Alaska Air's USD1B bid for Hawaiian Airlines triggers regulatory examination

(MENAFN) The airline industry faces renewed scrutiny over consolidation as Alaska Air Group's proposed acquisition of Hawaiian Airlines for USD1 billion in cash draws attention and raises questions about the impact on consumers. This move follows the Biden administration's tough stance against mergers, signaling a close examination of the deal, which is smaller than the significant mergers that reshaped the industry over a decade ago.

Alaska Airlines' parent company, Alaska Air Group, unveiled the acquisition plan on Sunday, announcing a substantial offer of USD18 per share for Hawaiian Airlines. This bid represents a significant premium over Hawaiian's closing stock price on the preceding Friday. Hawaiian Airlines, grappling with challenges stemming from the pandemic and increased competition, particularly from Southwest on intra-island flights, has reported losses totaling USD159 million this year.

The Biden administration's commitment to scrutinizing mergers is further evident in its opposition to another proposed deal — JetBlue's bid to acquire Spirit Airlines, reinforcing a broader strategy against industry consolidation. The Justice Department is expected to closely evaluate both the Alaska-Hawaiian and JetBlue-Spirit transactions.

Alaska Air Group's proposal comes with a unique twist, as it suggests that Hawaiian Airlines will continue to operate as a stand-alone brand. This decision adds an unusual element to the deal, aiming to address concerns about potential market concentration and maintain a semblance of competition within the industry.

As these airline buyouts unfold, the debate over consolidation in the industry reignites, with stakeholders considering the implications for market competition, consumer choice, and the broader landscape of air travel. The outcome of these proposed acquisitions will likely have a lasting impact on the future trajectory of the airline sector.


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