close
close

Gottagopestcontrol

Trusted News & Timely Insights

The Biden administration allows Alaska Airlines to purchase Hawaiian Air, but with conditions.
Frisco

The Biden administration allows Alaska Airlines to purchase Hawaiian Air, but with conditions.

The Biden administration is letting Alaska Airlines Purchase worth $1 billion by Hawaiian Airlines after the airlines agreed to certain conditions, including maintaining current service on routes between Hawaii and in the mainland United States, where there is not much competition.

Transportation Ministry officials said Tuesday that There are no obstacles left until the transaction was completed and the airlines began merging, although some final approvals were still pending.

Alaska Airlines expects to close the deal “in the next few days.”

Alaska shares closed down 1%, while Hawaiian Holdings shares rose 4% to $18, the price per share Alaska was willing to pay for its smaller rival.

The decision to clear the way for the airline merger contrasts with the administration’s stubborn opposition to previous airline deals. The Justice Department had successfully sued Prevent JetBlue from buying Spirit Airlines for $3.8 billion and went to court to destroy a partnership between JetBlue and American Airlines.

The Justice Department could still challenge the Alaska-Hawaii deal, but that seems unlikely.

The Department of Transportation, which also has to approve airline mergers, said Alaska and Hawaiian had committed to meeting certain conditions for six years.

These include maintaining subsidized flights to smaller communities in Alaska and Hawaii, and maintaining current levels of service between Hawaii and the mainland, where at most one other airline currently serves the same route. The Transportation Department could drop the latter requirement if the flights become unprofitable.

Alaska and Hawaiian also agreed on some consumer protection measures, including maintaining the value of Frequent flyer rewards by combining their loyalty programs and thus guaranteeing Families can sit together without additional fees and lower costs for military families.

Transportation Secretary Pete Buttigieg said the airlines had also promised Compensate passengers for cancellations and significant delays due to the fault of the transport company.

Alaska Airlines based in Seattle In a statement, it said the promises were similar to previous plans and would not affect “the synergies of the deal, which will strengthen competition and expand choice for consumers.”

The Transportation Department said it has granted Alaska and Hawaiian a waiver to combine their ownership — in other words, a merger. The department is still reviewing the two airlines’ application to fly international routes under one operating license, which is likely just a formality.

The airlines announced the deal in December when they The value was estimated at $1.9 billion including Hawaii’s debt, which Alaska will assume. Alaska has promised to keep the Hawaii brand.

The deal will solidify Alaska Air Group’s position as the fifth-largest U.S. airline by revenue and expand its international profile through Hawaiian’s extensive air services between the island nation and Asia.

LEAVE A RESPONSE

Your email address will not be published. Required fields are marked *