High-Stakes Chess: Alaska and Hawaiian Airlines’ Latest Maneuvers Examined

Alaska Airlines’ Ben Minicucci and Hawaiian Airlines’ Peter Ingram have been on tour in Hawaii to help bolster their proposed merger, which will soon be in the sights of the US Justice Department. Their most recent stop among many was a business meeting at the Hilton Hawaiian Village Waikiki Beach Resort hosted by the Chamber of Commerce Hawaii.

How much does getting local buy-in to their 1.9B plan of merger matter now, with the whole deal contingent on federal regulatory approval? We say it could be important to have the community’s backing.

Alaska thinks so, too. They recently established a Hawaii Community Advisory Board to honor Hawaii and Hawaiian Airlines.

Airlines proffer the advantages of a combined airline.

During their discussions, the well-known CEOs pointed to significant benefits that would be realized, including a major route expansion. We predict the fleet will be rebranded Alaska-Hawaiian, and Alaska will strategically deploy the widebody fleets, originally from Hawaiian, globally.

It would not surprise us to see Seattle to Sydney, for example. Currently, that route does not exist. What Hawaiian gives Alaska is the chance to be an international widebody carrier, especially across the Asia Pacific region. That would not be possible otherwise, given Alaska’s all Boeing 737 fleet.

Honolulu would become the second-largest hub in the Alaska network. We would expect to see the current Hawaiian Airlines lounges in Honolulu significantly upgraded. Alaska has further said it will continue serving POG and be competitive and robust with interisland service.

Hawaiian was enthusiastic about the strengthened loyalty program that would ensue, saying, “Now you can use those miles on a larger network. Now you’ve chosen what miles on oneworld, and really the strength of that combined loyalty program is going to be really powerful for our guests from here in Hawaii.”

Exactly how a combined loyalty program would work remains elusive and will be determined with other significant issues later in the process.

Could Hawaiian Airlines Survive Without Alaska Deal? A World Of Emotion And Change.

We can’t help but recall the expression on Peter Ingram’s face when they announced the merger, and it appeared to us to be anything but enthusiastic (image above). But that was two months ago, and now the situation is different. By the way, this is more like Peter normally looks.

Hawaiian Air CEO Peter Ingram

Alaska’s affable Minicucci emphasized something inaccessible to Hawaiian Airlines passengers. That was the recognition that the most elite passengers would receive access to all of Alaska’s lounges and those of oneworld Alliance.

Hawaiian/Alaska touting oneworld as a big uplift; on that point, we could concur.

Currently, Hawaiian Miles are relatively useless beyond the scope of Hawaiian’s limited flight network. That compared with Alaska’s miles, which BOH editors have used for travel on other global airlines nimbly.

As a global alliance comprising more than a dozen airlines, the CEOs believe the merger will enhance competitiveness against the Big Four airlines. However, they acknowledged that the merger is still in the planning stages, requiring careful consideration of factors such as combining reservation systems and staff.

Honolulu, HI, USA – July 22, 2019:Daniel K. Inouye International Airport building in Honolulu Hawaii.

How will Honolulu fights be impacted by the proposed merger?

Alaska said it plans to grow the combined airline’s presence in Honolulu and Hawaii. Minicucci said, “Our idea, just to be clear, is to grow this pie, not to keep it the same. We see a big presence here.

That posturing aims to assure Hawaii stakeholders that the 7,000 Hawaiian Air employees, primarily based in Hawaii, will still be needed. Ben continued, “Most of the operations personnel, of course, we’ll need. The question is what the back-office support will be. Obviously, there’s a duplication in both companies. We’re going to work through that whole process, and we’re going to be extremely communicative in terms of what our progress is.”

There is no further information since the merger was first announced. At that time, questions from those in the audience included how the two envision combining staff that have both union and non-union personnel.

Alaska Airlines Basic Economy Changes May Benefit Hawaii Travelers

Alaska points to its employee incentives.

Also this week, Alaska announced its annual incentive payout, which paid employees $200 million last year. Based on company performance, employees earn an added bonus. Alaska said that equated to “more than 6 percent of most employees’ annual pay last year.”

