Alaska Airlines has entered an agreement to acquire Hawaiian Airlines for $1.9 billion, including $900 million of the carrier’s net debt.
According to Sunday’s announcement, Alaska Airlines will acquire Hawaiian Airlines for $18 per share in cash.
The airlines say the deal will unlock more destinations throughout the Pacific region, continental United States and globally.
The deal is expected to generate high single-digit earnings accretion for Alaska Airlines within the first two years with no anticipated material impact on long-term balance sheet metrics.
‘This combination is an exciting next step in our collective journey to provide a better travel experience for our guests and expand options for West Coast and Hawai’i travelers,’ said Ben Minicucci, Alaska Airlines CEO.
Alaska Air has entered an agreement to acquire Hawaiian Airlines for $1.9 billion, including $900 million of the airline’s net debt
The combined organization will be based in Seattle, while Honolulu will become a key Alaska Airlines hub
The combined organization will be based in Seattle under Minicucci’s leadership, and Honolulu will become a key Alaska Airlines hub.
A press release announcing the deal touts 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.’
Last year, Frontier Airlines and Spirit Airlines negotiated a merger that fell through, setting the stage for JetBlue to acquire Spirit.
JetBlue won a bidding war to buy Spirit for $3.8 billion. However, the Department of Justice filed an antitrust lawsuit in Massachusetts federal court in March.
The suit argues that JetBlue’s plan to do away with Spirit and merge its planes, routes and employees into its own operations would hurt consumers who rely on Spirit’s low fares to afford air travel.
‘We allege that if allowed to proceed, this merger will limit choices and drive up ticket prices for passengers across the country,’ Attorney General Merrick Garland said at a press conference.
‘And we further allege that the impact of this merger will be particularly harmful for travelers who rely on what are known as ultra low cost carriers in order to fly.’
The DOJ deems Spirit an industry ‘disrupter,’ asserting that its discounted rates have prompted other airlines – including JetBlue – to cut fares on competing routes.
‘JetBlue’s plan would eliminate the unique competition that Spirit provides – and about half of all ultra-low-cost airline seats in the industry – and leave tens of millions of travelers to face higher fares and fewer options,’ reads the complaint.