Runway clears for Alaska, Hawaiian Airlines merger after DOJ review expires

Simone Del Rosario: A merger between airlines that offer service to the 49th and 50th states is closer to becoming a reality.

It’s rare to see big mergers go unchallenged these days by the Biden administration. That said, the Justice Department will seemingly not challenge Alaska Air’s bid to scoop up Hawaiian Airlines after a review period expired after midnight Tuesday morning. The buyout is valued at around $1.9 billion dollars.

The merger, which would combine North America’s sixth and sixteenth largest airlines by passengers carried, still faces approval by the Department of Transportation. A regulatory filing with the SEC Tuesday said there are still issues that need to be addressed before getting the deal approved.

But after escaping DOJ scrutiny, Alaska Air said in a statement, “This is a significant milestone in the process to join our airlines.”

Instead of becoming one company under a single name, both brands will remain intact if the merger is completed. Alaska emphasized its commitment to maintaining the Hawaiian brand, jobs and continuing service between, to and from the islands.

Last week a federal judge in Hawaii dismissed a consumer lawsuit to stop the merger that claimed it would cut routes and raise prices.

If approved, it will be the first major merger in the industry since Alaska bought Virgin America for $2.6 billion in 2016.

The DOJ previously succeeding in stopping JetBlue from acquiring Spirit Airlines. It also put the kibosh on a proposed partnership between JetBlue and American on Northeast service.

Despite increasing market share, an Alaska-Hawaiian combo would be the 5th largest U.S. carrier behind American, Delta, Southwest and United.

For SAN, I’m SDR.