Hawaiian Airlines WiFi

Hawaiian points to its WiFi at long last getting installed.

Hawaiian has confirmed that it has obtained FAA approval to deploy its free Starlink WiFi on the company’s troubled Airbus A321neo, which is currently being installed on that fleet. It will be the first major airline to put this technology on board, and it is expected to be the fastest, most capable inflight connectivity available worldwide, offered free to every guest.

Next steps for Alaska and Hawaiian merger.

In addition to regulatory approval, the merger awaits concurrence from shareholders, including those at Hawaiian, who will vote in just two weeks. A Hawaiian Airlines’ shareholder lawsuit has also been filed to block the merger. The entire process may take up to 18 months.

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11 thoughts on “High-Stakes Chess: Alaska and Hawaiian Airlines’ Latest Maneuvers Examined”

  1. Im against the merger if you change the aircraft for interisland to the same as alaska i dont trust the aircraft after this latest incident.i wont fly on these aircraft if you use the same aircraft as mainland flights then i will fly

  2. I would like to know before the merger of Alaska Airlines and Hawaiian Airlines to be completed, when will Hawaiian Airlines join into the One-World Alliance?

  3. Wouldn’t it be great if each time one of the A321s goes in for its engine service and is out of service the Starlink WiFi could be installed? Does anyone know if the Starlink can be installed where they are doing the engine work?

  4. I remember when Aloha Airlines went belly up, Hawaiian benefited. Now that Hawaiian heavily in debt needs a partner/merger or get taken over by a major if they go into bankruptcy. Introducing a Hawaiian advisory (politics) and a lawsuit will only prolong a good merger. When a smaller airline is struggling there’s always a bigger airline there to swallow it. I’m from Kona but live in San Diego, l flew always on Hawaiian but until four years ago l started flying on Alaska with direct flights to Kona. I love their mileage program and have benefit waitlisted upgrades as an MVP flyer. Hawaiian’s branding is nice but not essential if it needs to survive. I have at least a 100k miles with both Hawaiian and Alaska so either way it works for me.

    1. This is a post about Hawaiian and Alaska being clear on their intentions.
      What does SWA have to do with it? Other than they obviously don’t like it because it would strengthen the competitive field with a stronger carrier that has intentions to maximize the Hawaiian brand and extensive experience in Hawaii.

  5. Your interesting story says …”What Hawaiian gives Alaska is the chance to be an international carrier, especially across the Asia Pacific region.”
    I would point out that Alaska is already an international carrier with flights to destinations in places like Canada, Mexico and Costa Rica.

    1. To your point Sean, The merger creates a lot of markets (Costa Rica, Mexico Canada as you said) that would be even better connected to Hawaii. The potential list for new non stop service…London is often talked about, could be interesting as well as new mainland destinations. Utilizing the Hawaiian brand for new destinations to Hawaii is a good marketing tool and creates instant name recognition. Combining the two airlines opens a lot of doors.

  6. Any merger of this magnitude is going to have multiple perspectives. Some not based on reality and some like comments on Hawaii News Now from SWA’s COO trying to paint it in a negative way for obvious reasons. All with an agenda….. However there is nothing to indicate that Alaska is not sincere in doing this right and in fact, the most likely scenario is a net gain for Hawaii as well as the employees of both. The airline industry is filled with merger train wrecks. This appears to be nothing of the sort.

    1. The merger appears to be “everything” of the sort. Alaska taking on a fleet of non compatible aging airbus wide bodies, a fleet of Neo 321’s with basically no engines, Boeing 787’s that nobody else will take and with come with Boeing’s now notorious lack of quality control especially in South Carolina’s non union factories, Hawaiian’s legendary ground passenger service and that is legendary in a bad way, local animosity towards Hawaiian for years of price gouging inter-island, Hawaiian’s reservation system in chaos, an operation that has been a money pit for years, and a $Billion in debt. In the end l think Alaska will come to its senses and give up on the merger.

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