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Alaska Airlines buys Hawaiian for $2B

UPI
An Alaska Air passenger jetliner on the runway at McCarran International Airport in Las Vegas, Nevada, In April 2016. File Photo by John G. Mabanglo/EPA

Dec. 3 (UPI) -- Alaska Airlines is buying Hawaiian Airlines for nearly $2 billion, the companies announced Saturday.

The two carriers were both originally formed primarily to serve the residents of America's 49th and 50th states, who rely heavily on air travel for routine transportation, as many parts of both states are accessible only by airplane or boat.

"Alaska Airlines and Hawaiian Airlines share a deep commitment to caring for their employees, guests and communities," a statement from Alaska Airlines said. "This combination 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 opportunities in Hawai'i, with a combined network that will provide more options and added international connectivity for travelers through airline partners including, the oneworld Alliance."

Alaska said the acquisition will open more routes and provide more flexibility for air travelers, though these types of acquisitions and similar mergers have proved to reduce competition and limit routes as the parent company consolidates routes to save money. Alaska Airlines will be forced to balance its future offerings with routes it has already been flying into Hawaii.

"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 robust Neighbor Island service that Hawaiian Airlines travelers have come to expect," Ben Minicucci, Alaska Airlines CEO said.

Alaska will pay $18.00 per share for Hawaiin in the all-cash deal, nearly a billion of which includes assuming $0.9 in Hawaiian Airlines debt.

"Since 1929, Hawaiian Airlines has been an integral part of life in Hawai'i, and together with Alaska Airlines we will be able to deliver more for our guests, employees and the communities that we serve," Peter Ingram, Hawaiian Airlines President and CEO said.

"We are also pleased to deliver significant, immediate and compelling value to our shareholders through this all-cash transaction."

The statement says through airlines' combined partnerships and networks, the new carrier will provide air travel options to 54.7 million passengers to 138 national and international destinations in the Americas, Asia, Australia and the South Pacific.

Honolulu will become a new hub for Alaska Airlines.

For passengers who travel from Hawaii, the combination also triples the number of nonstop or one-stop destinations throughout North America they reach from the Islands, while maintaining "Neighbor Island" service and increasing air cargo capacity, which Alaska Airlines has mastered in the 49th state.

The deal is pending regulatory approval, which is expected in the next 12-18 months. The boards of both companies have approved the sale.

Alaska also purchased Virgin American in 2016 for $2.6 billion.