The proposed $1.9 billion acquisition of Hawaiian Airlines by Alaska Airlines is expected to clear within days after the Department of Transportation (DOT) said on Tuesday that it had secured a number of concessions from the two carriers to ensure that the deal can go ahead.
Based on the agreed concessions, which include protecting the value of frequent flyer miles and maintaining critical inter-island and continental routes, the DOT has approved a transfer and exemption application that will allow Alaska and Hawaiian to operate under a single operator license.
The DOT’s blessing for the two airlines to merge is the last regulatory hurdle that Alaska Airlines had to clear after it first announced its intention to acquire Hawaiian Airlines back in December 2023.
Last month, Alaska Airlines learned that the Department of Justice (DOJ) would not try to block the deal under antitrust laws but the carrier still needed to win approval from the DOT.
In order to secure approval from the DOT, Alaska Airlines has agreed upon the following concessions:
- It will protect the value of frequent flyer rewards by maintaining the value of miles under both the Alaska and Hawaiian rewards programs, allowing transfers of points at a 1:1 ratio, matching frequent flyer status and agreeing not to expire miles earned under the current programs
- Critical inter-island and continental routes will be maintained as they are today, along with preserving essential air services in Hawaii and Alaska.
- The combined airline must not take action that would discriminate against new entrants at Hawaiian’s Honolulu hub.
- Hawaiian Airlines must match Alaska’s fee-free family seating policy for families traveling with children aged 13 and under.
- Hawaiian must also join Alaska in providing travel credits or frequent flyers miles when a flight is delayed or canceled due to a controllable reason.
In addition, the DOT has also secured an agreement from both airlines to lower costs for military service members and their families by waiving certain fees such as for carry-on bags and checked luggage bags.
“We look forward to formally welcoming Hawaiian Airlines’ guests and employees into Alaska Air Group,” commented Alaska Airlines CEO Ben Minicucci on Tuesday after the deal with the DOT was made public.
Minicucci added: “We sincerely appreciate the exceptional care and service that employees of both companies have continued to show for one another and our guests throughout this process, and the support of both airlines’ labor unions, as we proceed to realize the vision for this combination and build a stronger future together.”
Alaska Airlines said that it now expects to close the merger in the ‘coming days’.
Alaska plans to create a single umbrella company with two separate airline brands, which will operate 365 aircraft, serve 138 destinations and employ 31,200 workers. The airline had already committed to the DOJ to maintain Hawaiian’s brand, keep local jobs, and maintain interisland connections.
