A consumer antitrust lawsuit filed Monday in the U.S. District Court for Hawaii seeks to stop the acquisition of the 95-year-old Hawaiian Airlines by Alaska Airlines on the grounds that the merger would result in higher fares, fewer flights, job losses, and cause injury to Hawaii’s economy.

The suit was filed on behalf of eight passengers: Warren Yoshimoto, Kristin Barroga, Sean Kettley, Carolyn Fjord, Don Freeland, Don Fry, Bill Rubinsohn and Clyde Stensrud. The passengers, including three Hawaii residents, are represented by antitrust attorney Joseph Alioto and Tatiana Wallace of the Alioto Law Firm in San Francisco and Terence O’Toole, Andy Lautenbach and Kukui Claydon of the Starn, O’Toole, Marcus and Fisher law firm in Honolulu.

The suit alleges that if the merger goes through, Alaska would end up with “40% of the Hawaii U.S. mainland market and over 60% of the interisland market” and “could buy its way into Asia and the Pacific along with its mega-alliance, rather than enter through competition.”

Alioto told the Honolulu Star-Advertiser that if the merger is granted, Alaska likely would reduce flights on 12 overlapping routes, raise fares and other fees, and reduce capacity.

“The policy of the U.S. promotes competition rather than acquisitions or mergers,” he said. “That’s because competition lowers prices, it increases the number of jobs and it increases output. Mergers do exactly the opposite. They raise the price. They fire people right away, and they cut production or availability of flights.”

The suit notes that Hawaiian Airlines supports approximately $10 billion in economic activity in Hawaii and employs over 7,200 workers, most of whom reside in Hawaii. It also plays a major role in cargo transports.

“If Alaska were ever able to acquire Hawaiian, their reservation center in Honolulu would be transferred to Seattle. That’s what happened when Alaska bought Virgin America,” Alioto said. “Virgin America was a new, innovative, exciting airline, and Alaska bought them and no one ever heard of them anymore.”

Hawaiian Airlines declined to provide an immediate comment. An Alaska Airlines spokesperson said in a statement, “Lawsuits like this one are a normal occurrence in public company mergers, and we are not able to comment further on pending litigation.”

The proposed merger was announced Dec. 3, the day after the boards of directors for both air carriers approved Alaska Airlines’ purchase of Hawaiian Airlines in a $1.9 billion deal, which includes $900 million in Hawaiian debt.

On Feb. 16, Hawaiian stockholders considered the proposed merger, and a majority voted to approve it — an important milestone toward combining the airlines. The Hawaiian shareholders’ approval vote was critical as it was required for the deal to move forward. If the merger is approved, Hawaiian shareholders are set to receive a premium of $18 in cash per share. Hawaiian’s stock, which was trading at $4.86 a share when the deal was announced, closed Monday at $13.27.

The merger also requires approval from competition authorities, including the U.S. Department of Justice and state attorneys general. These steps could prove challenging as the Biden administration has taken a tough stance against airline industry consolidation.

Alioto said, “Now I think under the Biden administration, which is very, very good, that to some extent antitrust is coming back to life in the government. But it has always existed with the private people.”

Alioto said such private actions are separate and apart from the action taken by the government, which sued in the JetBlue­-Spirit Airlines merger but elected not to sue in many other past instances, including when Alaska bought Virgin America.

Alioto also is the lead attorney for the group that filed an antitrust federal lawsuit in the Northern District of California challenging the JetBlue-Spirit merger. That consumer suit, which is still proceeding, was separate from a suit filed by the Justice Department saying that eliminating Spirit, the nation’s biggest low-cost airline, would drive up fares.

On March 4, JetBlue announced it had reached an agreement with Spirit to terminate their July 2022 merger agreement. That announcement came after U.S. District Judge William Young on Jan. 16 blocked JetBlue’s purchase of Spirit. Young said the government had proved that the merger “would substantially lessen competition” and violated a century-old antitrust law.

There are still more hurdles to go in the proposed Hawaiian-Alaska merger. However, one earlier lawsuit was voluntarily dismissed March 7 by plaintiff Deann Owen, who filed a lawsuit Jan. 10 in U.S. District Court of the Southern District of New York seeking to enjoin the Hawaiian Airlines stockholder vote on the transaction, claiming that the sales process was unfair and would result in irreparable injury.

Hawaiian Airlines President and CEO Peter Ingram and Alaska Airlines President and CEO Ben Minicucci did not provide comments for this story. However, they previously characterized the potential merger as pro-consumer and pro-competitive on Feb. 1 when they spoke during a “Hawaiian Airlines Business Luncheon” hosted by the Chamber of Commerce Hawaii.

Hawaiian and Alaska officially have filed with the U.S. Justice Department for antitrust clearance, and both Ingram and Minicucci maintained at the chamber luncheon that their situation is vastly different from that of JetBlue and Spirit. They said their deal doesn’t involve a low-cost carrier, their operations have little overlap and customers will benefit from expanded travel options and services.

“We feel strongly as we go through the process that our merger will prevail,” Minicucci said at the chamber event.

While Hawaiian has said its balance sheet is strong, the airline’s debt situation has left some speculating that if the merger with Alaska doesn’t work out, Hawaiian could face a third bankruptcy. However, Ingram indicated during the fireside chat that Hawaiian had not been actively searching for a buyer before entering into negotiations with Alaska and had been working on its own recovery plan as an independent airline.

Ingram said at the fireside chat, “We think it is a better outcome for our company. It’s a better outcome for our employees. It’s a better outcome for our shareholders. It’s good for consumers. But if for some reason we had to go back to the other plan, we are completely confident in our ability to execute that as well.”

———

The Associated Press contributed to this report.