Who Will Benefit From An Alaska/Hawaiian Airlines Merger?

Alaska Airlines’ acquisition of Hawaiian Airlines is progressing, albeit slowly. We were just advised that it is largely on schedule, which could mean it is still up to a year or more away. Meanwhile, others in high positions have mentioned it could conclude much sooner than that.

Most recently, the shareholders of Hawaii Airlines gave their approval. This is despite an ongoing shareholder lawsuit we were told would likely have no impact. In addition, earlier this month, the U.S. Justice Department’s Antitrust Division requested additional information and documentary material as part of its review process.

Hawaii’s four county mayors recently spoke out about the merger.

The mayors have concluded that the merger would enhance airline service for Hawaii’s communities, improve connectivity, and offer more options for residents. We’ll add that it will provide many of the same benefits for Hawaii visitors.

The mayors confirmed what we already know: for neighbor island residents, like BOH editors here on Kauai, air travel is much like a bus service. It is vital for accessing essential services like business meetings, medical appointments, seeing family and friends, and even dining out.

Not only that, but these airlines, on a daily basis, move workers between islands and small towns, including those in construction, medicine, and other fields. That is essential to keeping all business moving forward in Hawaii and in Alaska, including the travel business.

Both Alaska and Hawaii residents share significant similarities. Alaska has provided local and reliable service in that state for close to 100 years, and Hawaiian has done the same here in Hawaii.

What Hawaii’s mayors didn’t say seems clear.

They believe that allowing Hawaiian Airlines to merge with Alaska Airlines is the best path to ensure the continued health and longevity of our state’s largest airline, enabling it to serve local residents for generations to come.

The implication is there is no assurance that Hawaiian Airlines can continue in business without the pending merger. You’ll recall that Hawaiian Airlines has amassed about $1 billion in debt, which at last count, is increasing to the tune of $1 million per day.

Benefits for Alaska Airlines.

Alaska Airlines is #5 on the list of largest airlines in the US. That position isn’t expected to change. Hawaiian’s long-haul aircraft, flights, and experience, including widebody aircraft of two types (A330 and B787), should provide Alaska with a new means for long-distance expansion. That could provide more competition on routes across the Pacific and even help reduce costs.

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Benefits for Hawaiian Airlines.

The merger reveals improved operational efficiency and expansion opportunities at the Hawaii bellwether. With a much larger fleet, new technologies, and other resources across the board, Hawaiian will have needed economies of scale that should improve performance while driving down operating costs. It offers them the potential for many new routes.

In addition, Hawaiian has nearly 7,000 employees, most of which are based in Hawaii. The merger would result in most people, especially union ones, retaining their jobs.

But flight attendants aren’t so sure yet.

Alaska and Hawaiian Airlines flight attendants are saying that they aren’t ready to give their blessing to the planned merger of the two airlines.

The flight attendants’ unions representing Alaska Airlines and Hawaiian Airlines have now halted that merger approval. Their unions want the commitment of both airlines to handle merger concerns to their liking and preserve what they deem essential elements of their respective contracts.

Public opinion on the proposed Hawaiian/Alaska merger.

We’ve already had a range of comments on this topic. Just today, Chris said, “Listen… Alaska wants to eliminate Hawaiian. As in the past they may tacitly promise things then when they can, dump all those promises. Alaska wants Hawaiian to cease to exist along with contracts, aircraft leases, employee bases, international routes, everything. It’s all going to end.

Yet, another comment responded, saying: “The Association of Flight Attendants, the union that represents both Alaska and Hawaiian flight attendants, is powerless to stop this merger. Hawaiian shareholders voted 98% in favor of the merger last week. DOJ Anti-Trust Division is not going to have cause to stop this from happening as it did with the failed Jet Blue and Spirit. Hawaiian is in a terrible financial situation and the future looks even more bleak without this acquisition. Sorry…it’s the hard truth. Get on board with Alaska or go the way of Aloha Airlines.”

Please share your thoughts!

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13 thoughts on “Who Will Benefit From An Alaska/Hawaiian Airlines Merger?”

  1. As a frequent Alaska Airlines mileage to the west coast and recent Hawaiian Airlines mileage newbie I’m excited for both. Alaska should keep Hawaiian as the flagship airline for island otherwise locals will be pissed. I was upset about how Alaska ended Virgin America. Hopefully, Hawaiian will keep its partnership with other current airlines as a Korean Air frequent flyer from Dulles.

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