Alaska Airlines has sealed a deal to acquire its rival Hawaiian Airlines for a substantial $US1.9 billion ($A2.85 billion).
The acquisition, set at $US18 per share in cash (about $A27), is poised to shake-up the travel landscape with the deal seeing both companies become a “market leader” in the premium-travel Hawaii market.
According to CNBC, the two airlines will keep each carrier’s brand but operate under a single platform, combining into a 365-airplane fleet covering 138 destinations, including Australia.
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.
Alaska Airlines CEO, Ben Minicucci, expressed enthusiasm about the collaboration, stating, “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 travellers,” he said in a statement.
“We have a longstanding and deep respect for Hawaiian Airlines, for their role as a top employer in Hawai‘i, and for how their brand and people carry the warm culture of aloha around the globe.”
Both airlines anticipate increased connectivity across their networks, offering services to 138 destinations, including non-stop flights to 29 top international destinations in the Americas, Asia, Australia and the South Pacific. Additionally, the partnership will grant access to more than 1200 destinations through the oneworld Alliance.
The new entity, based in Seattle under Mr Minicucci’s leadership, will designate Honolulu as a key hub for Alaska Airlines.
The move comes as Alaska Airlines aims to solidify its presence in the Pacific travel market.
Alaska Airlines is also in the process of completing its five-part path to net zero by 2040.
The acquisition follows Alaska Air’s October adjustment of its full-year profit outlook due to rising expenses attributed to increased fuel prices, reflecting the broader challenges faced by major US airlines.
—with New York Post