Will the Regulators Approve the 'US Alaska-Hawaiian Airlines Big Deal'?

$1.9 Billion Acquisition Deal Signed
Regulatory Approval Is Key

Alaska Airlines in the United States is acquiring its competitor Hawaiian Airlines for $1.9 billion (approximately 2.47 trillion KRW). Given that the Biden administration has been strongly pushing against antitrust practices in the airline industry, attention is focused on whether this merger will receive final approval from the authorities.

According to the Wall Street Journal (WSJ) on the 3rd (local time), Alaska Airlines announced that it has signed a contract to acquire Hawaiian Airlines for $1.9 billion, including $900 million in debt. The merger process is expected to be completed within a maximum of 18 months, and both companies' brands will be maintained after the merger.

[Image source=AP Yonhap News]

Ben Minicucci, CEO of Alaska Airlines, stated in a press release, "This deal will solidify our position as the fifth largest airline in the United States." He added, "Through this deal, Hawaiian Airlines will expand its mainland U.S. routes, and Alaska Airlines will be able to enter new Asian routes based in Honolulu."

Although the airline industry’s business conditions have greatly improved due to the surge in demand suppressed during the COVID-19 pandemic, Hawaiian Airlines has faced difficulties due to the Maui wildfires this summer, intensified competition on overlapping routes, and slow recovery of tourism demand on its key Asia-Hawaii routes. As a result, Hawaiian Airlines’ stock price has fallen by more than 50% this year, and it has recorded net losses for 14 consecutive quarters recently.

If this merger is finalized, Alaska Airlines will expand its fleet to 365 aircraft. The number of routes operated will total 138, including 29 major international routes across the Americas, Asia, and Australia-Pacific regions.

However, the key issue is whether the authorities will approve the merger. WSJ pointed out that "there are concerns about the weakening competitiveness of small and medium-sized airlines due to the negative effects of this merger," and noted the possibility that regulatory authorities might block the acquisition plan. Since its inception, the Biden administration has increased the intensity of antitrust regulations, having opposed the merger of JetBlue and Spirit Airlines and filed lawsuits against the partnership between JetBlue and American Airlines.

This content was produced with the assistance of AI translation services.