The future of the proposed merger between Alaska Airlines and Hawaiian Airlines remains shrouded in uncertainty as the Department of Justice (DOJ) completes its review period. While both airlines eagerly await the DOJ’s decision, recent reports have cast a shadow of doubt on the deal’s prospects, with subtle shifts in Alaska Airlines’ official statements regarding the review period raising questions.
Although both airlines have officially announced the conclusion of the investigation period mandated by the Hart-Scott-Rodino (HSR) Act, signaling their readiness for the next stage in the acquisition process, widespread belief persists that the relevant authorities have yet to finalize their evaluation. Particularly concerning is the potential impact of the merger on specific overlapping routes.
According to a report by CTFN, highlighted by Seeking Alpha, the Departments of Justice and Transportation are expected to continue their review, focusing on routes where the merger could reduce service from two carriers to one. Both Alaska Airlines and Hawaiian Airlines offer regular scheduled flights from the US mainland to various destinations in Hawaii. Notably, several routes, especially those originating from major West Coast cities like Los Angeles, San Francisco, Seattle, Portland, and San Diego, overlap between the two airlines. If the merger proceeds, these routes could potentially experience a reduction in the number of services offered.
The process of merging two airlines is inherently complex and time-consuming, and the Alaska-Hawaiian merger proves to be no exception. The process officially commenced last July when both airlines submitted their initial application to the Department of Transportation (DOT). Since then, the merger has progressed through various stages. In July 2024, reports emerged suggesting that the Department of Justice (DOJ) was likely opposed to the merger, leading to a significant decline in Hawaiian Airlines’ stock prices. Additionally, some passengers filed a lawsuit claiming that the merger would result in reduced service on specific routes and potentially higher airfares. However, a judge recently dismissed this lawsuit.
Despite the recent conclusion of the DOJ’s investigation period, after two extensions, the future of the merger remains uncertain. The continued review by the DOJ and DOT, particularly concerning overlapping routes, raises significant concerns about the potential impact on competition and consumer choice. The coming weeks and months will be crucial in determining the fate of this high-profile merger, and the aviation industry watches closely.
