Saturday, August 24, 2024 Alaska and Hawaiian Airlines face uncertainty as they await the DOJ’s decision on their proposed merger, raising questions about the future of the deal. The proposed merger between Alaska Airlines and Hawaiian Airlines remains somewhat unclear, with recent reports scrutinizing subtle shifts in the wording of Alaska Airlines’ official statement about the Department of Justice ( DOJ ) review period ending. Although both airlines await further developments, there is speculation that government authorities may continue to assess overlapping routes shared by Hawaiian and Alaska Airlines and the potential impact on these routes if the merger proceeds.
Earlier this week, Alaska Airlines announced that the investigation period mandated by the Hart-Scott-Rodino ( HSR ) Act had concluded, signaling they are now awaiting the next steps in the acquisition of Hawaiian Airlines. Despite this, there is widespread belief that the relevant authorities have not yet completed their evaluation of the merger, particularly concerning its effects on certain overlapping routes. According to a report by CTFN, highlighted by Seeking Alpha, the Departments of Justice and Transportation are expected to continue their review, focusing on specific overlapping routes that could experience a reduction from two carriers to just one.
Both Alaska Airlines and Hawaiian Airlines offer regular scheduled flights from the US mainland to various destinations in Hawaii. A number of these routes, especially those originating from major West Coast cities like Los Angeles, San Francisco, Seattle, Portland, and San Diego, overlap between the two airlines. If the merger goes ahead, these overlapping routes could see a reduction in the overall number of services offered.
Merging two airlines is a complex and time-consuming endeavor, and the Alaska-Hawaiian merger is proving to be no different. The process officially began last July when both airlines submitted their initial application to the Department of Transportation ( DOT ). Since then, various steps have been taken as the merger continues to progress.
In July 2024, reports emerged suggesting that the Department of Justice (DOJ) likely opposed the merger, leading to a sharp decline in Hawaiian Airlines’ stock prices. Additionally, some passengers filed a lawsuit claiming the merger would lead to reduced service on certain routes and higher airfares. However, a judge recently dismissed this lawsuit.
Following two extensions, a significant hurdle appeared to have been overcome when the DOJ’s investigation period finally expired. It will be intriguing to observe how this situation unfolds in the weeks and months ahead..
