With the US government successfully suing to break up American and JetBlue’s partnership and currently suing to stop Spirit and JetBlue’s merger, not many saw additional industry consolidation on the table.
However Alaska and Hawaiian just announced plans to merge and create the 5th largest US airline.
Alaska Airlines would pay $18 per share of Hawaiian Airlines stock, an incredible markup over the $4.86 closing price on Friday. Alaska would maintain their Hawaiian’s Honolulu hub in addition to their own hub airports in Anchorage, Los Angeles, Portland, San Francisco, and Seattle.
If they are allowed to merge, it would represent a big coup for the OneWorld alliance, which recently added Alaska to its membership.
Airline mergers over the past 2 decades have brought much higher fares, frequent flyer program devaluations, and lower competition on many routes, but they have made the airline industry more profitable with fewer bankruptcies.
Do you think the airlines will win the right to merge?
HT: Leon F.
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25 Comments On "BREAKING: Alaska And Hawaiian Airlines Announce Merger Plans!"
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Wow 49 + 50 = 5!
Huge for the Hawaiian market and entry into Asian markets via HNL too now. Tahiti and New Zealand may get a boost with this.
Many overlapping routes, but Hawaiian probably wouldn’t survive, especially with so many of their planes out of service due to the Pratt & Whitney engine problems.
IF Amex partnership with Hawaiian remains and IF Alaska keep their award partnership with LY this could be HUGE!
I wouldn’t hold my breath
My thoughts precisely
which part, amex or Ly partnership?
If they are allowed to merge then AA and JetBlue will sue again saying its not fair.
Airlines shouldn’t be allowe to merge. Shouldn’t have been allowed since the 2000s arguably.
I would imagine that the serious markup per share would make it a slam dunk case for the regulators to block.
If you are willing to pay so much more for the airline than the market considers it to be worth, then you are not buying it to acquire the assets or the know how of the company you are buying, you are paying to rid yourself of competition and price gouge.
And for all the libertarians who think the government really ought to limit its involvement in the markets (they probably should), the government already got involved with various bailouts etc. and not has the responsibility to prevent extreme negative fallout from their prior actions.
Not arguing, just pointing out, Dan also reported years ago that they bought virgin america at a high premium as well, maybe just how they do things…. how much competition is Hawaiian to alaska?
Would the Hawaiian airlines name be dissolved?
Assuming Spirit and JetBlue, and Alaska and Hawaiian successfully merge, I wonder who’s next. Allegiant and Sun Country? Breeze?
They should probably call it Not Continental Airways.
😀
I have a crystal ball that tells me in the year 2035 there will only be 2 airlines in the United States. Seriously! With all these mergers….
If only Alaska could acquire Hawaii’s weather….
There will be a Republican in office by the time this would land up in court so it will go through.
I presume Companion Fares wouldn’t be usable on Hawaiian flights? Would be INSANE value if they were usable though.
They should rename it 4950 Air
As a family with chilkdren America west was budget friendly afterwards USair and virgin america today there is simply no decent airline to compete with the big three
Is the hawaiin market that profitable? I dont see the significant value here. I believe AS exclusively flies B737. Will that stay?
I can’t see too much of a monopoly issue here, unless they would control a significant portion of some specific travel area, e.g. NW (Portland/Seattle). Claiming that it’s monopolistic to combine to make the 5th largest airline, which is still considerably smaller than the 4 above it (by any metric), to me seems like a hard argument. I could actually see this being allowed on the grounds it provides a more stable/capable competitor to the big guys.
I also don’t see how any of the Big 3 could use this as the basis for an argument to allow them to get bigger.
Caveat: Not a lawyer by any stretch.
so the same defense would apply to spirit/jetblue
that merger is to combine the two to push into the 5th
Hi Dan, do you know what the El Al miles ticket price range would be with the new Alaska mileage partner chart in February? All we know so far is “staring at 35,000 each way” (JFK-TLV). Ty.