Alaska Airlines announced that the plan to amass Hawaiian Airlines has received approval from the U.S. Department of Justice after the deadline for antitrust regulators to research the deal passed with no lawsuit being filed to dam the transaction – eight months after the 2 airlines announced a merger agreement valued at $1.9 billion.
Before the deal could be finalized, the 2 airlines must obtain approval from the US Department of Transportation. How long this process will take was initially unclear.
According to Mergermarket, this could be the biggest merger of US airlines for the reason that merger of Alaska and Virgin America in 2016.
“The period inside which the U.S. Department of Justice will conduct its regulatory investigation into the proposed merger of Alaska Airlines and Hawaiian Airlines under the [Hart-Scott-Rodino Antitrust Improvements] Act has expired,” Alaska Airlines said in a statement. “This is a big milestone within the technique of joining our airlines.”
The development comes after the Justice Department obtained a court ruling in January that JetBlue Airways' Acquisition of Spirit AirlinesLast year, the Justice Department won another case involving a partnership in the Northeast between JetBlue and American Airlines.
Hawaiian faced numerous challenges in the months leading up to the deal, which the two airlines announced last December, including the Maui wildfires, increasing competition from Southwest Airlines and the slower recovery of travel to and from Asia following the Covid-19 pandemic.
Hawaiian has posted net losses in all but one quarter since the start of 2020, but executives recently said booking trends are improving. Hawaiian shares rose more than 11% on Tuesday following Alaska's announcement. The stock has nearly doubled in value over the past year, while its competitors' shares have fallen.
When announcing the deal in December, the two airlines said they would retain their respective brands but operate under a single platform. Together they would have a fleet of more than 360 aircraft flying to over 130 destinations.
The Ministry of Transport announced on Tuesday that it was “examining the applying and might only conform to a relocation whether it is in the general public interest”.
The Justice Department did not initially comment.
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