Alaska Airlines and Hawaiian Airlines Announce Planned Merger
An Alaska Airlines plane and a Hawaiian Airlines plane

Alaska Airlines and Hawaiian Airlines Announce Planned Merger

In a surprising announcement, Alaska Airlines and Hawaiian Airlines have unveiled plans to merge.

About the merger plans:

According to a joint press release, Alaska Airlines intends to purchase Hawaiian Airlines for approximately $1.9 billion ($18 per share plus $900,000 in net debt). While the two airlines would integrate into a single operating platform under the deal, the two brands — which happen to represent the 49th and 50th states — will remain post-merger. The combined airline would be led by Alaska Airlines CEO Ben Minicucci and headquartered in Seattle. However, Honolulu (HNL) will remain a key hub for the airline. In total, Alaska and Hawaiian say their airline would have a fleet of 365 aircraft, serve 138 destinations, retain 31,200 employees, and transport an estimated 54.7 million passengers per year.

As for other details, the two airlines would also be combining their loyalty programs. Specifically, the Hawaiian Airlines’ HawaiianMiles program would fold into Alaska’s MileagePlan. The combined airline also intends to offer a co-branded credit card — although an issuer has not yet been named. Currently, the Hawaiian Airlines World Elite Mastercard is issued by Barclays while the Alaska Airlines Visa Signature is with Bank of America.

The two airlines expect that the deal will close in 12 to 18 months. Then, the combined airlines anticipate a minimum of $235 million of expected run-rate synergies within the first two years.

What they’re saying:

Announcing the planned merger, Alaska Airlines CEO (and proposed head of the combined airline) Ben Minicucci said, “This combination is an exciting next step in our collective journey to provide a better travel experience for our guests and expand options for West Coast and Hawai’i travelers.”

He continued, “Our two airlines are powered by incredible employees, with 90+ year legacies and values grounded in caring for the special places and people that we serve. I am grateful to the more than 23,000 Alaska Airlines employees who are proud to have served Hawai’i for over 16 years, and we are fully committed to investing in the communities of Hawai’i and maintaining robust Neighbor Island service that Hawaiian Airlines travelers have come to expect.”

Meanwhile, Hawaiian Airlines President and CEO Peter Ingram noted, “Since 1929, Hawaiian Airlines has been an integral part of life in Hawai’i, and together with Alaska Airlines we will be able to deliver more for our guests, employees and the communities that we serve. In Alaska Airlines, we are joining an airline that has long served Hawai’i, and has a complementary network and a shared culture of service.”

Ingram added, “With the additional scale and resources that this transaction with Alaska Airlines brings, we will be able to accelerate investments in our guest experience and technology, while maintaining the Hawaiian Airlines brand. We are also pleased to deliver significant, immediate and compelling value to our shareholders through this all-cash transaction.”

My thoughts:

While there will certainly be many details that will need to be ironed out before judgment can be passed, this proposed deal does seem as though it could be beneficial for flyers of the two airlines. Of course, there is a big “if” there, as regulators may not take too kindly to the plan. That said, unlike the controversial JetBlue-Spirit merger plans, this union seems to have less overlap and, thus, could see less scrutiny.

Overall, this is a fascinating concept and will be a merger story worth watching in the coming months.

Author

Kyle Burbank

Head Writer ~ Fioney
Kyle is the head writer for Fioney. He is a personal finance nerd, constantly looking for new apps and services to test and incorporate into his own financial game plan. In addition to his role at Fioney, he's written for other publications including Born2Invest, Lifehack, and Laughing Place, as well as his own site Money@30. He also creates personal finance and travel-related videos for Fioney's YouTube channel, which has garnered more than 2 million views. Currently, Kyle resides in Springfield, Missouri with his wife of 10 years. Together, they enjoy traveling (including visiting Disney Parks around the world), dining, and playing with their dog Rigby.

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