Updated 10:30 a.m., Hawaii time. We are doing live updates as this develops. Stay tuned for more information. In a rather shocking announcement this morning, to be followed by a press conference at 3:00 this afternoon in Honolulu, that Beat of Hawaii is attending. Alaska Airlines has entered into a definitive agreement to acquire Hawaiian Airlines as of December 3, 2024 for $2 billion.
“We have such mixed feelings about this, both in terms of the Hawaiian brand and nostalgia, but also given the reality of Hawaiian’s waning ability as a regional carrier to be sustainable going forward.”
Beat of Hawaii
This is huge for Hawaii travelers, and for Hawaii itself. There are a myriad of ramifications for this and we are trying to digest them as we publish. These include:
- A huge shake-up in interisland travel and in mainland travel.
- Mileage programs and how those will work going forward, That is yet to be defined.
- Lounges – Alaska doesn’t have one in Honolulu while Hawaiian has two, as one example. Alaska also has mainland lounges, whereas Hawaiian hasn’t had any for years.
- Branding – at this point the announcement says that Hawaiian will retain its own brand. Our own take is that branding could evolve over time.
- Philippine-based call center status used by Hawaiian. Alaska on the other hand has its own, US-based call center, which has far better service.
- Furthermore, we now understand perhaps why Hawaiian has been silent on their myriad of ongoing technology issues. With this acquisition and moving to Alaska’s far more evolved systems, those Hawaiian Airlines problems will disappear.
- It isn’t clear what will become of the Hawaiian Airlines’ management and other teams.
- This addresses concerns about the long-term viability of a regional airline, such as Hawaiian.
- The new airline will remain based in Seattle, and not in Honolulu.
When combined, the carrier will represent the fifth largest U.S. airline. It will have a fleet of 365 both narrow-body and wide-body aircraft from both Boeing and Airbus. The airline will fly to 138 destinations through combined networks and more than 1,200 destinations through the Oneworld Alliance to which Alaska already belongs and Hawaiian will become part of.
Honolulu will become a key hub for the combined company.
Hawaii will be retained as a key hub for both US travel as well as Asia-Pacific travel. It will continue to include the interisland service which has operated for many decades.
The deal is said to be an all-cash transaction of $18 per share which is to be attractive for Hawaiian Airlines shareholders.
A joint press release at 9am stated that “Alaska Air Group, Inc. (NYSE: ALK), and Hawaiian Holdings, Inc. (NASDAQ: HA) today announced that they have entered into a definitive agreement under which Alaska Airlines will acquire Hawaiian Airlines for $18.00 per share in cash, for a transaction value of approximately $1.9 billion, inclusive of $0.9 billion of Hawaiian Airlines net debt. The combined company will unlock more destinations for consumers and expand choice of critical air service options and access throughout the Pacific region, Continental United States and globally. The transaction is expected to enable a stronger platform for growth and competition in the U.S., as well as long-term job opportunities for employees, continued investment in local communities and environmental stewardship.”
“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. 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.”
Ben Minicucci, Alaska Airlines CEO.
“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 Peter Ingram, Hawaiian Airlines President and CEO. “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.”
Preserving both Hawaiian AIrlines and Alaska Airlines brands
The combined airline plans to maintain both Alaska Airlines and Hawaiian Airlines brands while integrating into operations into a single functional platform. That while continue to leverage the brand recognition associated with both airlines.
An enhanced product offering for a wide range of consumers is promised.
“The combination preserves and expands high-quality, best-in-class product offerings with price points to make air travel accessible to a wide range of consumers across a range of cabin classes, including greater choice between Alaska Airlines’ high-value, low-fare options and Hawaiian Airlines’ international and long-haul product on par with network carriers. Complementary networks expand travel options: Passengers traveling throughout the Continental U.S., U.S. West Coast and across the Pacific will benefit from more choice and increased connectivity across both airlines’ networks, with service to 138 destinations including non-stop service to 29 top international destinations in the Americas, Asia, Australia and the South Pacific, and combined access to over 1,200 destinations through the oneworld Alliance. Expanded service for Hawai‘i: For Hawai‘i residents, the combination will expand service and convenience by tripling the number of destinations throughout North America that can be reached nonstop or one stop from the Islands, while maintaining robust Neighbor Island service and increasing air cargo capacity.
Strategic Honolulu hub: Honolulu will become a key Alaska Airlines hub, enabling greater international connectivity for West Coast travelers throughout the Asia-Pacific region with one-stop service through Hawai‘i.
Increased loyalty program benefits: The transaction will connect Hawaiian Airlines’ loyalty members with enhanced benefits through an industry-leading loyalty program for the combined airline, including the ability to earn and redeem miles on 29 global partners and receive elite benefits on the full complement of oneworld Alliance airlines, expanded global lounge access and benefits of the combined program’s co-brand credit card.”
The transaction agreement has been approved by both boards.
“The acquisition is conditioned on required regulatory approvals, approval by Hawaiian Holdings, Inc. shareholders (which is expected to be sought in the first quarter of 2024), and other customary closing conditions. It is expected to close in 12-18 months. The combined organization will be based in Seattle under the leadership of Alaska Airlines CEO Ben Minicucci. A dedicated leadership team will be established to focus on integration planning.”
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