Alaska Airlines, the fifth largest airline in North America, announced on Sunday that it had agreed to acquire Hawaiian Airlines for $1.9 billion.
While approved by both Hawaiian and Alaska boards, the deal still needs to be approved by regulatory boards and Hawaiian Holdings, the carrier's holding company, shareholders. The deal is expected to close in 12 to 18 months.
If fully approved, the deal will create a combined airline that serves close to 55 million passengers annually, keeping the new Alaska as the fifth largest North American airline by passengers carried behind Delta, American, Southwest, and United. It will create a combined fleet of 365 narrow and wide-body aircraft, and a combined network of 138 destinations, not including destinations served via Alaska’s oneworld Alliance.
More uniquely, the deal brings together two carriers that grew out of a need to connect residents of two noncontiguous states to the continental U.S.
“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,” Ben Minicucci, Alaska Airlines CEO, said in the announcement on Sunday.
“We have a longstanding and deep respect for Hawaiian Airlines, for their role as a top employer in Hawai‘i, and for how their brand and people carry the warm culture of aloha around the globe. 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.”
Alaska plans to preserve the Hawaiian brand and continue to operate it separately from Alaska. The new Alaska will remain headquartered in Seattle while creating a hub for Alaska Airlines in Honolulu.
The two airlines will operate under a single platform and will combine to expand service for Hawaii, tripling the number of destinations that can be reached throughout North America from the state. Alaska said in the announcement on Sunday. The two will also connect loyalty programs, creating a single loyalty platform that will receive the full complement of oneworld Alliance benefits.
Plans also call for Alaska to add more international connections for West Coast travelers to the Asia-Pacific region with one-stop service from Hawaii.
“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,” said Peter Ingram, Hawaiian Airlines President and CEO. “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. 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.”
There's no word yet on the outlook for regulatory approval. Some recent mergers and acquisitions, including JetBlue's acquisition of Spirit, have caught the ire of governmental regulations. Still, Alaska was optimistic of the 12 to 18 months timeframe in the announcement on Sunday.