Hawaiian Airlines is caught in a dramatic saga as Hawaii travelers, the state, and the travel industry anxiously await the upcoming Department of Justice (DOJ) decision regarding its potential merger with Alaska Airlines, expected to be announced next week. In the meantime, with the airline’s future hanging in the balance, its stock price has experienced significant volatility over the past weeks. After a steep decline of nearly 20%, the stock has rebounded with an equally dramatic surge, rising over 20% in just the past five days, reflecting the market’s fast-shifting senti
The DOJ decision: what’s at stake?
The DOJ’s impending decision on the Hawaiian/Alaska merger has kept everyone on edge. Whether approved or not, this is about to reshape the landscape of air travel to and from Hawaii. Proponents argue that the merger could lead to enhanced route networks, more competitive pricing, and improved service offerings, particularly for those traveling between the U.S. mainland and the islands.
However, there are significant concerns as well. Critics have raised alarms about potential monopolistic behavior in the airline industry, with the prospect of this deal reducing competition on some routes and negatively impacting consumers. As Southwest Airlines also continues to grapple with its own challenges, as detailed in our previous coverage, the DOJ’s decision could either help stabilize or further destabilize the airline market dynamics here in Hawaii.
What this means for travelers and investors.
For travelers, the outcome of this deal will have direct and profound implications on future Hawaii travel plans. On the one hand, a successful merger could bring interesting new route options and potentially lower prices in some markets as the combined duo optimizes operations. On the flip side, however, a rejection could lead to uncertainty, with possible impacts on flight availability and pricing as the airlines flying to Hawaii adjust to the DOJ’s decision.
For investors, the next few days will be crucial. The sharp rise in Hawaiian Airlines’ stock suggests that many are now betting on a positive outcome from the DOJ. However, the risks remain high, and any unfavorable news could send the stock plummeting once again, with continued volatility all but guaranteed as the DOJ’s decision approaches.
It is also interesting to note that Hawaiian just exchanged more than one billion dollars of debt, with prior 5.75% senior secured notes due 2026, now due in 2029 at 11%. That as Hawaiian airlines ability to continue as a standalone airline, without the Alaska Airlines deal, remains in question.
The possibility that DOJ will require changes as a condition of the deal.
With a dozen overlapping routes, it isn’t clear whether or not the DOJ could require some changes to routes both airlines operate as one condition of a merger. That was the case in a series of prior mergers ultimately approved by the DOJ. The routes that overlap in this case are to Hawaii from the Pacific Northwest and California.
Fleet utilization in a combined airline.
There is room to wonder how, down the road, Alaska would use its suddenly larger and different fleet. That would include well over 200 Alaska Boeing 737 planes, plus Hawaiian’s mix of 44 mainland narrow-body and widebody planes. It is likely that, over time, significant changes in fleet utilization would occur, albeit perhaps slowly at the beginning.
Looking ahead: all eyes on this coming week.
As we approach the anticipated DOJ announcement, tension in Hawaii, with travelers, the stock market and the airline industry, is palpable. Hawaiian Airlines, the 95-year-old cornerstone of Hawaii’s air travel industry, is at a pivotal moment. The upcoming decision will not only determine the airline’s immediate future but will also have long-lasting effects on the broader travel landscape in Hawaii.
Next week promises to be both decisive and fascinating as the drum roll reaches its crescendo. Please let us know your thoughts, and stay tuned as we cover the outcome and its ramifications for Hawaii travelers.
Photo above from end of Hawaiian Boeing 767 era.
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I fly Alaska and Hawaiian. I don’t see Hawaiian being viable without a merger. Alaska is an excellent airline with better customer service, mileage rewards and digital experience. This is a win-win
Living in the pnw kinda forced to fly as. It’s a 3rd rate airline more concerned with ceo comp then passenger service. I had to literally fight my way out of nyc take subway nj transit from jfk to ewr, and wait nearly an entire day to get on the last plane out as one va and as flight left after another, as thier It systems couldn’t talk. Only to be dumped at pdx with a dozen other passengers and had to call the elite line and wait nearly a half an hour for someone to just show up and another 2 hrs to get hotel and big $25 food voucher with no booze stamp. Their IT is out sourced to the worst , which explains why I spent days waiting for a call back to cancel a flight that ua fixed in a cpl hrs. Mileage plan was like the only reason to fly as you get 2 fly a real airline like air tahiti. But now the further you fly the more miles you pay.
so let’s hope rumors of jal are true and ha can remain an indepent airline, else doj should reject deal as anticompetive.
I love flying Hawaiian Airlines. They treat passengers so good! Your vacation starts the moment you step onto Hawaiian Airlines jet.
It’s the best!
There is an option where AA and AS both take a share and HA joins one world. No controlling stake no monopoly no DOJ. HA have an agreement with JAL so they might also take a stake.
