By Mar-Vic Cagurangan
Alaska Air Group Inc. has reached an agreement with Hawaiian Holdings Inc. to acquire the troubled Hawaiian Airlines for $1.9 billion.
"The combined company will unlock more destinations for consumers and expand the choice of critical air service options and access throughout the Pacific region, Continental United States and globally," Alaska Air and Hawaian said in a joint announcement Sunday.
"The transaction is expected to enable a stronger platform for growth and competition in the U.S., as well as long-term job opportunities for employees, continued investment in local communities and environmental stewardship," they added.
Based on the agreement, Alaska Air will pay $18 per share in cash, for a transaction value of approximately $1.9 billion, inclusive of $0.9 billion of Hawaiian Airlines net debt.
According to the joint announcement, Honolulu will become a key hub for the combined airline with expanded service for residents of Hawai‘i to the continental U.S. and creating new connections to Asia and throughout the Pacific for travelers across the U.S.
“We have a longstanding and deep respect for Hawaiian Airlines, for their role as a top employer in Hawai‘i, and for how their brand and people carry the warm culture of aloha around the globe," said Ben Minicucci, Alaska Airlines CEO.
"Our two airlines are powered by incredible employees, with 90+ year legacies and values grounded in caring for the special places and people that we serve. I am grateful to the more than 23,000 Alaska Airlines employees who are proud to have served Hawai‘i for over 16 years, and we are fully committed to investing in the communities of Hawai‘i and maintaining robust Neighbor Island service that Hawaiian Airlines travelers have come to expect," he added.
Peter Ingram, president and CEO of Hawaiian Airlines, noted that Hawaiian Airlines has been an integral part of Hawaii's landscape since 1929.
“In Alaska Airlines, we are joining an airline that has long served Hawai‘i, and has a complementary network and a shared culture of service," Ingram said.
He said the additional scale and resources that will be generated by the transaction with Alaska Airlines will accelerate investments in the company while maintaining the Hawaiian Airlines brand.
Hawaiians have a sentimental attachment to the home airline, which is now in its 95th year of service, making it the state's longest-serving carrier.
Hawaiian offers approximately 150 daily flights within the Hawaiian Islands, and nonstop flights between Hawaiʻi and 15 U.S. gateway cities as well as service connecting Honolulu and American Samoa, Australia, Cook Islands, Japan New Zealand, South Korea and Tahiti.
“My earliest memories include flying with my dad on Hawaiian Airlines from
Hilo to the Big City," said Rep Ed Case of Hawaii. "So, like all of us, it is difficult to accept that this truly kamaʻāina company, such a deep part of the lives of generations of residents and visitors, may not continue as an independent and uniquely Hawaiian enterprise. But if this is going to and needs to happen to maintain Hawaiian’s contributions to our state, Alaska Airlines is a promising partner."
Case said the agreement to carry on with the Hawaiian brand and employ more than 7,000 Hawaiians is "very welcome."
“What matters, though, is that there are full, binding and transparent
commitments to back up those words," Cazse said. "That must be our focus in the upcoming federal and state review and approval processes and community
discussions of this major change in our Hawai‘i fabric.”
Earlier this year, United Airlines sought to take over an unutilized nighttime slot pair at Tokyo Haneda International Airport currently held by Hawaiian Airlines as part of its plan to open a route between Haneda and Guam.
United pointed out that even before the devastating wildfires hit Maui, Hawaiian was not fully utilizing its Haneda slot and that there was no indication that Hawaiian intends to fully utilize the slot pair.
The U.S. Department of Transportation, however, denied United’s application, noting Hawaiian's "commitments to resume full daily utilization of the slot pair before the end of the 2023-24 winter season."
“Against that background, we do not find a basis to conclude that reallocation of the authority is warranted at this stage or that we should specifically direct Hawaiian to resume daily service ahead of its announced plans," the department said.