In a recent update, Alaska Air Group, which owns Alaska Airlines, alongside Hawaiian Airlines' parent company, Hawaiian Holdings, has announced that the review period set by the US Department of Justice (DOJ) regarding their proposed merger has concluded without any apparent objections. This development marks a pivotal moment in the merger process, which has been under the scrutiny of regulators.
The agreement for Alaska Air to acquire Hawaiian Airlines, valued at around $1.9 billion, was made in December. At that time, both corporations acknowledged that the transaction was subject to regulatory approval and anticipated the completion of the acquisition within a timeline of 12 to 18 months.
This timeline has now been reaffirmed following the recent announcement by the companies. Last week, in a significant move, Alaska Air and Hawaiian Airlines agreed with the DOJ to extend the merger review period until 12:01 AM ET on Tuesday, shifting from a previous deadline of 12:01 AM on Friday, details disclosed in separate filings with the Securities and Exchange Commission (SEC) made clear.
In a notable aspect, the DOJ did not respond to inquiries regarding the matter from financial news outlets. On the stock market front, shares of Alaska Air experienced a slight decline, dropping by 0.2% during midday trading on Tuesday, while Hawaiian Airlines saw a significant surge, climbing by 12%.
This fluctuation in share prices reflects market reactions to the merger developments. In a statement released Monday, Alaska Airlines emphasized, "This is a significant milestone in the process to join our airlines." The statement further noted that during the DOJ's review, Alaska worked closely with the Hawai'i Attorney General to reinforce and expand upon their commitments for the future operations of Hawaiian Airlines and their dedication to the consumers in Hawai'i. Moreover, the airlines have taken steps by reportedly filing an application to operate as a single entity under one certificate.
The Department of Transportation (DOT) has indicated its willingness to grant this approval if it deemed it beneficial for the public interest, as reported by CNBC. Both airlines have expressed their commitment to cooperate with the DOT and continue to collaborate throughout this process, as highlighted in their SEC filings.
Discussing financials, Hawaiian Airlines disclosed that its second-quarter adjusted loss widened to $1.37 per share compared to merely $0.47 in the previous year. Contrarily, total operating revenue saw a 3.5% improvement, reaching $731.9 million. In a similar vein, Alaska Air's adjusted earnings per share fell to $2.55 for the June quarter, down from $3 the preceding year; simultaneously, its operating revenue climbed by 2% to nearly $2.9 billion, showcasing the varied financial landscapes of both airlines.
Hawaii Governor Josh Green has expressed optimism regarding the merger, stating, "I am confident that by the joining of these two airlines, a stronger company will emerge and offer more travel options for Hawai'i residents and local businesses -- and will enhance competition across the US airline industry." This insight elucidates the broader implications of the merger beyond mere financial statistics, emphasizing improved service offerings and competitive landscape enhancements. The current price of Alaska Air stands at $34.83, reflecting a slight change of -0.13, and a percent change of -0.37..