Hawaiian Airlines (HA, Honolulu) parent Hawaiian Holdings saw its stock plummet by 9% on July 25 following reports that the United States Department of Justice (DOJ) is unlikely to approve its proposed USD1.9 billion merger with Alaska Airlines (AS, Seattle Tacoma International) holding Alaska Air Group.
According to financial markets news site Seeking Alpha, traders were reacting to a report by a similar site, CTFN, citing unnamed but well-placed sources as saying that the DOJ was preparing to challenge the merger or block the deal altogether. "The parties haven't given any remedies because there are no enforceable remedies," one source told CTFN.
Capitol Forum reported that the DOJ and state attorney generals were preparing to file a lawsuit against the proposed merger but were also "considering alternative actions."
In May, Hawaiian Holdings and Alaska Air Group announced they had complied with a second request from the DOJ's antitrust division to submit additional information and documents, triggering a 90-day waiting period ending August 5 for the Department to decide on the transaction.
According to reports, market uncertainty around the merger was being fuelled by the DOJ having blocked the merger in January between JetBlue Airways (B6, New York JFK) and Spirit Airlines (NK, Fort Lauderdale International).
Hawaiian Holdings agreed on December 2, 2023, to merge with Alaska Air Group and its wholly-owned subsidiary Marlin Acquisition Corp. Under the terms, Marlin would merge with Hawaiian Holdings, which would continue to operate as a subsidiary of Alaska Air Group. Alaska would assume USD900 million of Hawaiian's debt. Both companies' boards have approved the merger, which aims to combine their operations while maintaining separate brand identities.
ch-aviation has reached out to both airlines for comment.
