United Airlines has raised concerns with the Department of Transportation (DOT) over Alaska Airlines’ proposed $1.9 billion acquisition of Hawaiian Airlines, citing the impact the merger might have on its existing agreements with the Honolulu-based carrier.
News that United Airlines has become anxious about the deal between Alaska and Hawaiian emerged on Thursday after an attorney advisor at the DOT’s Office of International and Aviation Economic Law filed a memo in the federal register about a recent meeting with United’s legal department.
On August 27, United’s Senior Vice President and Chief Legal Officer, Robert Rivkin, met with the DOT’s Deputy General Counsel, Brian Stansbury, to go over the Chicago-based carrier’s concerns.
During the meeting, Rivkin reported concerns about how the merger might impact various cooperation agreements that United has with Hawaiian Airlines, including interline and codeshare agreements, as well as prorate and loyalty agreements.
Last week, Alaska Airlines cleared a major hurdle in its proposed acquisition of Hawaiian after the Department of Justice (DOJ) allowed a legal review period in which it could have challenged the merger under antitrust laws to expire.
The DOJ has previously used the same antitrust law – known as the Hart–Scott–Rodino or HSR Act – to successfully challenge JetBlue’s proposed takeover of Spirit Airlines.
Alaska Airlines initially hailed the DOJ’s decision not to challenge the acquisition as a big win and dismissed the remaining hurdles as mere formalities, although the carrier has slightly retracted its position.
For the merger to go ahead, the DOT must give its blessing by approving an interim exemption application. That approval is still subject to a review process and the DOT may demand major concessions from Alaska Airlines.
It remains unclear how long the DOT review might take to be concluded.
Under its merger plans, Alaska plans to create a single umbrella company with two separate airline brands. The company will operate 365 aircraft, serve 138 destinations, and employ 31,200 workers. To clear the DOJ review, the airline said it made commitments to maintaining Hawaiian’s brand, keeping local jobs, and maintaining interisland connections.
