Alaska and Hawaiian Airlines cleared to close deal by US DOT
September 18, 2024
The US Department of Transportation (DOT) has cleared the way for Alaska Airlines and Hawaiian Airlines to close their upcoming merger, subject to Alaska preserving certain criteria including the retention of key routes and support.
In December 2023, Alaska first announced its intention to acquire Hawaiian for $1.9 billion, with each airline to retain its separate brand yet operate as a combined entity. In June 2024, Alaska and Hawaiian officially filed to operate as a merged carrier, alongside an application exemption seeking to allow the deal to close “on the condition they remain separate and independently operated until DOT has ruled on their transfer application,” explained the DOT.
This exemption has now been granted, subject to certain conditions: meaning that “as the merger moves forward, Alaska and Hawaiian are required to protect the value of rewards, maintain existing service on key Hawaiian routes to the continental United States and inter-island, [and] preserve support for rural service,” clarified the DOT.
The integration of these “binding protections” – which the DOT says will maintain critical flight services for communities, ensure smaller airlines can access the Honolulu hub airport, and preserve the value of rewards miles – is the first time such clauses have been required prior to the closure of an airline merger. An example is the “first-ever rewards protections against devaluation,” meaning that Hawaiian points holders will retain the value of their rewards and status.
With the DOT adding that Hawaii’s rural island communities are “uniquely dependent on the passenger and cargo services provided by Hawaiian Airlines,” the new airline must “maintain robust levels of service” across critical routes, alongside ensuring “competitive access to Honolulu hub airport”.
The DOT agreement will last for six years, during which time both carriers will be working to synchronise their schedules and integrate their operations.
