Alaska Airlines has recently announced it will be purchasing Hawaiian Airlines in what the company claims to be a 1.9 billion dollar deal. This deal, however, is still subject to approval from both airlines’ investors, as well as regulatory approval from the United States government and the U.S. Department of Justice. If finalized, this merger would combine two of the most prominent airlines in the United States and create what is likely to become one of the country’s largest carriers.
This move comes as part of Alaska Airlines’ ongoing efforts to expand its reach beyond the mainland United States. As one of the primary providers of service to the Hawaiian Islands, Hawaiian Airlines has long served as Alaska Airlines’ most prominent competitor, and by acquiring Hawaiian Airlines, Alaska Airlines would gain direct access to the lucrative Hawaiian market. As part of the deal, Alaska Airlines would acquire Hawaiian Airlines for a combination of both cash and stock, and all existing Hawaiian Airlines stockholders would also receive sizable compensation packages.
The completion of this deal is likely to have a strong impact on the airline industry in the United States, as it is projected to create a more efficient system which will be able to offer more cost effective flights in addition to having a greater reach. Furthermore, those who frequently travel between the mainland United States and Hawaii are likely to benefit from the new combined airline’s expanded routes, which would allow for more travel options.
Perhaps of greatest importance, this move seems to foreshadow a larger shift in the American airline industry. With mergers now becoming the norm, it seems that American carriers are slowly consolidating and taking advantage of the opportunities presented by shared economies of scale and greater efficiency. This, in turn, points to a possible trend that may eventually see more of the country’s airlines consolidating and merging with one another.
Only time will tell if this deal is approved and finalized, and what the long-term ramifications and implications will be, but one thing is for certain: Alaska Airlines’ purchase of Hawaiian Airlines, if successful, will have a large and lasting impact on the U.S. airline industry.