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.