Alaska Airlines has confirmed its agreement to acquire Hawaiian Airlines in a deal valued at $1.9 billion, including assumed debt. The transaction, revealed on Sunday, aims to bring together two carriers deeply rooted in the Pacific region, creating a combined entity with a presence in both Alaska and Hawaii.
Under the terms of the deal, Alaska Airlines will pay $18 in cash for each share of Hawaiian Airlines, which saw its stock close at $4.86 on Friday after experiencing a decline of over 50% throughout the year. The agreement also encompasses the absorption of $900 million in Hawaiian debt, taking the total value of the acquisition to $1.9 billion. Alaska Airlines CEO Ben Minicucci is slated to lead the merged company, which will be headquartered in Seattle.
The move, however, is likely to draw attention from regulatory authorities, particularly amid concerns from the Biden administration regarding potential fare increases in the airline industry. The administration has been closely monitoring industry consolidations to ensure that they do not lead to reduced competition and higher costs for consumers.
Both airlines assured that the distinctive brands of Alaska and Hawaiian would be retained, reflecting their historical significance in their respective states. The combined airline is poised to join the oneworld Alliance, a global network that includes major carriers like American Airlines, British Airways, and Cathay Pacific.
Related: EEUU: Fusión de Virgin y Alaska Airlines libra penúltimo obstáculo
The strategic rationale behind the merger is the creation of a more extensive and complementary network, offering improved connectivity to 138 destinations for passengers traveling within the continental United States and across the Pacific. This includes nonstop service to 29 international destinations in the Americas, Asia, Australia, and the South Pacific.
Hawaiian Airlines, with a rich history dating back to its incorporation in 1929 as Inter-Island Airways, has been a key player in connecting the islands. The companies expressed their commitment to keeping Honolulu as a vital hub and pledged to maintain and expand the union-represented workforce in Hawaii.
One of the significant advantages highlighted by the airlines is the tripling of destinations reachable within one stop in North America for travelers originating from Hawaii. The executives project that the merger will contribute positively to profits within two years of the deal’s completion.
As the proposed acquisition enters the regulatory scrutiny phase, industry analysts anticipate a thorough examination of its potential impact on competition, fares, and overall consumer welfare. The outcome will likely shape the future landscape of the airline industry, especially in the Pacific region.
Source: NPR
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