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?
Elizabeth-Warren-Comments-on-Meger
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