In a surprise move, Alaska Airlines and Hawaiian Airlines, the fifth and 15th largest airlines in the USA, have decided to merge, creating a combined airline carrying 52m passengers annually.
Alaska had 41.5m passengers in 2002 and 46.7m pre pandemic. Hawaiian had 10m passengers in 2022 and 11.7m pre pandemic.
A join statement said “the merger will maintain the strong and high-quality brands of both airlines, along with a single loyalty programmes:”
- Both Alaska Airlines and Hawaiian Airlines will continue to operate under their respected brands, providing passengers with exceptional service and reliability that they have come to expect.
- The merger will offer passengers a wider range of high-quality and affordable options for air travel, including Alaska Airlines’ low-fare choices and Hawaiian Airlines’ international and long-haul products.
- Passengers will benefit from increased connectivity and choice across both airlines’ networks, with access to 138 destinations and non-stop service to 29 international destinations in the Americas, Asia, Australia, and the South Pacific.
- The combination will triple the number of destinations in North America that can be reached nonstop or with one stop from the Islands. This expansion will also include robust Neighbour Island service and increased air cargo capacity.
- Honolulu will become a crucial hub for Alaska Airlines, facilitating improved international connectivity for travellers from the West Coast throughout the Asia-Pacific region.
- The merger will result in increased benefits for loyalty programme members, including earning and redeeming miles on more partners, access to expanded global lounges, and benefits from the combined loyalty program’s co-brand credit card. The merger also aims to generate substantial benefits for employees and communities in Hawai’i.
- An investor conference call is scheduled to discuss further details.
With a fleet of 365 narrow and wide body airplanes, the combined airline (still fifth largest airline in the US behind American, Delta, Southwest and Unitd and ahead of Jetbble) will offer flights to 138 destinations through their combined networks, and over 1,200 destinations through the oneworld Alliance.
The statement emphasised the commitment to Hawaii remains steadfast and the city of Honolulu will become a significant hub for the merged airline, providing more services to residents of Hawaii for travel to the Continental US, as well as offering new connections to Asia and the Pacific for US fliers.
The merger is expected to create immediate value, with an all-cash transaction of $18 per share, offering a premium for Hawaiian Airlines shareholders. It is also anticipated to be profitable for Alaska’s earnings within two years, with projected synergies of at least $235m.
Ben Minicucci, Alaska Airlines CEO said “as airlines rooted in the 49th and 50th U.S. states, which are uniquely reliant upon air travel, Alaska Airlines and Hawaiian Airlines share a deep commitment to caring for their employees, guests and communities. This combination will build on the 90+ year legacies and cultures of these two service-oriented airlines, preserve both beloved brands on a single operating platform, and protect and grow union-represented jobs and economic development opportunities in Hawai’i, with a combined network that will provide more options and added international connectivity for travellers through airline partners including, the oneworld Alliance. This combination is an exciting next step in our collective journey to provide a better travel experience for our guests and expand options for West Coast and Hawai’i travelers,” said. “We have a longstanding and deep respect for Hawaiian Airlines, for their role as a top employer in Hawai’i, and for how their brand and people carry the warm culture of aloha around the globe. Our two airlines are powered by incredible employees, with 90+ year legacies and values grounded in caring for the special places and people that we serve. I am grateful to the more than 23,000 Alaska Airlines employees who are proud to have served Hawai’i for over 16 years, and we are fully committed to investing in the communities of Hawai’i and maintaining robust Neighbor Island service that Hawaiian Airlines travelers have come to expect. We look forward to deepening this stewardship as our airlines come together, while providing unmatched value to customers, employees, communities and owners.“
Peter Ingram, Hawaiian Airlines President and CEO said: “Since 1929, Hawaiian Airlines has been an integral part of life in Hawai’i, and together with Alaska Airlines we will be able to deliver more for our guests, employees and the communities that we serve,” said. “In Alaska Airlines, we are joining an airline that has long served Hawai’i, and has a complementary network and a shared culture of service. With the additional scale and resources that this transaction with Alaska Airlines brings, we will be able to accelerate investments in our guest experience and technology, while maintaining the Hawaiian Airlines brand. We are also pleased to deliver significant, immediate and compelling value to our shareholders through this all-cash transaction. Together, Hawaiian Airlines and Alaska Airlines can bring our authentic brands of hospitality to more of the world while continuing to serve our valued local communities.“
