The proposed merger between Alaska Air Group, which owns Alaska Airlines, and Hawaiian Airlines' parent company, Hawaiian Holdings, has reached a new milestone as the review period by the U.S. Department of Justice (DOJ) has elapsed without any substantial objections. This merger, valued at approximately $1.9 billion, aims to create a robust airline partnership that could redefine competitive dynamics within the airline industry, especially for travelers in Hawai'i. In December, Alaska Airlines and Hawaiian Holdings announced their intent to merge, emphasizing that regulatory approval was a crucial step for the deal to proceed.
The companies initially anticipated that the process would take between 12 and 18 months. Recently, they agreed to extend the review period to 12:01 AM ET on Tuesday, in a move the DOJ reportedly supports. Notably, the DOJ has yet to provide a public comment regarding this development, signaling an ongoing observation rather than outright disapproval. On the trading front, shares of Alaska Air experienced a slight decline of 0.2% during midday trading on Tuesday, while Hawaiian Holdings saw a notable uptick of 12%, reflecting investor confidence in the merger's potential.
Alaska Airlines acknowledged the progress in the merger process, highlighting their collaboration with the Hawai'i Attorney General throughout the DOJ's review. "This is a significant milestone in the process to join our airlines," the company stated on their official website. They are also reinforcing commitments to enhance service for Hawaiian consumers. As part of the merger, both airlines are pursuing an application to operate under a single certificate through the Department of Transportation (DOT).
A spokesperson for the DOT stated that approval will be granted if the merger is deemed to be in the public interest, reiterating the ongoing willingness of both Alaska and Hawaiian to assist in this regulatory review. Recent financial reports from both airlines shed light on their current standing.
Hawaiian Airlines disclosed an adjusted loss of $1.37 per share for the second quarter, a substantial increase from a loss of $0.47 per share in the previous year. Meanwhile, the total operating revenue for Hawaiian improved by 3.5% to reach $731.9 million. In contrast, Alaska Air reported a decline in adjusted earnings per share (EPS) to $2.55 for the June quarter, down from $3 the previous year, although their operating revenue grew by 2% to nearly $2.9 billion. Hawai'i Governor Josh Green expressed optimism about the merger, affirming that the collaboration of these two airlines would lead to a stronger entity capable of offering expanded travel options for residents and local businesses alike.
He underlined that this merger could significantly elevate competition across the U.S. airline industry. As stakeholders await further updates, the broader implications of this merger for consumers, local businesses, and the airline sector itself continue to unfold, showcasing the evolving landscape of air travel in and around Hawai'i..