Alaska Airlines agreed to acquire Hawaiian Airlines in a $1.9 billion deal, announced Sunday.
The combined airline would maintain both brand identities, an unusual move in a market dominated by a handful of big brand names. Both airlines are smaller than their competitors, but between each other have few overlapping routes. The two companies believe the merger will expand connectivity for their customers, such as allowing them to fly to Washington D.C. from Hawaii.
“We combine two companies with shared values that have competed and survived longer than most through many industry cycles, enhancing our differentiated business model and creating a stronger competitor to network carriers,” Alaska CEO Ben Minicucci said in a conference call with investors.
If approved by regulators, Alaska Air will pay $18 per share in cash, a 270% premium from Hawaiian’s stock prices on Friday, which closed at $4.86 a share. The new company would be based in Seattle, where Alaska Air’s headquarters currently are.
Hawaiian Airlines hit a twelve-year low this fall, with shares falling by 52.6%, largely attributed to the Maui wildfires and troubles with engine recall, exacerbated by high fuel costs.
Whether the deal will pass regulator scrutiny is still in question, with the Biden administration noticeably wary of airline mergers and potentially increased air fares. The Justice Department filed a lawsuit in March to block JetBlue’s acquisition of Spirit Airlines, stating it “would put travel out of reach for many cost-conscious travelers.” A JetBlue-American Airlines codesharing partnership was also blocked under antitrust law in July.