iberia…they operate separately.. Lufthansa owns Swiss Intl. and Austrian airlines…also operate separate… hard to believe it’s an issue…
The list is huge but for starters, beside the net increase in service that will result, the passengers that loved Hawaiian enough to put up with their weaknesses will find that they can still fly on Hawaiian but have access to a U.S based call center and industry leading website. A Hawaiian Air with Alaska’s strengths integrated into the operation is a huge benefit to the traveling public. Huge….
I don’t think this merger can even remotely be called anti consumer.
The combination of these two airlines will benefit the travelling public by better service to Hawaii as well as more options for expansion will result. Hawaiian will no longer be a stand alone carrier at the mercy of any potential downturn that could result in drastic service reductions and they are even talking about serving MKK and LNY. This is a huge plus for Hawaii and I would hate to see politicians that know little of Hawaii’s air travel needs and history make blanket statements that don’t apply in this case. Nothing at all like Spirit and JetBlue.
John W,
You are so correct on everything that you said in your recent posts about the Hawaiian/Alaska merger . All things considered it will be a very good fit for both airlines in the long run as long as they plan and manage it well.
Hana Hou!
us airways was actually the acquiring entity in the American deal (American was under ch. 11 BK protection at the time). American, the much larger entity resisted thoroughly but eventually gave in because there was no other way to get a BK plan confirmed as necessary to exit BK court.
30 year retired airline guy here. Bless ’em, but HAL and ASA are minor players in the airline industry, taken as a whole.
IMO, Hawaiian is not going to make it on its own. They have been burning the “$$$ debt candle” at both ends for some time and are burned out financially. They would only comprise about 25% of the combined route structure if the merger goes through and w/out it, they probably won’t survive.
The US gov’t normally supports mergers, but Warren and this particular Administration hate mergers that are heavy with labor union jobs that will cut union representation that supports politicians with $$$. So an airline merger that historically would have been approved is now subject to heavy political “headwinds”.
Right on Dickie D!!!
Well said and so very correct. Warren and the Biden Administration are totally incompetent and inept when it comes to economic and business matters. The DOT is a clown car show.
Let’s hope this merger is approved despite these ridiculous political headwinds!
This is how deals like these are done it’s all about stakeholders. If Alaska has contributed to the correct politicians that have influence on department of transportations decision makers the deal will go through, but if a major carrier foresees that Hawaiian is in deep financial trouble on verge of BKing and they have the right politicians in their pocket to won’t happen. After Hawaiian BK’s the major carrier will buy Hawaiian’s good assets for pennies on the dollar. That’s how business is done.
We sure hope that the merger will be approved as apparently HA is dealing with a very challenging economic situation that could threaten their survival.
Alaska is probably the best match for HA as they hopefully will keep HA’s unique identity and “Aloha” service and spirit. We love the HA wide body nonstop from Austin and encourage central and south Texans to use it. These flights are very popular and every seat was filled on our last two trips to Kauai this fall.
Hana Hou!
my humble opinion is Hawaiian Air should remain as a stand-alone airline. They I have flown them many times and I love their flights.
Elizabeth Warren hates capitalism so where is the surprise that she is against the proposed Hawaiian/Alaska merger.
Well Warren has no sling in the game other than writing a 7 page letter. She only gets minimal funding from the transportation industry and serves on no committees that regulate transportation. Neither of these airlines even fly to MA. This merger only benefits these two airlines and others better look out. West coast passengers due to benefit the most, of which she has no voters.
Hawaiian flys non-stop to Boston from Honolulu. Just fyi.
They asked 6 major carriers to merge into 3 reducing completion. If Hawaiian can’t go it done and the merger isn’t allowed, then what? One of the 3 mega carriers will gobble Hawaiian up, leaving the kama’aina’s at the mercy of that carrier!
I’m booking my latest trip to Maui I 4/2024 . I usually. Use a free companion fare & economy plus seats with Alaska. However, AK was charging now +$177 each additional one way . I couldn’t find two non-stops with AK to SJC because they have reduced the number of flights. Hawaiian no problem with 2 nonstops, $66 premium seats, cheaper than AK by 30% with free companion fare
I agree with you.