Alaska Airlines completed the acquisition of Hawaiian Airlinesthe companies said Wednesday, a day after the U.S. Department of Transportation approved the deal on the condition that the airlines maintain the value of their frequent flyer programs and keep several key routes.
The merger agreement between the two airlines was reviewed by the US Department of Justice last month. The decision now lies with the Department of Transportation, which also has to review airline mergers.
The U.S. Department of Transportation said airlines must ensure that miles earned in the HawaiianMiles and Alaska Mileage Plan programs do not expire and can be transferred on a 1:1 basis before the introduction of a new, combined loyalty points system.
They must also maintain “essential air support” for rural areas and maintain current levels of service for passenger and cargo routes between the Hawaiian Islands, US Transportation Secretary Pete Buttigieg said in a press conference.
“This more proactive approach to merger review marks a new chapter in the U.S. Department of Transportation’s work to advocate for passengers’ rights and promote a more equitable aviation sector in America,” Buttigieg said in a press release. The agency said the protections will last for six years.
The Department of Transport noted that while the airlines could complete the transaction, they still need approval for a transfer application that would allow them to consolidate and operate international routes under a single license.
Following the U.S. Department of Transportation’s announcement, Alaska said it would establish a transition team to oversee the merger of the two companies while they apply for a joint operating license from the Federal Aviation Administration (FAA). Joe Sprague – currently Alaska Airlines’ regional president for Hawaii – will be named CEO of Hawaiian Airlines after the transaction closes, pending the FAA process, the company said.
Another airline deal failed earlier this year. A federal judge blocked JetBluePurchase of the low-cost airline for almost $4 billion Spirit Airlines a victory for the Justice Department, which had challenged the deal, on antitrust grounds.
When announcing their merger plans in December, Alaska and Hawaiian said they would retain their respective airline brands but operate under a single platform. Together they would have a fleet of more than 360 aircraft and fly to more than 130 destinations.
Hawaiian must also adopt Alaska’s approach and guarantee family seats at no additional charge and pay compensation if the airline causes significant flight delays or cancellations, the Department of Transportation said.
