It’s time for cautious optimism, as the highly consequential takeover of kamaaina company Hawaiian Airlines by Alaska Airlines gets underway. For Hawaii, this $1.9 billion deal holds with it the fate of a 94-year-old firm that employs about 7,300 workers locally and is the carrier of choice for many residents for island-hopping and trips to the mainland and Asia-Pacific.
How “the spirit of aloha” will change for the state’s biggest and longest-serving airline will keep people on edge as the buyout process unfolds over the next 12 to 18 months.
Many here want to believe in the “tremendous upside” of this deal, as optimistically put by Alaska Air CEO Ben Minicucci in Sunday’s shocking announcement alongside Hawaiian Air CEO Peter Ingram. They called the deal “pro-consumer” and “pro-competitive” — and on the surface, the two airlines do look very complementary, which bodes well for consumer-choice expansion, not choice constriction. Alaska Air largely serves the U.S. West, plus Hawaii and some East Coast sites; Hawaiian Air, in addition to interisland routes, serves the West Coast, a few East Coast hubs, plus quite valuably, Japan and other Pacific destinations. Combined, the two have about 1,300 total daily flights, with only 12 of them overlapping — though those dozen routes are all in Hawaii.
Pointedly and wisely, the Hawaiian Air brand will live on, to bank on the cachet, local affinity and fairly good reputation of the longtime carrier. Because other airlines serve the Hawaii-mainland and interisland markets, airfares should — must — remain competitively affordable for consumers. But this deal will surely be scrutinized by the U.S. Department of Justice over antitrust concerns: Though Alaska would remain the nation’s No. 5 airline, post-takeover, Hawaiian and Alaska together would control about 40% of Hawaii-mainland routes.
Currently, federal regulators are suing to stop the JetBlue-Spirit merger — and though that opposition is aimed mainly on preserving Spirit as a discount airline, dissimilar to this Alaska-Hawaiian situation, it looms large.
Meanwhile, Alaska Air must stay true to its stated commitments to Hawaii, including “robust” neighbor island service, as well as on points outlined Sunday such as:
>> Retaining and growing Hawaii’s workforce. Of Hawaiian Air’s 7,300 employees, all 5,800 of its union employees were assured of keeping their jobs. That bodes well — and the prospect of growing more jobs, if expansion plans are successful, is promising.
>> Making Honolulu a key hub for the combined airline with expanded service to the mainland and creating new connections to Asia and the Pacific.
>> For travelers in frequent-flyer programs, they’ll be retaining their miles, and have access to the oneworld Alliance network.
Hawaiian Air has struggled in recent years, as evidenced by the $900 million in debt being absorbed under the $1.9 billion purchase, as well as its $4.86 share price on Friday that surged to $14.22 Monday after the buyout announcement. Its travelers have seen a series of reservations and customer service problems; and aviation experts had anticipated a takeover due to headwinds related to more interisland competition (read Southwest), engine-equipment issues, and an anemic return of Japanese visitors post-COVID, compounded by August’s wildfire that leveled Lahaina.
And there’s lingering uncertainty about the Asia bounce-back, which affects not only airlines, but the whole of Hawaii’s tourism industry.
Keeping the Hawaiian Airlines brand strong will be in both carriers’ best interests — and that will mean nurturing the goodwill that the homegrown airlines has enjoyed here for nearly a century. Residents here love the intangibles — hospitality, respect, loyalty, shared values — and already, much is being made about the similarities in corporate culture of Alaska Air in the 49th State and Hawaiian Air in this 50th State.
“We are aligned in the way we do business, the way in which we treat our employees, our engagement and support to the communities we serve,” Minicucci said.
Keeping local customers loyal and satisfied, while taking care of the thousands-strong workforce here, must remain core top priorities. In this high-stakes gambit, like it or not, Hawaii’s economy is along for the ride.