11% ??? The merger better go through and those bonds promptly retired. I believe the market has spoken here. 11% bonds implies the bondholders see junk status and no future for a stand alone Hawaiian Airlines…
Best Regards
This situation is but a large microcosm (oxymoron) of what is happening in Hawaii in general. There are only 12 publicly traded companies based Hawaii. With the merger that number goes to 11. Of the 7000 or so Hawaiian Airlines employees, I read around 2,000 of them will be made redundant in a combined Alaska/Hawaiian co. Most of those jobs are good paying (Marketing, IT etc…) that are not duplicated anywhere else in the state. Further those laid off will have the resources to leave the state entirely -exacerbating the 5 year out-migration trend from Hawaii. This is a serious economic problem for the SOH and contrary to the sentiments of the mis-informed folks, population decline for Hawaii is definitely not a good thing. -Particularly of skilled and well-paid workers.
Alaska has pledged to maintain the Hawaiian Airlines branding, but little else. There are rumors Hawaii’s Washington delegation have been lobbying DOJ to kill this deal on the above basis.
2000 jobs?? Not true Tim…….this merger will preserve jobs and create new jobs…..also believing rumors is a fools game.
Let us not forget Hawaiian is no stranger to Bankruptcy. My concern is Hawaiian businesses and employees are likely to be the most who suffer as a result if any future Chapter 11 proceedings.
No Boeing planes! I will only fly Airbus!
At first I was against this merger. Both are good airlines and I thought it was in our interest for them to compete.
But looking at Hawaiian airlines financial position I now favor the merger. If Hawaiian airlines goes under it will have severe repercussions on our state. Better to have the merger go through and keep the inter Island flights going b
This is bad for Hawaii.
Virgin America
Jet America
And consider what Alaska has done with Horizon. This company has forgotten its roots. The people of Hawaii deserve better!
I fly horizon all the time. They are a very good airline, for me at least.
That is simply not true.
You are correct Manic…Alaska stands as having the best track record of fairness in mergers and maximizing opportunities for everyone involved..there is always frustrated people in every merger, some of them are quite bitter and unhappy…. Research the real story how Alaska treated Jet America and you’ll see how silly Harry sounds……Alaska is the polar opposite of USAir or SWA in a merger…..bodes very well for this one.
What the heck is going on if they approve Alaska Airlines and Hawaiian airlines merger they should also approve Sprint airlines, and JetBlue merger who got paid and the DOJ’s Approve Alaska and Hawaii airlines it’s not difference this is a scam. The DOJ is They’re playing the people That’s what your The commentators should be writing about Also, sprint airlines should sue the DOJ if they do approve the merger with Alaska airlines and Hawaii There should be an investigation who’s getting paid commentary.
They’re extremely different scenarios. The Hawaiian/Alaska merger is good for everyone in Hawaii and it doesn’t hurt the other airlines. The latter being the most important difference between the two merger situations.
So, Justice asks for a 10 day delay?
For what? Justice is well aware of HA’s deteriorating financial condition.
Some have speculated that Justice wants AS to handover a big portion of their SEA gates in addition to remedies throughout the Hawaiian islands.
Time is running out for Hawaiian.
Both Jet Blue and Spirit have reduced flying, deferred aircraft orders and employee layoffs as their merger was denied.
If the merger is not approved at Hawaiian, this simply will mean a bankruptcy filing and a probable cessation of routes and services.
Hope for the merger & most of all…Alaska gets rid of Hawaiian’s customer service staff from overseas. They are the worst ever!
I support the merger because it could provide HA with improved call center and IT services, which Alaska already excels in and HA desperately needs. These enhancements could bring back long-time HA travelers that are frustrated and have already moved over to Alaska as their preferred choice for travel.
There are a few proponents of this deal who are very vocal here. The same names post here, clearly trying to influence public opinion.
This merger has short term benefits for Hawaii travelers, but longer terms is *not* a good idea for Hawaii travellers, future fares, our local community, local employment. Alaska is a good company, but it should remain as a competitor.
Simple fact is Alex, Hawaiian is now saddled with 1 billion in expensive debt through little fault of their own. SWA is still predatory, Japan travel is slow to recover (Hawaiians previously most lucrative market) and HA simple doesn’t have the size to absorb the hits they have taken. Combining with Alaska as the agreement is structured could be great for the community and for the employees…… The loss of jobs and hit to the local economy a Chapter 11 would produce would not be good for anyone. Not sure why you need to attack someone with a different perspective??
“Hawaiian is now saddled with 1 billion in expensive debt through little fault of their own.” Did you forget the poor management that botched the tech upgrade, invested in unreliable planes, and granted massives raises which are now bankrupting Hawaiian Air?
Those who disagree with you are not attacking you; they are commenting in the comment section, which I thought was the point.
This is a red herring.
Hawaiian’ current CEO, Peter Ingram, stated clearly and publicly after the merger announcement, that Hawaiian does not need this deal for survival.
What gives?
Agree
What happens if the merger is not approved and HA declares bankruptcy in the next 1-2 years?
They reorganize, discharge some debt and hopefully get back on track. If it comes down to it, chapter 11 bankruptcy doesn’t mean they shut down.
Aloha,
I’m actually impressed with the level of self interest on display here. A money losing vortex is being defended with “save the jobs”, “save my frequent flyer miles”, “but but it will be a monopoly”, all of which give no consideration to the business case at hand. That being said, I do not understand the alleged “business case” myself, but jobs, miles and market share do not factor in, given a billion dollars of debt, the price of which just doubled.
