Alaska Airlines Set to Acquire Hawaiian Airlines in $1.9 Billion Deal.

In a significant development in the airline industry, Alaska Airlines has reached an agreement to acquire Hawaiian Airlines for $1.9 billion. This deal, inclusive of Hawaiian Airlines' net debt of $900 million, marks a major consolidation move within the U.S. aviation sector.

Despite this acquisition, both airlines will continue to operate under their individual brands. Alaska Airlines CEO Ben Minicucci emphasized the importance of maintaining the Hawaiian brand, respecting its culture and legacy that spans over 94 years. This decision underlines the strategic intent to leverage the unique strengths of both airlines while ensuring continuity in brand identity and customer experience.

A notable aspect of this merger is the integration of the loyalty programs of the two airlines. For the interim period of 12 to 18 months until the deal is finalized, the loyalty statuses of customers will remain unchanged. Post-transaction, the loyalty programs are expected to merge, offering reciprocal benefits and expanded options for frequent flyers. The integration approach resembles the Marriott Bonvoy program, which brought together loyalty programs of different hotel brands under Marriott's umbrella.

The acquisition also raises questions about the impact on interisland travel in Hawaii. Alaska Airlines plans to maintain service to these air-dependent communities, similar to their commitment to remote communities in Alaska. However, the specifics of service expansion to Moloka'i and Lānaʻi are still under consideration, acknowledging the unique requirements of these routes.

From an operational standpoint, the merger is positioned to create a stronger airline entity with expanded service offerings. This includes enhanced connectivity for residents of Hawaii to the Continental U.S. and new international connections. Honolulu is set to become a key hub for the combined airline, potentially opening up new travel opportunities and boosting tourism and business travel.

The announcement of this deal came as a surprise to many, including employees of both airlines, who were informed on the same day as the public. This was a measure to prevent insider trading, as such significant industry changes can impact stock prices.

The deal is subject to approval by Hawaiian shareholders and U.S. regulators, and is expected to close within the next 12 to 18 months.