Alaska Air Group and Hawaiian Holdings ink $1.9bn merger agreement

Alaska Air Group, Inc. (NYSE: ALK), and Hawaiian Holdings, Inc. (NASDAQ: HA) have entered a definitive agreement, marking a significant move in the aviation industry. Alaska Airlines, part of Alaska Air Group, will acquire Hawaiian Airlines for $18.00 per share in cash. The transaction, valued at approximately $1.9 billion, includes Hawaiian Airlines’ net debt of $0.9 billion.

This strategic acquisition aims to enhance consumer options and expand critical air service access across the Pacific region, Continental United States, and globally. It represents a major step for both airlines in growing and competing more effectively in the U.S. market. The merger is expected to provide long-term job opportunities, continued investment in local communities, and a focus on environmental stewardship.

Alaska Airlines and Hawaiian Airlines, deeply rooted in the 49th and 50th U.S. states, share a commitment to employee care, community service, and environmental responsibility. The merger will preserve both brands while operating on a single platform, safeguarding union-represented jobs and promoting economic development in Hawai’i. The combined network will offer more options and international connectivity, including access to the oneworld Alliance.

Ben Minicucci, CEO of Alaska Airlines, expressed excitement about the merger, citing a deep respect for Hawaiian Airlines and a commitment to investing in Hawai’i. Peter Ingram, President and CEO of Hawaiian Airlines, echoed these sentiments, highlighting the complementary networks and shared culture of service.

The merger will create a combined annual passenger base of 54.7 million. It will preserve Alaska Airlines’ and Hawaiian Airlines’ brands while integrating into a single operating platform. This will enhance product offerings, expand travel options, and increase connectivity across both networks, including non-stop service to 29 international destinations.

For Hawai’i residents, the merger promises expanded service, more non-stop destinations from the Islands, robust Neighbor Island service, and increased air cargo capacity. Honolulu will become a key Alaska Airlines hub, offering greater international connectivity for West Coast travelers.

The transaction also offers benefits for loyalty program members, connecting Hawaiian Airlines’ loyalty members with enhanced benefits through an industry-leading program.

The merger prioritizes employee growth, community investment, and cultural perpetuation. It will maintain union-represented jobs in Hawai’i, support workforce development initiatives, and continue investment in local communities. The combined airline will also focus on sustainable practices, including advancing the market for sustainable aviation fuel (SAF).

Financially, the transaction is expected to generate value for shareholders of both companies. It includes an all-cash transaction of $18.00 per share for Hawaiian Airlines, reflecting a compelling premium. The deal is anticipated to be accretive to Alaska Airlines’ earnings and return on invested capital (ROIC), with synergies and value creation expected post-merger.

The acquisition, approved by both boards, is subject to regulatory approvals, approval by Hawaiian Holdings, Inc. shareholders, and other customary closing conditions. The combined organization will be headquartered in Seattle under the leadership of Alaska Airlines CEO Ben Minicucci, with a dedicated team focusing on integration planning.

Advisors for the transaction include BofA Securities and PJT Partners for Alaska Airlines, and Barclays for Hawaiian Airlines.