Alaska Airlines and Hawaiian Airlines to Combine In Alaska Buyout

Alaska Airlines announced on Sunday that they intend to buy Hawaiian Airlines.  I just received an email from Alaska Airlines so I will post this article ver batum from the email.

From Alaska Airlines

Alaska Airlines’ continued aim is to elevate the travel experience, with premium products and services, our award-winning care, and continued expansion of connectivity and access for you – our guests – with things like new routes and global access through our 29 partner airlines including the oneworld Alliance. This combination is a unique opportunity to advance that journey with a company that shares our commitment to service, excellence, and care.

Today is a historic day for Alaska Airlines. As you are one of our most loyal guests, I want to share the news personally that Alaska Airlines and Hawaiian Airlines have reached an agreement to combine, expanding service and benefits for our guests, opportunities for our employees, and continued investment in the community.

Hawaiian Airlines is a remarkable airline for whom we have deep admiration and respect, with a unique spirit and legacy, and values that are deeply aligned with ours. By joining together as one airline, we can build on our respective 90+ year legacies, do more for travelers and for our employees, and create a stronger platform on which to compete and sustain for the future. Here are a few highlights:

• Preserving the Hawaiian Airlines brand: The beloved Hawaiian Airlines brand will remain, reflected on airplanes, at airports and elsewhere. It will exist alongside the Alaska Airlines brand, supported by a single operating platform and industry-leading loyalty program.
• More destinations: Guests will benefit from more choice and increased international connectivity with a combined network of 138 destinations including non-stop service to 29 international destinations such as Tokyo, Seoul, Sydney and Auckland, as well as over 1,200 global destinations through the oneworld Alliance. The combined airline will have a fleet of 365 narrow- and wide-body airplanes.
• Commitment to Hawai‘i: We will expand service and convenience for Hawai‘i residents, maintain and grow union-represented jobs in the Hawaiian Islands, continue to invest in our employees’ careers and workforce development for the future, work with local communities to build a vibrant future for Hawai‘i, and invest in environmental sustainability.

Alaska Airlines has been proud to serve Hawai‘i for over sixteen years. At the same time, we know we have more to learn and feel a deep responsibility to serve the people of Hawai‘i for generations to come.

The process for approval of Alaska Airlines’ acquisition of Hawaiian Airlines will take 12 to 18 months and both companies will continue to operate as they do today until that time. You’ll continue to have access to your generous Mileage Plan benefits as they are today, which will only continue to improve. While nothing changes in the short term, we will communicate as milestones are reached. For more information & cautionary statements: localcareglobalreach.com.

From Hawaiian Airlines 

Hawaiian Airlines posted a merger Q&A on their website.

WHAT ARE THE BENEFITS OF THE PROPOSED MERGER FOR GUESTS?

For our customers, bringing together these two airlines will enhance your travel experience with:

• More choice and increased international connectivity across both airlines’ networks, with service to 138 destinations including non-stop service to 29 top international destinations and combined access to over 1,200 destinations through the oneworld Alliance.
• The presentation and expansion of high-quality, best-in-class product offerings with price points to make air travel accessible to a wide range of consumers across a range of cabin classes, including greater choice between Alaska Airlines’ high-value, low-fare options and Hawaiian Airlines’ international and long-haul product on par with network carriers.
• The benefits of the industry’s highest-value customer loyalty program for the combined airline, including the ability to earn and redeem miles on 29 global partners and receive elite benefits on the full complement of oneworld Alliance airlines, expanded global lounge access, and benefits of the combined program’s co-brand credit card.
• Continued investment in environmental sustainability and the well-being of the communities we serve.

• Both names and brands will remain. The expanded airlines will maintain both industry-leading Alaska Airlines and Hawaiian Airlines brands while integrating into a single operating platform and loyalty program, enabling the remarkable service and hospitality of each to be enjoyed by passengers into the future with continued excellence in operational reliability, trust and guest satisfaction for which both companies have been consistently recognized.

WILL THERE BE ANY IMPACT TO HAWAIIAN TRAVEL RESERVATIONS?

• No. Guests will not see any changes to their existing travel reservations.
• Know that you can continue to confidently book future travel with Hawaiian Airlines and your existing miles will be honored.
• Both before and after the combination is complete, you can continue to book, track and manage flights – including earning and redeeming frequent flyer benefits and HawaiianMiles – through our app and online at www.hawaiianairlines.com.

WHAT DOES THIS MEAN FOR HAWAIIANMILES?

