Alaska Airlines anticipates closing on its $1.9 billion acquisition of Hawaiian Airlines in the next few days after the U.S. Department of Transportation gave its conditional clearance on Tuesday.
Alaska Airlines Receives DOT Approval for Hawaiian Acquisition:
Alaska Airlines anticipates closing on its $1.9 billion acquisition of Hawaiian Airlines in the next few days after the U.S. Department of Transportation gave its conditional clearance on Tuesday.
When the Justice Department chose not to contest the agreement last month, the carriers had already overcome a significant obstacle. The airlines now have a voice since the DOT has temporarily permitted them to operate under common ownership. At the same time, they work to unify their operations under a single operating certificate.
The DOT, as opposed to the Justice Department, has restricted Hawaii and Alaska. These requirements concern their reward programs, customer service, and flight levels.
The agreement mandates that the merged firm maintain or enhance service on all routes where Hawaiian and Alaska are the sole carriers or on which they are two of the three current carriers for six years following the merger’s closure. Hawaii interisland routes must also retain their current service levels.
The airlines must also uphold any current interline agreements, such as the one governing Hawaiian’s regional flights to Mokulele Airlines.
Furthermore, the merged airline will not be permitted to take any moves that would prevent its smaller competitors from using the new facilities. At the same time, it makes additional investments at Hawaiian’s hub in Honolulu.
The DOT is pushing Hawaii to apply two customer service procedures that Alaska has already implemented. Children (13 and under) and an accompanying adult must be able to guarantee adjacent seats on Hawaiian-branded flights at no additional cost. In addition, Hawaiian is being forced by the DOT to provide travelers with travel credit or frequent flyer points if a flight is delayed for more than three hours.
The DOT has also mandated lower flying expenses for active military members. Both airline brands must offer at least one carry-on bag and two complimentary checked baggage for service personnel with a military ID and their accompanying spouse and children. Additionally, they must not charge change costs to service personnel and their families who reschedule travel in response to a direction or order from the military.
Alaska has committed to keeping HawaiianMiles points’ value when converted to Alaska Mileage Plan points about the reward programs. After that, the combined airline will launch a new program where all miles are changed one to one. Additionally, HawaiianMiles redemption values need to be upheld.
Alaska has promised that miles accrued before the merger would not expire throughout the six-year duration of the deal. Additionally, when the unified loyalty program is launched, flyers having status in either the Mileage Plan or HawaiianMiles programs must keep their status advantages.
Alaska said on Tuesday that its current merger plans comply with the DOT’s criteria.
The business said that these obligations had no bearing on the arrangement’s benefits, which would increase competition and provide customers with more options.
Hawaiian Airlines’ New CEO:
Ben Minicucci, CEO of Alaska Airlines, will stay in that role. Joe Sprague, regional president of Alaska Airlines for the Hawaii and Pacific area, will succeed current CEO Peter Ingraham as CEO of Hawaiian, the airline announced. Ingraham had intended to retire following the transaction’s closing.
Sprague will continue to serve as Hawaiian’s CEO while Alaska and Hawaiian are owned jointly but run independently until they unite under a single operating certificate.
Hawaiian and Alaskan names will continue to be used after the airline operates under a single certificate, but all other operations will be centralized under one roof.
