Does US Government Allowing Alaska-Hawaiian Airlines Merger Set a Bad Precedent?

27.08.2024 - 21:50 / travelpulse.com / North America / Hawaiian Airlines / Rich Thomaselli

Alaska Airlines cleared a major hurdle this week with the Department of Justice and its intended merger with Hawaiian Airlines. Getting regulatory approval from the DOJ is a huge step.

The merger now requires approval from the U.S. Department of Transportation. Please don’t mistake my genuine joy over this with cynicism. But I do have one question.

Why? Why was this combination allowed to move forward while the proposed merger between JetBlue Airways and Spirit Airlines was blocked?

"The time period for the U.S. Department of Justice (DOJ) to complete its regulatory investigation of the proposed combination of Alaska Airlines and Hawaiian Airlines under the HSR Act has expired," Alaska said in a statement. "This is a significant milestone in the process to join our airlines."

The statement from Alaska Airlines continued:

"During the DOJ’s review, Alaska worked closely with the Hawaii Attorney General to reinforce and expand upon our commitments for the future of Hawaiian Airlines and to Hawaii consumers. These include plans to maintain the Hawaiian Airlines brand and local jobs and continue providing strong service between, to, and from the Islands. The proposed combination remains subject to other customary closing conditions, including approval from the U.S. Department of Transportation (DOT) of an interim exemption application. Following that step, we will complete work to close the transaction, and proceed with integrating the two companies, welcoming Hawaiian Airlines guests and employees into Alaska Air Group, and expanding benefits and choice for consumers throughout Hawai‘i, the Asia-Pacific region, continental United States and globally."

I have no doubt that the airlines will blend seamlessly. We are talking about two extraordinarily well-run companies here, but the nagging question still persists.

Why?

Why this one? Why this merger when, just eight months ago, the federal government went to court to block the proposed merger between JetBlue and Spirit? Legal aficionados, government officials and aviation experts will tell you that it all has to do with monopolies and competitiveness.

A JetBlue merger would prohibit customers from a competitive option in the marketplace. Alaska and Hawaiian have two different cultures and very few overlapping routes.

I get the logic; I might not like it, but I do understand it.

But by that same thinking, you’re saying that McDonald’s and Burger King could never merge, or Coke in Pepsi, because there would be little to no competition for consumers. You can’t tell a company how it should run its business. However, the Biden administration has already shown that it is very anti-business.

Frankly, it sets a bad precedent to approve one merger and deny another.

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