Alaska Airlines buys Hawaiian Airlines for $1.9 BILLION - including $900M in net debt

Alaska Airlines has entered an agreement to acquire Hawaiian Airlines for $1.9billion, 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 deal offers expanded service for residents of Hawaii, tripling the number of destinations throughout North America that can be reached nonstop or through one stop

Ben Minicucci, Alaska Airlines CEO, expressed the company's 'longstanding and deep respect' for Hawaiian Airlines. He will oversee the organization from Seattle

He added: '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.' 

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.'

The combination of domestic, international and cargo networks is poised to expand choice for the carriers' combined 54.7 million annual passengers.

The deal offers expanded service for residents of the 50th state, tripling the number of destinations throughout North America that can be reached nonstop or one stop from the Islands.

It also promises opportunities for career advancement, competitive pay and geographic mobility for employees. 

The country's largest flight attendants union, the Association of Flight Attendants-CWA, pledged to guarantee improved conditions for flight attendants following the merger.

The organization represents 6,800 flight attendants at Alaska and another 2,200 at Hawaiian.

Hawaiian Airlines promised opportunities for career advancement and competitive pay, among other benefits, in a press release

Peter Ingram, president and CEO of Hawaiian  Airlines, hopes the deal will accelerate investments in the carrier's 'guest experience and technology' while maintaining the Hawaiian brand

The deal is expected to face scrutiny amid the Biden administration's commitment to reducing the stranglehold of monopolies

The International Association of Machinists and Aerospace Workers (IAM) expressed similar, cautiously optimistic sentiment.

'Our membership at Alaska and Hawaiian Airlines are rightfully proud of the work they've done to make these carriers successful,' said Mike Klemm, the IAM District 141 president and directing general chair.

He added: 'We will use every resource necessary to ensure that their livelihoods are protected during this acquisition.'

Hawaiian Airlines is in its 95th year and serves as the state's largest carrier, with around 150 daily inter-island flights as well as nonstop flights to 15 domestic gateway cities.

The carrier also offers service to American Samoa, Australia, Cook Islands, Japan, New Zealand, South Korea and Tahiti.

Peter Ingram, Hawaiian Airlines's president and CEO, pledged to 'deliver more for our guests, employees and the communities that we serve.'

'In Alaska Airlines, we are joining an airline that has long served Hawaii, and has a complementary network and a shared culture of service,' he said. 

'With the additional scale and resources that this transaction with Alaska Airlines brings, we will be able to accelerate investments in our guest experience and technology, while maintaining the Hawaiian Airlines brand.'

The deal is expected to face scrutiny amid the Biden administration's steadfast  commitment to reducing the control of monopolies.

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 - but was slapped with an antitrust lawsuit on behalf of the Department of Justice in March

The DOJ deems Spirit an industry 'disrupter' due to its ultra-low prices and fears the merger will hurt consumers who rely on Spirit's competitive fares to afford air travel

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.