Alaska Air Group and Hawaiian Holdings have confirmed that they have entered into a definitive agreement under which Alaska Airlines will acquire Hawaiian Airlines for $18.00 per share in cash, for a transaction value of approximately $1.9 billion, inclusive of $0.9 billion of Hawaiian Airlines net debt.
The transaction is expected to enable 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.
Alaska's publicity team hype it as a natural alliance of the big airlines of the 49th and 50th U.S. states, which are uniquely reliant upon air travel. The buyout will build on the 90+ year legacies and cultures of these two service-oriented airlines, preserve both beloved brands on a single operating platform, and protect and grow union-represented jobs and economic development.
Ben Minicucci, Alaska Airlines CEO said: “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 travellers.
Our two airlines are powered by incredible employees, with 90+ year legacies and values grounded in caring for the special places and people that we serve. I am grateful to the more than 23,000 Alaska Airlines employees who are proud to have served Hawai‘i for over 16 years, and we are fully committed to investing in the communities of Hawai‘i and maintaining the robust Neighbor Island service that Hawaiian Airlines travellers have come to expect. We look forward to deepening this stewardship as our airlines come together while providing unmatched value to customers, employees, communities and owners.”
Hawaiian Airlines President and CEO. “In Alaska Airlines, we are joining an airline that has long served Hawai‘i and has a complementary network and a shared culture of service. 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."
However, sources close to the deal have used various forums to slam the deal and the proposed benefits of the take-over that Alaska Airlines and Hawaiian Airlines have published. According to some, the Hawaiian brand will be axed within five years of the deal being finalised and is scheduled to be completely retired by the end of 2029. Staff numbers will be reduced, according to an Alaska Air staff member, by around 3500, however, it is not known if these positions will be lost through natural wastage or from which airline they will be from.
Initially, the carriers will retain their brand identity, however, will integrate into a single operating platform and uniformity of service will be introduced. The joint company will continue to offer the same fare points or cabins as currently in operation until the low-cost model can be introduced later on most routes.
The airlines say there will be a growth in union-represented jobs as Alaska claims it will maintain and grow union-represented jobs in Hawai‘i, including preserving pilot, flight attendant, and maintenance bases in Honolulu and airport operations and cargo throughout the state. Yet there is no promise on non-union jobs or assurances on wage levels.
Alaska Air also says it will maintain a 'management' presence on the islands with the 'regional' manager being based in Honolulu, however, most other functions will be at Alaska's current HQ. Apparently, there will be more opportunities for employees with greater geographic mobility for employees and a uniformity of benefits. Hawaiian Airlines' partnership with the Honolulu Community College Aeronautics Maintenance Technology Program and Alaska Airlines' Ascend Pilot Academy among others will continue for the foreseeable future, according to Alaska Air.
It is understood that Alaska will retire all of Hawaiian Airlines Airbus A321 as soon as possible, replacing them with Boeing 737 MAX jets whilst the A330 fleet (except cargo) will be replaced with an exercising of options on Hawaiian's current 787 order. Yet no confirmation has yet been received of the fleet consolidation.
The transaction agreement has been approved by both boards. The acquisition is conditioned on required regulatory approvals, approval by Hawaiian Holdings, Inc. shareholders (which is expected to be sought in the first quarter of 2024)