No more Hurdles! After DoJ, U.S. Department of Transportation (DOT) Cleared Hawaiian and Alaska Air Merger Review.

• In December 2023, Alaska Airlines Group and Hawaiian Holdings had announced a definitive agreement aiming the merger.
• Alaska and Hawaiian filed a transfer application asking the DOT for approval to combine and operate international routes under one certificate On July 15, 2024.
• The airlines also filed an exemption application asking U.S. Department of Transportation (DOT) to permit them to operate under common ownership prior to the requested transfer.
• Honolulu to become a key hub for the combined airline with expanded service for residents of Hawai‘i to the Continental U.S. and creating new connections to Asia and throughout the Pacific for travelers across the U.S.
• The DOT's approval now requires the airlines to preserve the value of rewards miles, key Hawaiian routes, competitive access at the Honolulu airport, community service, fee-free family seating, etc.

In further making way for the merger to happen, the U.S. Department of Transportation (DOT) completed the review process issued an order under its authority to grant an exemption relating to the transfer of international route authorities in the combination of Alaska Airlines and Hawaiian Airlines, just after the D.O.J no objection last month. The two carriers now expect to close their merger transaction in the coming days.

Transportation Department officials said Tuesday that no obstacles remain to the airlines closing the deal and beginning to merge, although some final approvals were still pending.

In December 2023, Alaska Airlines Group and Hawaiian Holdings had announced that they have entered into a definitive agreement under which Alaska Airlines will acquire Hawaiian Airlines for $18.00 per share in cash, for a transaction value of approximately $1.9 billion, inclusive of $0.9 billion of Hawaiian Airlines net debt.

However, it was not easy to clear these hurdles ! The green signal for the merger of the these two airlines can be seen as a contradiction to the administration's rigid opposition to previous airline deals in the United States.

Earlier, the Justice Department successfully blocked JetBlue's attempt of buying Spirit Airlines for $3.8 billion, and it also took all legal measures to stop a partnership between JetBlue and American Airlines.

The DOT approved the exemption, which will allow the airlines to close the deal. However, the airlines must continue to operate separately until DOT has ruled on the transfer application. If approved, the conditions will remain in effect for six years.

Enforcing the terms in advance, the DOT clears its intention of taking a proactive approach to the merger review process that prioritizes protecting the public interest from end result.

As a precondition to the DOT’s clearance, the two airlines and the DOT agreed to certain commitments. These commitments are in alignment with the plans Alaska announced at the time it signed the transaction and are consistent with its longstanding commitment to exceptional customer service, serving air service dependent communities, and other add-ons.

Alaska Air Group's interim leadership team is in Honolulu to oversee Hawaiian Airlines’ operations until the two airlines are fully integrated, while keeping both brands, Hawaiian Airlines and Alaska Airlines.

Both the carriers have agreed to the DOT’s terms, according to Alaska. Alaska Airlines' statement clarifies that the terms align with Alaska’s previously announced plans. Also, these commitments do not impact the synergies of the deal, which will enhance competition and expand choice for consumers.

Ben Minicucci, CEO of Alaska Air Group, said:

“We look forward to formally welcoming Hawaiian Airlines’ guests and employees into Alaska Air Group."

"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.”

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