Alaska Airlines Completes $1.9B Acquisition of Hawaiian Airlines
Alaska Airlines and Hawaiian Airlines will maintain distinct brand identities, even as they begin to operate as a single carrier.
Photo Credit: Alaska Airlines
Less than a year after announcing a $1.9 billion deal to fold Hawaiian Airlines into Alaska Airlines, the acquisition is complete. The parent company of Alaska Airlines, the country’s fifth-largest carrier by passenger load, now formally owns the tenth largest, Hawaiian Airlines.
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“This is a historic day for Alaska Airlines as we officially join with Hawaiian Airlines,” says Alaska Air Group CEO and President Ben Minicucci. “Alaska and Hawaiian share tremendous pride in connecting communities with award-winning service, and we look forward to inviting more guests on board to experience what makes both brands unique.”
Alaska Airlines and Hawaiian Airlines are still working to secure a single operating certificate with the Federal Aviation Administration, which would enable them to unify as a single carrier with an integrated passenger service system. In the interim, the airlines will continue to operate as separate carriers with no immediate changes to operations and will maintain separate websites, reservation systems, and loyalty programs.
Hawaiian Airlines’ stock is being de-listed on the NASDAQ. The combined organization now trades under the ticker ALK on the New York Stock Exchange.
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Joe Sprague, previously Alaska Airlines’ regional president of Hawai‘i/Pacific and president of Horizon Air, will serve as Hawaiian Airlines CEO until the Federal Aviation Administration grants a single operating certificate.
“We are truly honored to join forces with Hawaiian Airlines and its ninety-five-year history,” says Sprague. “We have much to learn from our new colleagues. I know we will be stronger together as we offer greater access and benefits both to Hawai‘i residents and guests visiting the Islands.”
The boards of both parent companies, Alaska Air Group and Hawaiian Holdings, approved the deal last December. The cash transaction worth $18 per share includes $900 million of Hawaiian Airlines net debt. Regulatory approval occurred more swiftly than the twelve months originally anticipated.
Alaska Airlines has about 23,000 employees worldwide, about 2,000 of them in its namesake state. That makes the company the 11th-largest private sector employer in Alaska. Hawaiian Airlines, in business since 1929, is among the largest employers in its home state.
Minicucci says, “Among Alaska, Hawaiian, and Horizon Air, we have more than 230 years of history flying guests and serving communities. I know we will build on that legacy and become stronger together—providing the excellent operation guests have come to expect, expanding options to seamlessly travel nearly anywhere in the world, and securing the financial stability and value that inspires investment.”
Both airlines’ networks service 138 destinations, including non-stop service to twenty-nine top international destinations in the Americas, Asia, Australia, and the South Pacific. Honolulu becomes the second-largest hub city for Alaska Airlines, which entered the Hawai’i market about sixteen years ago.
With a combined 54.7 million annual passengers, the merged airline remains the fifth largest in the United States behind American, Delta, Southwest, and United Airlines.
Alaska Airlines says the combination fits with its corporate strategy to expand options for West Coast travelers while enhancing organic growth. Approximately $235 million of expected run-rate synergies reflect a conservative estimate of the transaction’s synergy potential.
BofA Securities and PJT Partners served as financial advisors and O’Melveny & Myers served as legal advisor to Alaska Airlines. Barclays served as financial advisor and Wilson Sonsini Goodrich & Rosati served as legal advisor to Hawaiian Airlines.
