A proposed $1.9 billion merger between competitors Alaska Airlines and Hawaiian Airlines just cleared its most significant regulatory hurdle after federal antitrust enforcers ended their review period without blocking the deal.

The Department of Justice’s formal review period for the proposed merger under the Hart-Scott-Rodino (HSR) Act expired quietly at 12:01 a.m. Eastern time Tuesday (6:01 p.m. on Monday in Hawaii). It was almost anti-climactic given the past two weeks of heightened tension and speculation after the review period, originally slated to end Aug. 5, was extended three times.

Alaska announced the news on its website and called the development “a significant milestone in the process to join our airlines.”

Hawaiian and Alaska needed DOJ approval to complete their proposed merger agreement which was entered into Dec. 2 after the boards of directors for both air carriers approved the deal, which includes $900 million in Hawaiian debt.

This merger milestone is blockbuster news in Hawaii, where Hawaiian Airlines has a history that goes back to 1929. Hawaiian Airlines is the state’s largest carrier, with about 150 daily interisland flights and over 230 systemwide. It offers nonstop flights between Hawaii and 16 U.S. gateway cities, and service to American Samoa, Australia, Cook Islands, Japan, New Zealand, South Korea and Tahiti.

Alaska Airlines and its regional partners serve over 120 destinations across the United States, Belize, Canada, Costa Rica, Mexico, Bahamas and Guatemala.

There’s potentially a lot riding on the merger, given Hawaiian’s financial challenges now and over the past several years.Hawaiian reported a second-quarter net loss on July 30 of $1.30 a share, or $67.6 million, as compared with a $12.3 million loss a year ago. When adjusted for nonrecurring costs, the second-­quarter loss came to $1.37 a share.

The DOJ enforces Section 7 of the Clayton Act, which prohibits mergers and acquisitions that may substantially lessen competition or create a monopoly, and recently the Biden administration has taken a tough stance against airline industry consolidation. In 2023 the DOJ, along with the Attorneys General of the Commonwealth of Massachusetts, the State of New York, and the District of Columbia, filed a civil antitrust lawsuit to block the merger of JetBlue and Spirit.

To achieve full regulatory clearance, the Alaska-Hawaiian merger is still subject to other customary closing conditions, mainly the U.S. Department of Transportation’s approval of an interim exemption application, which is needed to close the transaction. The DOT exemption approval historically has followed DOJ approval by no more than 48 hours ; however, the current administration is taking a less deferential approach to DOJ’s processes.

Hawaii Gov. Josh Green issued a statement today saying that he and his administration had worked with Alaska Airlines’ leadership to review the potential impacts of consolidation and “we insisted that any changes expand travel options for our residents and preserve union jobs.”

“Alaska has reinforced commitments to our state and will maintain the Hawaiian Airlines brand, preserve and grow union jobs in our Hawaii, as well as continue to provide crucial passenger and air cargo service to, from, and within the islands,” Green said. “The merger will vastly expand the number of destinations throughout North America for Hawaii residents that can be reached nonstop or one-stop from the islands, and HawaiianMiles members will retain the value of their miles while gaining access to more destinations around the world.”

Green said he appreciated DOJ’s strong consideration of Hawaii’s unique needs during its review.

“I am confident that by the joining of these two airlines, a stronger company will emerge and offer more travel options for Hawaii residents and local businesses — and will enhance competition across the U.S. airline industry,” he said.

Hawaiian and Alaska must remain competitors until the regulatory process is completed.

Day one of the combined company is expected to start once the money is transferred over. When that happens, Hawaiian shareholders, who approved the deal Feb. 16, are set to receive a premium of $18 in cash per share. Hawaiian’s stock closed Monday at $15.88.

When the deal was announced, Alaska Airlines President and CEO Ben Minicucci and Hawaiian Airlines President and CEO Peter Ingram told the Honolulu Star-Advertiser that the new company will maintain and burnish the brands of Alaska and Hawaiian Airlines.

The combined organization will be based in Seattle under Minicucci’s leadership. But the top airline executives told the Star-Advertiser when the deal was announced that most of Hawaiian Airlines’ nearly 7,300 employees would keep their jobs if the sale is approved by shareholders and federal regulators.

The airlines have said they would honor existing miles from the Alaska Airlines Mileage Plan and the Hawaiian Airlines HawaiianMiles loyalty programs for frequent flyers, which are expected to integrate into a shared loyalty program.