Alaska Air to buy rival Hawaiian Airlines
Alaska Air has agreed to acquire Hawaiian Airlines for US$1.9 billion, which includes US$900 million of Hawaiian Airlines net debt, the companies said on Sunday, in the latest example of consolidation among US airlines. Alaska Airlines will acquire Hawaiian Airlines for US$18 per share in cash, the two companies said, adding that the transaction will unlock more destinations and expand access throughout the Pacific region, continental United States and globally. The deal is expected to generate high single-digit earnings accretion for Alaska Airlines within the first two years with no anticipated material impact on long-term balance sheet metrics. "This combination is an exciting next step in our collective journey to provide a better travel experience for our guests and expand options for West Coast and Hawai'i travelers," said Ben Minicucci, Alaska Airlines CEO. The combined organization will be based in Seattle under the leadership of Minicucci, and Honolulu will become a key Alaska Airlines hub. The deal comes at a time when the airline industry has been relying on robust demand to mitigate inflationary pressure with higher ticket prices as higher labor and fuel expenses drive up their costs, hurting their profits. The International Association of Machinists and Aerospace Workers (IAM), a trade union representing 600,000 employees in the manufacturing, aerospace industries, said it will take all steps to protect the rights of its members at both the carriers during and after the acquisition. "We will be engaged in every conversation as this agreement comes into focus and protect and defend the interests of our members," IAM District 142 President and Directing General Chair John Coveny said. Alaska Air in October had cut its full-year profit outlook on rising expenses as major US airlines felt the pinch from higher fuel prices, putting a dampener on their outlooks. (Reuters)