A Hawaiian Airlines Airbus A330. The airline has been flying to NZ for a decade.
A Hawaiian Airlines Airbus A330. The airline has been flying to NZ for a decade.
Alaska Airlines will buy Hawaiian Airlines in a US$1.9 billion ($3b) deal.
The combined company would keep both airlines’ brands, rooted in the nation’s 49th and 50th states.
Alaska will pay US$18 in cash for each share of Hawaiian, whose stock closed Friday at US$4.86 after losing just over half its value in the year so far.
Hawaiian Airlines has a summer service that runs three times a week between Auckland and Honolulu, and the takeover means a bigger range of connections on Alaska Air, which has a big network within the US.
The deal also includes US$900 million in Hawaiian debt, which the airlines said brings the acquisition’s total value to US$1.9b.
The combined airline would be based in Seattle, with Alaska Airlines CEO Ben Minicucci at its head. It will participate in the Oneworld Alliance, which includes American Airlines, British Airways and Cathay Pacific.
It would also combine two networks to offer more connectivity to 138 destinations for passengers travelling through the continental United States and across the Pacific, including non-stop service to 29 international destinations in the Americas, Asia, Australia and the South Pacific.
A montage of Alaska Air and Hawaiian Airlines aircraft. The Alaskan airline has bought Hawaiian.
The companies said they would also keep Honolulu as a key hub and that they’re “committed to maintaining and growing union-represented workforce” in Hawaii.
They also said the combination would triple the destinations that can be reached within one stop in North America for travellers via Hawaii.
The deal has been approved by the boards of both companies, but it still needs to get the okay from the shareholders of Hawaiian Holdings.
Hawaiian Airlines president and CEO Peter Ingram said of Alaska Airlines, “We are joining an airline that has long served Hawaii, and has a complementary network and a shared culture of service.”
With the additional scale and resources that this transaction with Alaska Airlines brings, his airline will be able to accelerate investments in guest experience and technology, while maintaining the Hawaiian Airlines brand.
The transaction will also need the blessing of US regulators, which have shown resistance to more consolidation within the airline industry out of fear it could lead to higher fares.
The Biden administration is already trying to block JetBlue’s proposed US$3.8b acquisition of Sprit Airlines, which would subsume the nation’s biggest budget carrier.
The US Justice Department has already won a lawsuit that killed a partnership between JetBlue and American Airlines. The average domestic airline fare out of Seattle during the spring was US$409.93.
That was up from US$293.08 two years earlier, according to data from the US Department of Transportation. The average domestic airline fare out of Honolulu during the spring was US$367.94. That was up from US$329.93 two years earlier, according to data from the US Department of Transportation. The Alaskan and Hawaiian companies expect the deal to close in 12 to 18 months.
