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.
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!