The deal between Alaska and Hawaiian is different from the JetBlue-Spirit merger in numerous ways, including the sizes of the carriers and their ticket prices, but it still has consumer advocates concerned. “Because of mergers and acquisitions, we have seen US cities lose all commercial air service, nonstop routes, flight frequencies, and hubs,” says McGee. “In addition, we’ve seen fares rise and service erode, and over the last few decades, hundreds of thousands of employee layoffs.”
But for other air travel analysts, the deal makes sense because of the carriers’ destination maps, the combination of which could create advantages for some travelers. “The big benefit of this is that they can put the two route networks together,” Harteveldt says. “It will be a lot easier for people who live on the mainland to get to Hawaii of course, but for the first time, Alaska Airlines customers will have the ability to take an Alaska flight to Asia and the South Pacific.”
The fact that the networks are somewhat complementary to each other means the merger could also be more easily approved. “Alaska said that the two airlines combined operate 433 routes, and the two compete head to head on only 12,” Harteveldt says. “So that bodes well for the merger case with the Department of Justice—there’s not that much overlap.”
Will the Biden administration approve the deal?
In the end, it all comes down to whether the government sees the deal as unfairly eliminating competition and giving travelers too few choices. “The government looks at mergers from the standpoint of: will consumers be harmed?” Harteveldt says. “In this case, I don’t believe there is a potential of harm to the traveling public.” Because none of the airports where the two airlines’ routes overlap are slot-controlled—meaning they take lengthy applications and approvals to win—other carriers can step in and add new flights with minimal effort, according to Harteveldt.
Even so, that doesn’t mean that the merger will be approved by the Biden administration, which has been relatively aggressive against airline consolidation. Of course, after the 2024 presidential election, a new administration with a more favorable view of airline deals could be sworn into office and green-light the merger, Harteveldt points out. The review process alone could take as long as 18 months, he says, “depending on how granular the government chooses to get.”
No matter how the government decides to rule, it’s certainly clear that the U.S. airline industry is shrinking, with “big four” carriers American, Delta, Southwest, and United controlling about 80% of the domestic market. “We now have the fewest scheduled passenger carriers in 100 years,” says McGee.
Still, Peter Ingram, Hawaiian Airlines President and CEO believe the merger means they will be able to deliver more for the communities they serve. He adds: “With the additional scale and resources that this transaction brings, we will be able to accelerate investments in our guest experience and technology, while still maintaining the Hawaiian Airlines brand.”
