Alaska Air Is Supposedly Buying Hawaiian Airlines For $1.9 Billion

Alaska Airlines has made a significant move in the aviation industry by announcing its acquisition of Hawaiian Airlines in a noteworthy $1.9 billion deal. The decision, revealed on Sunday, potentially sets the stage for a clash with the Biden administration, which has expressed concerns about the prospect of escalating airfares.

In an unusual strategy within an industry dominated by a few significant players, Alaska intends to preserve both the Alaska and Hawaiian brands following the acquisition. The agreement involves Alaska Airlines paying $18 in cash for each share of Hawaiian Airlines, which had experienced a stock decline, closing at $4.86 on Friday after losing over half its value throughout the year.

The move is strategically positioned to create a robust competitor against the nation’s aviation giants, including American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines. Alaska CEO Ben Minicucci emphasized the unique advantages of merging two carriers with limited overlapping routes.

He expressed, “We combine two companies with shared values that have competed and survived longer than most through many industry cycles, enhancing our differentiated business model and creating a stronger competitor to network carriers.”

The $1.9 billion deal assumes $900 million in Hawaiian debt. The combined airline, with its headquarters in Seattle and led by Alaska’s CEO Ben Minicucci, anticipates the acquisition will contribute to profits within two years of closing, which is expected between 12 and 18 months from now.

This strategic move aligns the combined entity with the Oneworld Alliance, joining forces with major international carriers like British Airways, American Airlines, and Cathay Pacific.

The acquisition aims to significantly bolster connectivity, providing access to 138 destinations for passengers taking journeys through the continental United States and across the Pacific, including seamless service to 29 international destinations in the Americas, Asia, Australia, and the South Pacific. The acquisition marks a pivotal moment in the aviation landscape, promising enhanced competition and connectivity for travelers in the years to come.

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