Alaska Air, Hawaiian Airlines merger clears DOJ hurdle. Will it benefit flyers?
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Hawaiian Airlines and Alaska Airlines are the latest U.S. carriers seeking to merge.
The airlines cleared a regulatory hurdle with the Justice Department and are now waiting for approval from the Transportation Department of an interim exemption application.
JetBlue and Spirit had similar intentions to do so, but those plans fell through earlier this year after a federal judge blocked the $3.8 billion deal due to antitrust concerns.
ALASKA AIRLINES AND HAWAIIAN AIRLINES MERGER CLEARS REGULATORY HURDLE, WILL NOW BE REVIEWED BY DOT
Clint Henderson, managing editor of The Points Guy, told FOX Business that it was surprising the DOJ let this merger proceed given the fact that the mergers and acquisitions in the industry have faced tough scrutiny from regulators.
A Hawaiian Airlines airplane takes off near an Alaska Airlines airplane at Los Angeles International Airport in Los Angeles, California, on Dec. 5, 2023. (Eric Thayer/Bloomberg via Getty Images / Getty Images)
However, "in this case, while both airlines are large in the market between Hawaii and the mainland, there is still a lot of competition in the market including from Southwest, Delta, American and United," Henderson said, adding that "It’s not likely to be as anticompetitive as a merger between larger players."
Similarly, Katy Nastro, spokesperson for booking site Going.com, said that this merger would be less disruptive to the overall market than a JetBlue-Spirit merger would have been.
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"If the Justice Department allowed JetBlue and Spirit to merge, there would be one fewer ultra-low-cost carrier helping to pull down prices," Nastro said.
How this could affect travelers
Alaska and Hawaiian claimed that the proposed merger would expand benefits and choice for consumers throughout Hawaii, the Asia-Pacific region, continental U.S. and globally.
Generally speaking, competition is the "single-biggest cause of cheap flights."
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According to Nastro, a "merger between two airlines – whose route maps have a portion of flights that overlap – would result not in more cheap flights for consumers but, to some extent, fewer."
A Hawaiian Airlines Airbus A330 taxis at Daniel K. Inouye International Airport on Jan. 20, 2024 in Honolulu, Hawaii. (Photo by Kevin Carter/Getty Images / Getty Images)
However, Henderson doesn't believe this will have any major impact on prices, since there is a lot of competition in the markets where Hawaiian operates.
"Alaska also has no flights between Hawaiian islands, so that is not a competitive threat. It’s mostly Southwest and Hawaiian that operate interisland flights," Henderson said, adding that unions, airline workers and the state of Hawaii have all been fairly supportive of this merger.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ALK | ALASKA AIR GROUP INC. | 39.48 | -0.32 | -0.80% |
| HA | HAWAIIAN HOLDINGS INC. | 17.43 | +0.27 | +1.57% |
Henderson noted that demand in Hawaii is down overall, and multiple carriers are currently offering deals.
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If the two carriers were to merge, then Hawaiian frequent flyers would be the real winners, according to Nastro and Henderson.
"Hawaiian Miles will become a lot more valuable when tied to Alaska since they are part of the Oneworld alliance," Nastro said. "This inclusion now opens up many redemption and accrual opportunities with Oneworld partners," such as British Airways and Iberia.