Mahalo
With the potential of Breeze/Frontier (Spirit/Allegiant?) sniffing around Hawaii routes, there’s plenty of competition. I see lower fares on United almost daily. Besides, bigger picture – which sorely Hawaii lacks foresight, this is actually a good thing for locals and employee’s.
There’s too much nose-to-spite-your-face in Hawaii as it is.
My only real concern is that Alaska absolutely *ruined* Virgin America and the better not screw up the “vibe” and experience on Hawaiian as it is today.
Should this merger not go through Hawaiian will still be at the mercy of SWA willing to operate at a substantial loss to stay in the market but for how long? If HA is ultimately driven into Chaper 11 it just means they will have a substantial competitive edge ( no longer have to service the 900 million debt load) and even lower costs once the reorganization is complete…..but the employees, stock holders and the consumer will be in for a very bumpy ride…a smaller reorganized airline that SWA will have an even tougher time competing with and it stands to reason they would leave Hawaii altogether. The numbers are out there, SWA has lost one billion dollars trying to compete with HA…can’t keep doing that I would think.
I believe some cynics are saying the 50% of the Hawaii /mainland travel is somehow a monopoly? …..all mergers create certain route combinations giving the merged airline a strong presence in certain routes, that’s the point of this merger to create a stronger airline. The HA/AS combo will actually only give them 9% of the US market, hardly a monopoly against the big 4. The merger will create stronger, better competition in the marketplace that will create greater consumer opportunities.
As a shareholder and a paying customer of HAL, I encourage the merger.
I lost frequent flyer miles when Aloha shut down. I don’t want to lose my HA miles now!
Petty, selfish moi? No!
Spend them, just in case. That’s what I did. Booked a trip to the Cook Islands in January using points
If the merger goes thru and I have to fly from Phoenix to Maui on a single aisle plane I will probably stop going and go somewhere closer like Mexico where I can fly and 2 or 2 1/2 hours on one as I am tall and they are uncomfortable. It would make sense for Alaskan to get rid of all the Hawaiian Airbus planes as they are an all Boeing fleet.
Doj should reject this deal as its purely anticompetive. Just look at AS domination at sea. So reducing more non as flights doesnt make any sense.
This deal is as trying to reduce competition on the west coast and esp pnw just like they did with virgin merger.
Hi Terrydabear~ AS is dominant @ SEA, however, they only control 37.52% of all flights with Delta @ 16.86%, which pales in comparison of both number of flights and percent of control at other major US hubs. Alaska and Hawaii have been treated seperatey in the past given their unqiue operating environments, so DOJ may be weighing that in their decision. If the merger does not go thru and Hawaiian fails, that will spike prices as the number of flights will be dramtically reduced and the other carriers would not be able to fill the void.
Understand your concerns but I believe there are more postiives to approving the merger, IMHO. Cheers
I don’t see fares spiking even if Hawaiian falls. Tourism numbers are continuing to fall in Hawaii, and all airlines are reducing frequencies. That’s where some of Hawaiian’s financial problems stem from
Aloha~ Fingers crossed on this one. Thinking that DOJ may ask to give up some route authority and/or any slots held. As there are no overlapping international routes, feel confident those will stay with the merged airline. This one makes sense when you step back to look at the combined networks vs the big four, but common sense sometimes does not make it past the talking stage. Also, if there any other airline objections, that can sway decisions.
One detail. The image above is a B767-300 not the Dreamliner. Must had to dig in the archives for that one! All in good fun. Cheers
Hi Mark.
LOL. Thanks. That was the goodbye photo when they ended their 767 era.
Aloha.
One thing that should be noted here is that the new Hawaiian notes can be redeemed within 180 days of the merger for only the original amount plus accrued interest. If the merger goes through, Alaska will likely retire this debt using their credit lines which have a much lower interest rate. That should improve result.
I’ve flown both Hawaiian and Alaska a lot, and I love them both for different reasons.
It’s hard to imagine them coming together as one entity honestly, but if it means more destinations, a stronger company and better service, okay.
What will this mean for local jobs in Hawaii and the culture of Hawaiian Airlines? Thinking that at the least this is going to result in a loss of aloha spirit that has set Hawaiian apart from the others. And at worst, fewer mgmt jobs here and maybe fewer overall jobs.
The HA employees will likely suffer more if the merger doesn’t go through, so will the consumer. Alaska has been very upfront and committed to keeping the Hawaiian Brand, employees and culture intact. It’s essentially what they are paying for and they seem smart enough to know that’s the most valuable asset they are buying, so why would they not utilize it?
The people that argue against that perception don’t understand Hawaii, it appears Alaska does.
Not a fan of airline mergers. These lead to less competition, and prices are already getting ridiculous. I’m worried this will end up hurting us consumers in the long run.
I for one am excited about the potential merger between Hawaiian and Alaska Airlines! This could mean more flight options and possibly better prices for those of us who travel frequently from Hawaii. Fingers crossed for a positive outcome!
While domestic investors make money from growth and stock price rises the professionals make money from volatility not growth so this is as good as any other reason to trigger it.