Alaska Airlines to Buy Hawaiian Airlines

Alaska Airlines has entered into an agreement to acquire Hawaiian Airlines, a deal estimated at around $1.9 billion. The amalgamated entity will be headquartered in Seattle, the base of Alaska Airlines, and led by its current CEO, Ben Minicucci. Both airlines aim to integrate their resources while preserving their individual brand identities.

The purchase agreement involves Alaska Air Group acquiring Hawaiian Airlines for $18 per share, coupled with assuming $900 million of its debt. Hawaiian and Alaska Airlines anticipate the acquisition to conclude within 12 to 18 months, subject to regulatory approval and consent from Hawaiian’s shareholders.

The acquisition is expected to triple nonstop or one-stop flights from Hawaii to destinations in North America and expand Hawaiian’s long-haul operations under Alaska’s umbrella. Alaska Airlines foresees enhanced earnings within two years, leveraging synergies estimated at a minimum of $235 million.

Hawaiian Airlines has encountered several challenges, leading to consistent net losses since the beginning of 2020 for Hawaiian Airlines, while Alaska Airlines and other carriers stabilized their financial positions post-pandemic.

Shane Tackett, CFO of Alaska Airlines, expressed that the acquisition presented a unique opportunity considering Hawaiian’s valuation. He highlighted the potential for both companies to establish a dominant position in the premium-travel Hawaii market.

During a call with analysts, CEO Ben Minicucci expressed confidence in the approval process, citing the overlap of 12 markets, a joint schedule of 1,400 daily flights, and a strengthened network to compete with major carriers.

The Association of Flight Attendants-CWA stated that their support for the merger would depend on its impact on Flight Attendants’ working conditions.

The merger signifies a strategic shift for Alaska Airlines, combining Boeing and Airbus jets from Hawaiian’s fleet, which will diversify Alaska’s aircraft roster. Hawaiian’s CEO, Peter Ingram, affirmed that the Hawaiian brand will continue as a vital part of the home state, Hawaii, with Honolulu becoming a pivotal hub for the unified company’s operations.

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