Green Light for Mega-Merger: Alaska Air and Hawaiian Holdings Set New Standard

The US Department of Transportation has approved the planned merger of Alaska Air Group and Hawaiian Holdings. The decisive factor for the $1.9 billion clearance was newly introduced consumer protection measures, enabling the final step towards the deal's implementation. As per the agreements, Alaska and Hawaiian must ensure that the values of their loyalty programs remain intact, existing routes are maintained, and support for rural regions is upheld. Additionally, fair access to the hub airport in Honolulu has been stipulated. This marks the first time the Department of Transportation has made binding protection measures a condition for a merger, emphasized Transport Secretary Pete Buttigieg in a press conference. With this decision, Alaska is now allowed to purchase Hawaiian's shares and initiate the closing process. The deal, originally announced in December and already approved by the US Department of Justice, has passed a critical milestone with this green light. Following the announcement, Hawaiian's stock rose by up to 3.9% to a two-year high of $18, while Alaska's shares remained unchanged. The transaction is expected to be completed on or around September 18 following a regulatory filing. The agreement between the Department of Transportation and the airlines is binding for six years. The combined airline must report compliance with the conditions beginning 90 days after the closing and then annually thereafter. Post-merger, the airlines face several months of operational integration, involving the alignment of management, flight schedules, training, and other standards. These processes require approval from the US aviation authority before a joint operating certificate can be issued. It should be noted, however, that this process can be time-consuming. The merger of American Airlines Group and US Airways in December 2013 also took approximately a year and a half before a joint operating certificate was issued in April 2015.