Alaska Airlines (AS, Seattle Tacoma International) and Hawaiian Airlines (HA, Honolulu) announced they entered into a “timing agreement” with the United States Department of Justice (DOJ), accepting not to consummate their merger for 90 days after the date the two parties certify compliance with a second request for antitrust-related data.
The carriers, which announced Alaska Air Group’s intentions to acquire Hawaiian Holdings for around USD1.9 billion in December 2023, will not conclude their merger in this period “unless they have received written notice from the DOJ prior to the end of such 90-day period that the DOJ has closed its investigation of the merger,” Hawaiian said in a SEC filing on March 27.
In February, the Antitrust Division of the DOJ requested additional information and documentary material from both carriers. They have been working cooperatively with the department and expect to continue to do so, the airlines said. Hawaiian Holdings’ shareholders approved the airline’s planned merger on February 16.
While the Biden administration has blocked airline consolidation, first by forcing JetBlue Airways to unwind its Northeast Alliance with American Airlines and then blocking JetBlue’s acquisition of low-cost carrier Spirit Airlines, Alaska Airlines remains bullish on obtaining the necessary approvals for their merger. Ben Minicucci, chief executive of the Seattle Tacoma International-based carrier said in a March 12 conference that their deal differs completely from the previous merger attempt, arguing: “It’s hard to say that there’s a lot of negative with what we’re trying to do.”
Alaska Airlines’ management believes the deal will accelerate the group’s existing strategy, create value by bringing together two complementary networks, and preserve their independent brands. The company will also take on around USD900 million of Hawaiian’s debt.
However, the airlines have agreed that if the merger conditions are not satisfied or waived before June 2, 2025 (possibly extended to December 2025), “it is possible that the acquisition [...] agreement may be terminated,” in which case Alaska would be required to pay a USD100 million termination fee to Hawaiian.