The merger between Alaska Airlines and Hawaiian Airlines has received approval from the Department of Transportation. This approval comes after the two carriers agreed to a set of consumer protections, including preserving the value of rewards programs and maintaining critical routes. The DOT stated that the airlines can proceed with their $1.9 billion merger, but they must operate independently until the transfer application is approved. Once the application is approved, the consumer protections will remain in effect for six years.
The Department of Transportation secured consumer protections for a combined loyalty program and essential air services. Both Alaska and Hawaiian Airlines have agreed not to devalue rewards programs as the merger moves forward. Members of the loyalty programs will be able to transfer miles at a 1:1 ratio before the launch of a combined frequent flyer program. The airlines are also required to match and maintain equivalent status levels for their loyalty program members and cannot impose new fees for rewards tickets. Additionally, the carriers must preserve essential air services in Hawaii’s small, rural communities.
The merger of Alaska and Hawaiian Airlines cleared the Justice Department’s review last month. Alaska Airlines anticipates finalizing the merger with Hawaiian Airlines on September 18, according to a regulatory filing made after the DOT’s announcement. This merger marks the first time the Department of Transportation has secured “binding, enforceable protections” as a precondition to a merger. These protections ensure that travelers’ frequent flyer miles, status, and benefits will be maintained.
The Skift Travel 200 includes an index of airline sector stocks within the ST200, which tracks the financial performance of nearly 200 travel companies globally. This index encompasses network carriers, low-cost carriers, and related companies. The performance of the airlines sector stock index year-to-date reflects the overall financial performance of these companies. Investors can use this information to track the financial health and performance of the airline sector as a whole.
Overall, the approval of the merger between Alaska and Hawaiian Airlines by the Department of Transportation marks a significant milestone for the two carriers. With consumer protections in place, the airlines can proceed with their merger plans, including combining their loyalty programs and maintaining essential air services. This merger is expected to benefit travelers with a seamless loyalty program experience and continued access to critical air services in Hawaii’s communities. Investors can monitor the performance of the airlines sector stock index to gauge the financial health of the industry as a whole.
