As the merger between Hawaiian Airlines and Alaska Airlines approaches, travelers and the Hawaii travel industry are bracing for what has the potential to be a significant clash of cultures.
This merger draws attention because of its strategic implications for the U.S. aviation market and the cultural integration challenges it may pose—lessons that can be drawn from Alaska’s previous acquisition of Virgin America as well as other high-profile airline mergers.
“It’s going to be difficult to merge two completely different corporate cultures. The ride is going get bumpy over the next couple of years. How Alaska is going to handle it while facing a probable economic slowdown in the near future is going to be “interesting.” Popcorn anyone?”
Regular reader and commenter Jay H.
The Alaska-Virgin America merger: lessons in cultural integration.
When Alaska Airlines acquired Virgin America in 2016, it began a challenging integration process. With its chic, tech-forward approach and trendy consumer-centric branding, Virgin America attracted a younger demographic that valued its unique in-flight experience.
In contrast, Alaska Airlines built its solid reputation on traditional values like reliability, efficiency, technology, and customer service.
Despite initial efforts to retain Virgin America’s brand identity, including considerations of running the two airlines as separate brands, Alaska soon decided to fully integrate and retire first, the Virgin America brand, and later, its fleet of aircraft.
Many of Virgin’s loyal customers were disappointed by this decision, feeling that the airline’s distinctive character had been lost in the process. The merger highlighted the difficulties of blending two different corporate cultures, particularly when one is deeply associated with innovation and modernity and the other is arguably more focused on tradition and culture.
While ultimately successful in business terms, Alaska’s approach to integrating Virgin America serves as a cautionary tale for its upcoming merger with Hawaiian Airlines. The key takeaway is that cultural differences, if not carefully managed, can lead to dissatisfaction among both customers and employees, potentially undermining some key benefits of the merger.
Alaska has very different plans for this acquisition.
Alaska has indicated that Hawaiian would remain indefinitely as a separate brand, post-merger. Alaska indicated when they acquired Virgin America that they “would consider” keeping that brand. In the end, that turned out not to be the case. At that time the company said, “We are looking at that because we do believe in the power of the Virgin America brand, and we don’t want to lose all that loyalty and revenue that exists today… [we are] taking a good look at running two brands for some period of time, perhaps forever.”
Beat of Hawaii
To that point, Alaska told Beat of Hawaii,
“We never committed to keeping the VX brand – only to considering it. It’s a very different set of facts in this case with HA.”
Hawaiian Airlines: a deeply rooted, unique local culture.
Hawaiian Airlines represents a unique challenge for Alaska. The airline is deeply embedded in Hawaii’s local culture, emphasizing community, tradition, and the Aloha spirit. Hawaiian Airlines has long been a symbol of the islands, offering a travel experience that reflects the values and hospitality of Hawaii. However, this strong cultural identity also comes with challenges, particularly in areas where the airline has been slow to modernize its operations, technology, and some would add people.
Alaska Airlines, known for its efficiency and modern approach, now faces the task of integrating Hawaiian Airlines into its system without alienating the very aspects that make Hawaiian unique.
Given Hawaiian Airlines’ strong local roots and Alaska’s more expansive, continental focus, the cultural differences between the two airlines could be even more pronounced than those seen in the Virgin America merger.
Comparisons to Air France-KLM and other mergers.
The cultural challenges expected in the Hawaiian-Alaska merger are reminiscent of those experienced by Air France-KLM, where national differences between French and Dutch employees have created ongoing tension since their 2004 merger. A recent study highlighted that these cultural differences have made cooperation difficult, with French employees often viewing their Dutch counterparts as overly focused on profits. At the same time, the Dutch see the French as overly hierarchical.
Similarly, the challenges faced by other airline mergers, including United and Continental, Lufthansa, Swiss and others, demonstrate that cultural clashes can significantly impact the success of a merger if not carefully managed. These examples emphasize the importance of cultural due diligence and the need for a thoughtful approach to integration, which goes beyond mere aligning of operations and finances.
Hawaiian’s employees have never answered to anyone outside of Hawaii. Being part of a company headquartered primarily 2,500 miles away in the Pacific Northwest will be a huge shift. That, before much-needed changes at Hawaiian even begin.
The road ahead: balancing long-standing tradition with modernity.
As Alaska Airlines moves forward with its acquisition of Hawaiian Airlines, the airline must carefully navigate the integration of Hawaiian’s 95-year old cultural identity with Alaska’s more modern, efficiency-driven approach. The success of this merger will likely hinge on Alaska’s ability to respect and preserve the unique elements of Hawaiian Airlines that resonate with its employees and customers, while also bringing the airline up to speed with modern technological and operational standards.
In conclusion, while this merger’s financial and strategic benefits are easier to understand, another true test will be in how well Alaska Airlines can manage the cultural integration. Lessons from past mergers, such as Alaska-Virgin America and Air France-KLM, may provide valuable insights into the challenges ahead.
The industry will be watching closely to see whether Alaska can create a unified airline that honors the legacies of both brands or if cultural differences will once again prove to be a stumbling block.
As Alaska considers how to navigate the waters of the “merger,” they really do need to be careful not to alienate the Hawaiian population. Since we have been traveling often since 2018 to visit family we have met many of the their friends and neighbors as well as friends of friends. I would be willing to say that close to 20% of the Maui population has either worked or is close with someone who has worked for Hawaiian over the past 50 years!
Although there are cultural differences between the two companies, the values each company holds to it’s region are similar. The contrast isn’t as great as comparing cultures/values of Hawaiian Air vs. almost all other US airlines.