Alaska-Hawaiian Airlines merger explained: better fares and points

The merger must first face the Biden administration, which has recently scrutinized similar airline consolidations. The combined airline would be based in Washington, where Alaska’s primary hub is Seattle-Tacoma International Airport. 

The acquisition had been in the works for “several months,” a spokesperson at Alaska Airlines told SFGATE. However, airline industry analysts have promoted the merger for years. A 2019 report from the analytic firm Visual Approach made the case for a strategic merger between the airlines.

The report noted that Alaska was saddled with “limited organic growth options” for competing with other major airlines.

By gaining Hawaiian, Alaska could better compete with Southwest Airlines for West Coast and Hawaii service. The merger would also provide Alaska with a fresh fleet of widebody aircraft for long-haul routes.

The merger requires a blessing from the Justice Department, an uphill battle with the current administration.

Industry insiders are predicting healthy competition with Southwest’s low fares if the Alaska-Hawaiian merger prevails. Aviation analyst Peter Forman told Hawaii News Now that travelers could benefit from repeated fare reductions.

“Now with the financial backing of Alaska Air Group, it’s no longer one big airline and a small airline,” Forman said about competing with Southwest. “It’s two big airlines against each other, so it’s a much more even playing field now.”

The acquisition also means that the two airlines could cover 138 destinations, “including non-stop service to 29 top international destinations in the Americas, Asia, Australia and the South Pacific,” according to the news release. It would also triple the number of nonstop or one-stop flights Hawaiian Airlines could make from the islands.

“Consumers will benefit from greater choice between Alaska’s high-value, low-fare options and Hawaiian’s international and long-haul products,” Hawaiian Airlines spokesperson Alex Da Silva told SFGATE in an email. “This transaction is all about bringing together complementary domestic, international and cargo networks to enhance competition and expand choice for consumers on the West Coast and throughout the Hawaiian Islands.”

By merging with Alaska, Hawaiian Airlines would earn its place in the Oneworld Alliance. Currently, Hawaiian has specific deals with airlines like Japan Airlines, JetBlue, Korean Air, Virgin Atlantic and Virgin Australia. But if it becomes a part of the Oneworld Alliance, frequent Hawaiian fliers’ points will go a lot further between 15 other airlines, both domestic and international.

Under a single loyalty program, HawaiianMiles would become more valuable because travelers would have many more ways to redeem them. Elite members would have their status matched in the new program while accessing Oneworld Alliance perks.

For Alaska loyalty travelers, the merger would mean more access to mileage-earning and perks for Hawaiian flights.

“All existing points and status will transfer to a shared loyalty program, and miles earned with Hawaiian Airlines will not expire and will retain their value,” Da Silva said.

Hawaiian Airlines has been going through a rough patch. It lost its spot early this year as the top airline for being on time after holding the title for nearly two decades. It dropped to No. 5, partially due to a significant runway project at Daniel K. Inouye International Airport in Honolulu. Hawaiian also suffered from an internet outage that delayed passengers. In response, the airline’s CEO personally apologized to its customers. The company expected to end the year at a loss, according to Reuters.

Hawaiian Airlines employs about 7,400 people, most based in Hawaii and some 5,800 on Oahu, Da Silva said, which could conflict with Alaska Airlines’ headquarters in Seattle. Hawaii will have a “regional headquarters” for the carrier.

“In addition to Alaska’s commitment to maintain and grow union-represented jobs in Hawaii, including preserving pilot, flight attendant, maintenance bases in Honolulu and our airport operations and cargo throughout the state, there will be opportunities for non-union employees to continue with the combined company,” Da Silva said.

As for whether Hawaiian Airlines will keep the meal service that’s included with the flight, Da Silva said it’s simply too soon to tell.