Alaska Airlines Group (ALK.US) announced on Wednesday that it had reached an agreement with the U.S. Department of Justice (DOJ) to extend the antitrust waiting period for its acquisition of Hawaiian Holdings Corp. (HA.US) by one day to 8:00 p.m. Eastern Time on August 16, 2023. The $1.9 billion acquisition, which has been closely watched by the industry since its announcement, is the largest in the airline’s history.
Alaska Airlines, based in Seattle, and Hawaiian Holdings disclosed the extension in a joint filing. On August 12, U.S. District Judge for the District of Hawaii Derrick K. Watson dismissed a lawsuit against the acquisition, finding that the plaintiffs lacked standing to bring the suit. The judge said the plaintiffs failed to show that the merger would cause them harm.
The suit, which was originally filed by some airline passengers and former travel agents on April 15, 2024, alleged that the merger would result in a series of negative consequences, including layoffs, reduced service, fewer choices for consumers, fewer flights and higher fares. The plaintiffs also argued that if the acquisition were to go through, Alaska Airlines would have more than 40% of the market share on Hawaiian Holdings’ routes to the mainland, making it a market leader, and would control 67% of the market share on inter-island flights and the 10 international destinations that Hawaiian Holdings operates.
Despite the dismissal of the suit, Joseph Alioto, an attorney for the plaintiffs, said they planned to appeal the case to a higher court.
Alaska Airlines has been working with the U.S. Department of Justice on the acquisition since it announced its intentions in December 2023. In July 2024, the two companies agreed to extend the waiting period from August 5 to August 15.
In the backdrop of a global shortage of new aircraft, airlines are increasingly looking to mergers to expand their capacity and market share. The acquisition would give Alaska Airlines a commanding position in the market for flights to the world-renowned Hawaiian vacation destination.
However, such mergers often face scrutiny from regulators. Earlier this year, a federal judge blocked Jetblue’s $3.8 billion acquisition of Spirit Airlines, showing the regulators’ cautious approach to airline mergers.
As of the time of publication, Alaska Airlines was trading up more than 1% at $35.90, while Hawaiian Holdings was up nearly 5% at $14.75.