Alaska-Hawaiian merger will protect frequent flyer miles as part of major DOT agreement

17.09.2024 - 19:15 / thepointsguy.com / Pete Buttigieg

The Department of Transportation said on Tuesday that it had taken a major step towards approving the merger between Alaska Airlines and Hawaiian Airlines, effectively allowing the two airlines to close the deal.

As part of the step, the airlines and the DOT also locked in some major protections for frequent flyers sitting on big stashes of Alaska Mileage Plan or HawaiianMiles points.

The DOT said that it had approved the airlines' "exemption" request, which would allow the carriers to operate as two separate airlines under the same owner before combining operations. In other words, Alaska Airlines is clear to take ownership of Hawaiian in accordance with the airlines' merger agreement.

While that suggests that the merger is a done deal and will eventually be cleared in full, the DOT still must approve the airlines' "transfer request," which would allow them to operate as a merged airline under a single operating certificate. That approval remains subject to a variety of requirements, DOT officials said on Tuesday, and will depend on the FAA's review and signoff on safety and operational plans.

Approving the exemption request and allowing transactional part of the merger to close with the transfer request still outstanding allows the airlines a greater degree of regulatory certainty as they move forward with the operational aspects of the merger.

It's also an unusual step.

Before granting the approval, the DOT secured several commitments from the two airlines which Transportation Secretary Pete Buttigieg characterized as "preserving air service" and "better serving passengers." The commitments, accompanying DOT's approval, appeared to be unprecedented.

"This is the first time that the [DOT} has required airlines to agree to binding, enforceable protections as a precondition before we would consider allowing a merger to move forward," Buttigieg said during a press briefing Tuesday afternoon. "This new approach prioritizes the public interest from the outset."

Under the agreement, the two airlines must preserve all current Essential Air Service routes, along with current levels of service within the Hawaiian islands, and between Hawaii and the continental U.S. The carriers are also prohibited from taking any actions that would harm competition at Honolulu's Daniel K. Inouye International Airport (HNL).

On the "better serving passengers" side, the two airlines agreed to a variety of consumer commitments requested by DOT, the agency said. These include guaranteeing that families with children can sit together without added fees and promising compensation for certain delays and cancellations. The airlines also promised to lower costs for traveling military servicemembers.

The airlines also agreed that they