Air travel

Alaska-Hawaiian Airlines Merger Faces DOJ Scrutiny

DEC 4 2023·Updated DEC 5 2023

Story

Image credit: Mario Tama/Getty Images

The Facts

Alaska Air announced on Sunday that it has agreed to buy Hawaiian Airlines in a $1.9B cash and debt deal.
CNBC
Alaska will pay $18 in cash for each share of Hawaiian — whose stock closed at $4.86 on Friday — and take on nearly $900M in debt that currently belongs to the company.
NPR
Alaska Airlines CEO Ben Minicucci will head the combined company, which is set to retain the branding of both airlines' and be based in Seattle.
NPR
The deal is expected to face scrutiny from federal regulators, amid challenges to a merger between JetBlue and Spirit Airlines.
wapo
The top four US airlines — Southwest, American, Delta, and United — control nearly 80% of the nation's flight capacity. Alaska Air has a share of around 5%, while Hawaiian Airlines holds less than 2%.
CNBC
The Justice Department argues that the lack of competition due to consolidation by big aviation businesses adversely affects consumers by pushing up prices.
Forbes

Sources Split

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RIGHT

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The Spin

Narrative A

The Alaska-Hawaiian merger will help consumers by facilitating increased connectivity and improved services. This consolidation differs from recent mergers struck down by the DOJ, because Alaska Air and Hawaiian Airlines have fewer overlapping routes and a much lesser combined market share.

Quartz

Narrative B

It's up to regulators to protect consumers' best interests and ensure that companies don't utilize unfair business practices to form monopolies and raise prices. The Biden administration must challenge alliances in the airline industry, which has become too consolidated at a cost to ordinary Americans.

Metaculus Prediction

There's a 95% chance that JetBlue will announce that it has acquired Spirit Airlines before 2026, according to the Metaculus prediction community.