Hawaiian Airlines' Merger: Cost Cuts, Layoffs, and the Path to Operational Efficiency

The merger of Hawaiian Airlines with Alaska Airlines—finalized in September 2024 for $1.9 billion—has triggered a series of layoffs and strategic restructurings aimed at boosting operational efficiency. While the integration has already led to the elimination of 252 noncontract jobs in Honolulu as of early 2025, the moves have not come without controversy. Yet, beneath the headlines of workforce reductions lies a deliberate strategy to streamline costs, preserve core operations, and position the combined airline for long-term profitability. Here's how the cuts and hires align with that vision.

The Layoff Strategy: Precision Over Blanket Reductions

Hawaiian's layoffs have been incremental, with rounds announced via WARN notices in January and October 2024, followed by further cuts in 2025. Notably, the airline has prioritized noncontract roles—such as administrative and support staff—while protecting unionized positions like pilots, flight attendants, and mechanics. Since the merger, union jobs have grown from ~5,000 to over 5,600, with 522 added in 2025 alone. This approach suggests a focus on retaining frontline employees critical to daily operations, even as back-office roles face consolidation.

The airline's retention efforts for displaced workers also hint at a nuanced strategy: 30% of laid-off employees in recent rounds secured new roles within the company. Severance packages, retention bonuses, and job placement services further mitigate backlash, signaling an emphasis on maintaining goodwill among the workforce.

This comparison could reveal whether investors view the merger as a net positive or if concerns about layoffs and integration risks are weighing on valuation.

Operational Synergies: A Gradual Integration

The merger's operational benefits are still unfolding. Hawaiian and Alaska will retain separate brands, websites, and loyalty programs (HawaiianMiles and Alaska's Mileage Plan) until at least mid-2025, with a unified program planned later. This phased approach minimizes disruption for customers and employees, allowing the airlines to align systems gradually.

Crucially, the FAA's approval of a single operating certificate—a milestone expected by early 2026—will enable seamless flight scheduling and resource sharing. Once achieved, Hawaiian could reduce redundancies in areas like maintenance, IT, and route planning, unlocking cost savings that directly boost margins.

Meanwhile, immediate benefits include expanded global access for Hawaiian passengers (now covering 141 destinations) and the ability to transfer miles between programs at a 1:1 ratio. The Huaka'i by Hawaiian program, targeting Hawaii residents, further underscores Hawaiian's focus on retaining local loyalty while leveraging Alaska's broader network.

Workforce Stability: A Delicate Balance

While noncontract roles are shrinking, Hawaiian is aggressively hiring for core operational positions. Over 7,000 of the combined airline's 28,000 employees are based in Hawaii, and 2025 hiring plans include hundreds of roles for pilots, flight attendants, mechanics, and airport staff. This hiring surge, paired with union job growth, suggests the airline is prioritizing capacity to meet demand—especially as tourism to Hawaii rebounds post-pandemic.

The retention of unionized workers also reflects Hawaiian's recognition of labor's role in service quality. A satisfied workforce is critical for maintaining the premium experience that defines Hawaiian's brand, which caters to high-margin travelers.

Risks and Opportunities for Investors

The merger's success hinges on FAA approval and smooth integration of systems. Delays in obtaining the single operating certificate or disputes over union contracts could disrupt the timeline for cost savings. Additionally, Hawaiian's reliance on Hawaii's tourism economy leaves it vulnerable to macroeconomic downturns or geopolitical instability.

However, the stock's performance to date——may indicate investor confidence in its long-term prospects. A lower P/E relative to peers could signal undervaluation, though risks like labor disputes or integration hiccups must be monitored.

Final Analysis: A Strategic Play for Efficiency

Hawaiian's layoffs are not a sign of weakness but a calculated move to eliminate redundancies while safeguarding revenue-generating roles. By protecting union jobs and investing in core operations, the airline is positioning itself to capitalize on synergies once full integration occurs. The merger's benefits—expanded routes, shared resources, and a unified loyalty program—could finally give Hawaiian the scale to compete with global carriers.

For investors, Hawaiian presents a speculative opportunity. The stock's valuation suggests room for upside if integration proceeds smoothly, but patience is required. Monitor the FAA's timeline and labor relations closely; if Hawaiian can deliver on its synergies without sacrificing service quality, this could be a turning point for profitability in the Aloha State's skies.