• Both before and after the combination is official, your existing miles will be honored.
• After closing, the two airlines’ loyalty programs will integrate into a shared loyalty program.
• Hawaiian Airlines’ existing customers will enjoy the benefits of the industry’s highest-value customer loyalty program, earning and redeeming miles and receiving elite benefits on the full complement of oneworld Alliance airlines, global lounge access, and companion passes with the Alaska Airlines brand credit card.
• You can continue to earn and redeem frequent flyer benefits and HawaiianMiles on our app and online at www.hawaiianairlines.com.

WILL ANYTHING CHANGE FOR GUESTS IMMEDIATELY?

• No. Both before and after the combination is complete, you can continue to book, track and manage flights – including earning and redeeming frequent flyer benefits and HawaiianMiles – through our app and online at www.hawaiianairlines.com.
• It’s business as usual and we look forward to sharing reliable, hospitable service across our network – between the U.S. Mainland and Hawaii, within the Islands and to international destinations – now and into the future.
• Importantly, even after the transaction closes, we will continue to operate under the Hawaiian Airlines brand with local regional headquarters in Honolulu, and we will maintain our commitment to sharing the spirit of our islands.

DOES HAWAIIAN PLAN TO STOP FLYING TO ANY DESTINATIONS?

• Together and through the oneworld Alliance, the expanded company’s networks will provide passengers combined access to over 1,200 destinations, including non-stop service to 29 top international destinations in the Americas, Asia, Australia and the South Pacific.
• Alaska Airlines is also committed to high-quality interisland service that guests traveling between the islands have counted on.
• Alaska Airlines understands Hawaiian Airlines’ responsibility to Hawai’i residents – Alaska also currently provides essential air service to 19 communities in the state of Alaska, only three of which are accessible by roads.

WHAT WILL THE COMBINED COMPANY BE CALLED?

• Both names and brands will remain. The expanded airlines will maintain both industry-leading Alaska and Hawaiian Airlines brands while integrating into a single operating platform and loyalty program, enabling the remarkable service and hospitality of each to be enjoyed by passengers into the future with continued excellence in operational reliability, trust and guest satisfaction for which both companies have been consistently recognized.
• While there is a lot to be excited about, this announcement is just the first step.
• Until the transaction closes, Hawaiian and Alaska Airlines will continue to operate as independent airlines, and it is business as usual.

Going Forward

Airline mergers are often full of pitfalls to work out.  Here are some of the issues ahead:

Common fleet type.  There is always an economy of scale when flying a single aircraft type.  Southwest proves that every day by flying only Boeing 737 aircraft.  After Alaska’s last merger with Virgin America saddled the carrier with aircraft from the Airbus A320 family.  Alaska just retired the last Airbus A320 aircraft to go back to being an all-Boeing 737 operator.  Alaska will inherit both narrow and widebody aircraft from Airbus and Boeing along with the Boeing 717 used on interisland flights.

Airline reservation system:  From the last merger, it took Alaska a long time to unify their airline booking system.  IT at Alaska is what I have considered the weak link in the airline.

Loyalty programs:  These two different programs will most likely convert to the Alaska Airlines Mileage Plan that is already linked with the Oneworld alliance.  This might make some Hawaiian loyalists unhappy as the two programs are merged.

Flight crews: Airlines have different seniority systems along with contract pay and benefits issues.  At some time, these systems and rules would probably be unified as it was in the Alaska and Virgin America merger.

Federal approval.  As in any case of a merger, it is subject to Federal approval.  This whole thing could be for not if Federal regulators fail to approve or require conditions for a merger that can’t be met.  The merger of JetBlue and Spirit Airlines still has not been approved.  JetBlue plans to back to the DOJ on Tuesday with closing arguments.

The price of the merger.  When Alaska Airlines was pursuing Virgin America, they got in a bloody bidding war with JetBlue.  By the time JetBlue dropped out of the race, Alaska Airlines had agreed to a price that was overpriced.   Alaska is buying Hawaiian Airlines for $1 billion and assuming $900 million in debt.  Is this too high a price for what they are getting? 

Final Thoughts

After watching the JetBlue and Spirit merger grind along, I suspect that the Alaska and Hawaiian merger will be closely examined.  There are a lot of moving parts to a merger this size which could take at least 18 months to close.

For Alaska frequent flyers, this may added additional award seats to the South Pacific which will supplement those limited seats from Qantas, American and Cathay Pacific.  My wife wants to go to Australia in 2025 and this just may help us with premium class award tickets.  \

This is a long way from being a done deal.  Time will tell if this merger will actually happen.

Read the rest of this article at Alaska Airlines and Hawaiian Airlines to Combine In Alaska Buyout.

* This article was originally published here