Alaska Airlines Agrees to Acquire Hawaiian Airlines in $1.9B Deal

Alaska Airlines has agreed to acquire Hawaiian Airlines in a deal valued at $1.9 billion, including $18 per share in cash, the carriers announced Sunday. Each airline will retain its customer-facing brand, while integrating into a single operating platform "behind the curtain," Alaska CEO Ben Minicucci said during a Sunday investor call.

The acquisition is "something we have looked at for a while," Minicucci added. "Simply put, we are acquiring a hub in a premium global leisure market that has the potential to approach Seattle in size."

Honolulu would become a key hub for the combined entity—"second only to Seattle," according to Alaska CFO Shane Tackett—with expanded service to the continental United States and new connections to Asia and throughout the Pacific.

The proposed combination would expand the fifth-largest U.S. airline to a fleet of 365 narrowbody and widebody aircraft and create a combined network of 138 destinations. It also would offer more than 1,200 destinations through the Oneworld alliance, of which Hawaiian would become a member. 

Hawaiian customers also would have access to flights made available through Alaska's partnership with American Airlines, the "West Coast International Alliance," which began in 2020 and has featured increased codesharing, reciprocal loyalty program benefits and Alaska's entry into Oneworld.

Alaska acquired Virgin America in 2016, and an analyst asked why acquire Hawaiian now, after Alaska spent the past several years resettling its product and fleet. Alaska this year became a single-aircraft fleet after divesting the planes acquired with the Virgin America deal, and will inherit 37 narrowbodies and 24 widebodies from Hawaiian, according to Tackett.

"The opportunity came to us, and when we really looked at the Hawaiian market, it's an $8 billion market, where this combination allows us to be the clear market leader … and it will be our second-largest hub," Minicucci said. "It's a step-change for us to accelerate not only our financial performance but the growth of our network."

The acquisition is subject to federal regulatory review. When asked about the pending $3.8 billion JetBlue-Spirit Airlines deal, currently in court in Boston after the U.S. Department of Justice sued to block the merger, Minicucci said "there is no relationship with what we are doing, and frankly, we're not even watching it that closely."

The Alaska-Hawaiian transaction has been approved by both company boards, according to Alaska. Hawaiian shareholders are expected to vote on the merger during the first quarter of 2024, and pending government approval and other customary closing conditions, the anticipated close date is in the next 12 to 18 months, according to Alaska.