Alaska Airlines to buy Hawaiian Airlines in $1.9B deal; both brands to remain separate, CEOs say

Dec. 3—Alaska Air Group, Inc. will pay $18 a share for Hawaiian Holdings, Inc., the parent of Hawaiian Airlines.

UPDATE : 11 :02 a.m.

The Alaska Airlines acquisition of Hawaiian Airlines will not result in the loss of any union jobs and the "majority " of the 1, 400 non-union employees will be retained to run the expanded service, the companies' top executives say.

The new company will maintain and burnish the brands of Alaska and Hawaiian Airlines, Hawaiian Airlines's president and CEO Peter Ingram, and Alaska Airlines CEO Ben Minicucci told the Honolulu Star-Advertiser in an interview this morning shortly after the $1.9 billion deal was announced.

Until the shareholder review and regulatory processes play out, Hawaiian and Alaska will "remain competitors, " Ingram said.

"Nothing changes in terms of how we operate our business on the Hawaiian side, " Ingram said. "We don't have any plans for reductions in activities during that period of time."

Alaska Airlines will not cut Hawaiian Airlines' union workforce, Minicucci said.

"No union jobs are going away ... with this combination. Honolulu becomes our second-largest hub in the Alaska system, behind Seattle. We'll need many non-union jobs, " said Minicucci, who added that exact staffing numbers won't be available until the deal is finalized in 12-18 months. "We will need a significant portion of the people who already work here going forward."

Ingram said the commitment to keep about 5, 800 union jobs and trying to find a place for the 1, 400 non-union workers was "very important " to Hawaiian Airlines' leadership team while negotiating the deal.

"We're very concerned about the potential impacts to employment and one thing that gives us comfort going forward is that this creates a platform, for growth in the long-term, " said Ingram, who emphasized that "none of those decisions have been made yet."

Minicucci said that the combined company that he will run as CEO will "keep the brands separate."

"This is a big, unique decision. It just makes a lot of sense. Hawaiian has been in business for 94 years, they are admired and respected here ... they built a strong legacy ... they have massive loyalty here, " he said. "We have a beloved brand in the Pacific Northwest and strong loyalty so when we thought of the combination going forward ... this cannot be one brand ... this has to be a dual brand strategy to ensure a successful integration with employees, customers, and communities. We really need the majority of the people already employed today at Hawaiian."

Existing miles from the Alaska Airlines Mileage Plan and the Hawaiian Airlines HawaiianMiles loyalty programs for frequent flyers will be honored both before and after the airlines combine, according to Hawaiian spokesperson Alex da Silva in an email to the Star-Advertiser. "After closing, the two airlines' loyalty programs will integrate into a shared loyalty program, " da Silva said in an email.

Ingram said he believes keeping the Hawaiian brand alive will "resonate " with employees.

"This is huge news for the 7, 300 people who work for Hawaiian Airlines and today is going to be a difficult day ... a lot of emotion and people anxious about what the future entails as the news comes out, " Ingram said. "I think that fact that ... the Hawaiian Airlines brand is absolutely going to continue ... really shows the respect that the Alaska team has for what our group has built over the last 94 years."

EARLIER COVERAGE Alaska Airlines will acquire Hawaiian Airlines in a $1.9 billion deal, the companies announced today.

Alaska Air Group, Inc. will pay $18 a share for Hawaiian Holdings, Inc., the parent of Hawaiian Airlines. Hawaiian's stock closed at $4.86 a share on Friday. The deal includes $900 million in Hawaiian debt, which airline executives say raises the total value of the deal to $1.9 billion.

The transaction has been approved by both boards, the companies said in a news release this morning. The acquisition requires regulatory approvals, approval by Hawaiian Holdings shareholders, which is expected to be sought in the first quarter of 2024, and other closing conditions. It is expected to close in 12-18 months, the companies said.

The combined organization will be based in Seattle under the leadership of Alaska Airlines CEO Ben Minicucci.

"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, " Minicucci said in the news release. "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."

Peter Ingram, Hawaiian Airlines's president and CEO, said, "Since 1929, Hawaiian Airlines has been an integral part of life in Hawaii, and together with Alaska Airlines we will be able to deliver more for our guests, employees and the communities that we serve.

"In Alaska Airlines, we are joining an airline that has long served Hawaii, and has a complementary network and a shared culture of service. With the additional scale and resources that this transaction with Alaska Airlines brings, we will be able to accelerate investments in our guest experience and technology, while maintaining the Hawaiian Airlines brand."

The airlines said the merger "will expand service and convenience by tripling the number of destinations throughout North America that can be reached nonstop or one stop from the islands, while maintaining robust Neighbor Island service and increasing air cargo capacity."

Airline officials said in the news release that "Honolulu will become a key Alaska Airlines hub, enabling greater international connectivity for West Coast travelers throughout the Asia-Pacific region with one-stop service through Hawaii."

Alaska Airlines executives said the airline and and its regional partners serve over 120 destinations across the United States, Belize, Canada, Costa Rica and Mexico with new service to the Bahamas and Guatemala beginning in December.

Hawaiian Airlines is in its 95th year and is the state's largest carrier, with about 150 daily inter-island flights, and nonstop flights between Hawaii and 15 U.S. gateway cities, and service to American Samoa, Australia, Cook Islands, Japan, New Zealand, South Korea and Tahiti.

The airlines said in the announcement that the merger will :—Expand the fifth-largest U.S. airline to a fleet of 365 narrow and wide body airplanes ;—Make Honolulu a key hub for the combined airline with expanded service for residents of Hawaii to the continental U.S. and creating new connections to Asia and the Pacific for travelers across the U.S.;—Maintain a commitment to Hawaii, including "robust " neighbor island service ;—Maintain and grow a union-represented workforce in Hawaii.------Staff writer Peter Boylan contributed to this report.------