Alaska Airlines Buys Hawaiian Airlines For $1.9 Billion
As it stands, Alaska Airlines will acquire Hawaiian Airlines for $1.9 billion, which also includes the $0.9 billion of Hawaiian’s net debt. Shareholders of Hawaiian will have to pay an additional $18 per share in cash; however, due to the expected increase in earnings caused by the merger, this comes at a total equity value of $1.0 billion and provides a very compelling premium for Hawaiian shareholders.
The combination fits in with Alaska’s plans due to its sustained focus on expanding options for West Coast travellers and delivering an attractive value creation for the airline’s shareholders.
Complementary Networks Mean More Choice For The Combined 54.7 Million Annual Passengers
The merging of the airlines’ complementary domestic, international, and cargo networks will benefit the everyday traveller.
- It will preserve price points across a range of cabin classes to ensure air travel is accessible to a wider range of consumers. This will include a greater choice between Hawaiian Airlines’ long-hall, international flights and Alaska Airlines’ high-value, low-fare options.
- It will expand travel options as customers who are travelling throughout the Continental U.S., the U.S. West Coast, and across the Pacific will have more choices in destinations with an increased service of 138 destinations as well as non-stop service to 29 international destinations amongst the Americas, Australia, Asia, and the South Pacific. In addition, customers will also have combined access to over 1,200 destinations through the Oneworld Alliance.
- For those who reside in Hawaii, the merger will expand service across the islands and convenience customers by tripling the number of destinations throughout North America while maintaining Neighbor Island service and increasing air cargo capacity.
- Honolulu will become an essential hub, enabling greater international connectivity for West Coast travellers with a one-stop service through Hawaii.
Union Delivers Substantial Benefits For Employees And Hawaiian Communities
As the only non-contiguous U.S. states, Alaska and Hawaii heavily rely on air travel. Because of this, both airlines share a deep commitment to caring for their employees and customers, which is why this agreement makes for a strong union. Hawaiian Airlines is one of Hawaii’s largest employers, with 7000+ employees, most of whom were born or raised in Hawaiian communities.
- The merger will see a growth in union-represented jobs within Hawaii, including preserving flight attendant, pilot, and maintenance bases in Honolulu, as well as airport operations and cargo throughout the state.
- It will increase employee opportunities for career advancements, competitive pay/benefits, and geographic mobility.
- Both airlines will continue to invest in Hawaii’s local communities to help build a vibrant future for the islands. This also comes as part of the perpetuation of Hawaiian culture, committing to investing in the language and promoting regenerative tourism.
- The expected expansion of workforce development initiatives includes Hawaiian’s partnership with the Honolulu Community College Aeronautics Maintainance Technology Programme and Alaska’s Ascend Pilot Academy. These both help to support future career opportunities within Hawaii and beyond.
Ben Minicucci, Alaska Airlines CEO, said:
“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 Hawaii travelers. We have a longstanding and deep respect for Hawaiian Airlines, for their role as a top employer in Hawaii, and for how their brand and people carry the warm culture of aloha around the globe.”
Hawaiian Airlines President and CEO, Peter Ingram, stated:
“Since 1929, Hawaiian Airlines has been an integral part of life in Hawai‘i, and together with Alaska Airlines we will be able to deliver more for our guests, employees and the communities that we serve. We are joining an airline that has long served Hawai‘i, and has a complementary network and a shared culture of service.”
Both airlines have committed themselves to building upon their sustainability and their impacts on the environment, with Alaska’s five-part path to become net zero come 2040 and Hawaiian’s commitments to do the same by 2050. These efforts will be maintained. Learn more about how Alaska Airlines is helping the environment here.
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