As Alaska Airlines’ proposed $1.9 billion acquisition of rival Hawaiian Airlines awaits regulatory approval, the carriers are requesting an exemption that would allow them to operate under common ownership upon the deal’s closure.
In a joint application filed with the US Department of Transportation on 15 July, Alaska and Hawaiian requested transfer of Hawaiian’s international route authority to potential parent company Alaska Air Group.
Hawaiian currently operates an international network reaching six countries – Japan, South Korea, Australia, New Zealand, French Polynesia and the USA.
The airlines are requesting an exemption that would allow Hawaiian to continue operating international flights following the closure of its acquisition by Alaska Air Group.
“Following the transaction closing, Alaska and Hawaiian will be commonly owned and controlled but will continue to operate separately until their operations can be merged under a single operating certificate,” the companies say.
Alaska and Hawaiian say they are “willing to accept the standard condition imposed by the department on such exemptions requiring that the carriers be maintained and operated as separate companies until the department issues a final decision on the route transfer application”.
The companies request that the DOT “promptly grant this exemption request”, as it would provide continuity to Hawaiian’s international operations upon the transaction’s approval.
They also point to previous airline acquisitions as precedent, including those involving Alaska and Virgin American, American Airlines and US Airways, and Southwest Airlines and AirTran Airways.
“This exemption application is entirely consistent with those precedents and the department’s underlying practice of granting such exemptions,” the companies say.
Alaska and Hawaiian entered a merger agreement on 3 December, under which Hawaiian would become a wholly owned subsidiary of Alaska Air Group and the Hawaiian brand would be preserved. The companies stated at the time that the deal was expected to close in 12-18 months.
Hawaiian Holdings shareholders approved the deal on 16 February.
The proposed tie-up is being reviewed by the US Department of Justice (DOJ), which has seemingly taken an unfavourable view of airline partnerships and acquisitions in recent years. The DOJ successfully blocked both the Northeast Alliance shared by American and JetBlue Airways and JetBlue’s proposed purchase of ultra-low-cost carrier Spirit Airlines.
In March, Hawaiian’s chief executive Peter Ingram told FlightGlobal Alaska Airlines had a high level of interest in Hawaiian’s order book of Boeing 787s.
Hawaiian currently operates two recently delivered Dreamliners and has 10 more of the twin-engined widebody jets on order, according to Cirium fleets data.
