Alaska Airlines’ bid to take over Hawaiian Airlines took a giant step forward last week with Department of Justice approval for the merger. The next steps are approvals from the Department of Transportation for their merger arrangements.
With DOJ approval in hand, the two airlines have filed papers with the Transportation Department asking to have Hawaii’s international routes, mainly to Asia, transferred to Alaska, and to have both airlines authorized to operate them. These advance arrangements are intended to allow the merger to go more smoothly than some others have. The approval would allow early work on integrating systems.
UPDATE: Alaska has subsequently modified its announcement about the Department of Justice. While the period for regulatory investigation has expired, which means the airlines can go ahead with their combination, it does not mean that DOJ can’t later sue to undo the deal or impose restrictions. The gap of several days in the two announcements could mean future trouble if the deal does not go through in the form of lawsuits from stockholders who bought or sold on the basis of the approval claim.
Alaska plans to keep the Hawaii name alive, because of its strong brand connections, although ultimately both will operate under the same operator certificate. Brand decisions can be significant; Alaska is still paying $8 million a year for the Virgin name it stopped using after taking over Virgin America.
Another reason for keeping the separate identities may lie in the two airlines’ fleets. Alaska is so all-Boeing that it quickly sold off Virgin America’s Airbus fleet and replaced it with 737s. Other than regional jets, Alaska is all 737. Hawaiian has some Boeings, including 717s flying inter-island and 787s in its long-distance fleet, but it also has significant numbers of A330s and A321s.
