Alaska Airlines expects to finalize its $1.9 billion merger with Hawaiian Airlines on Wednesday after the Department of Transportation cleared the transaction, the company said in a regulatory filing Tuesday.
DOT approval was the remaining hurdle for the merger. The Department of Justice last month quietly approved the transaction.
The combination of Alaska Airlines (NYSE: ALK) and Hawaiian Airlines (NASDAQ: HA) is important from a freight perspective because Alaska will take over cargo transportation for e-commerce giant Amazon. Hawaiian Airlines is operating a handful of Airbus A330 converted freighters for Amazon’s air logistics network and expects to have 10 cargo jets by next year.
The companies have never indicated whether the Amazon transportation services agreement with Hawaiian will need to be modified. Hawaiian began operating its first freighter last October. Amazon has warrants to take a 15% equity stake in Hawaiian Airlines after nine years conditioned on meeting a spending threshold of $1.8 billion.
Alaska Airlines has long operated a small fleet of freighter aircraft, primarily between Alaska and Seattle. It currently has five converted freighters: three Boeing 737-700s and two 737-800s. Officials have previously said they anticipate savings from integrating the cargo operations from belly transport in passenger aircraft.
Alaska is the fifth-biggest airline in the U.S. and Hawaiian is No. 10. The combination will solidify Alaska’s position as a stronger No. 5, which is important for the carrier to remain competitive with major U.S. carriers American, Delta, United and Southwest.
The carriers will continue to operate as separate brands, and Alaska has committed to keep serving Hawaii. The deal will give Alaska the opportunity to take some of Hawaiian’s long-range Boeing 787s and Airbus A330s and run them out of Seattle to Asia and Europe, but the real impetus for the merger was beating back Southwest Airlines. Both airlines serve Hawaii but lost market share when Southwest began serving the state in 2019.
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