Out of the blue on a December Sunday afternoon comes some news that was almost impossible to predict. Alaska Airlines will acquire, once regulatory approval arrives, Hawaiian Airlines. Consolidation isn’t quite over in the United States, here’s what will happen and why this shouldn’t be a Virgin America merger all over again.
Alaska Airlines Takes Over Hawaiian Airlines
The plan is quite clear and straight forward, Alaska Airlines will take over Hawaiian Airlines. Hawaiian was the only US full service carrier still existing as a standalone entity, without having gone any consolidation or mergers. Well soon that will no longer be the case.
It’ll be Alaska Airlines to takeover the island airline in an all cash operation worth a total of 1.9 billion dollars. That sum includes Hawaiian’s net debt of 0.9 billion dollars.
The takeover will create the fifth largest airline group in the country, behind:
- United Airlines
- Delta Air Lines
- American Airlines
- Southwest Airlines
A group which, according to last years figures, would transport approximately 54.7 million annual passengers. It is expected that the operation will be closed within the next 12 to 18 months.
A Strong Focus on The West Coast And The Pacific
What the future Alaskan-Hawaiian synergy will create is an airline with an incredibly strong focus on the US west coast and the pacific. The two carriers will work strengthen operations on the west coast and across the Pacific.
Alaskan will establish a base in Hawaii offering improved connectivity to the resto of its network. While Hawaiian Airlines will continue working on incoming leisure traffic to the islands but also look beyond. It is plausible that the Hawaii based carrier will look to the Pacific and Asia trying to become the one stop option to many major US cities.
What Will Be Of Hawaiian Airlines?
Hawaiian will maintain its brand identity. The carrier will not be absorbed into Alaska Airlines, it will continue to operate as an independent entity which will though work in a much stronger synergy with its new parent company. The new airline group will have its headquarters in Seattle.
What will merge between the two airlines is the frequent flyer programme which will become shared between Alaska and Hawaiian. Finally it is very likely that Hawaiian will follow will follow Alaska into the OneWorld alliance in order to align completely with its operations.
Why It Won’t Be Virgin America All Over Again for Alaska Airlines
Many where very quick to pick up how Alaska Airlines has worked for years to get rid of the A320 family planes it inherited from the Virgin America merger, only to have them come back in through the window with the Hawaiian acquisition. However this shouldn’t be the case. This shouldn’t be a Virgin America affair all over again.
Simply because the two airlines will not merge into 1 carrier. Hawaiian will have its own fleet and operations, so at least in the short term nothing will change, nor will Alaska Airlines have to start work on getting rid of the A321neo planes.
Things might change however on the longer term with new aircraft orders. We might see HA order planes that streamline operations with the parent company. But that is all to be seen.