Alaska-Hawaiian merger could hit new delay after major airline expresses concerns to feds

HONOLULU (HawaiiNewsNow) – One of the nation’s largest airlines is raising concerns to the federal government about the planned merger between Hawaiian and Alaska Airlines.

It’s a setback in the nearly nine-month process that seemed close to being finalized. Some experts say it will likely only delay the $1.9 billion deal.

United Airlines does a lot of business in Hawaii, devoting some of its fleet’s largest and most expensive planes to the islands. It’s concerned about what a merger will mean about its existing agreements with Hawaiian Airlines.

According to United, its costumers can gain reward miles even when they fly inter-island on Hawaiian.

Its website also sells flights to and from the continental U.S. that use connecting flights “Operated by Hawaiian Airlines.”

“What it means is that their airline can sell some tickets on that airplane, and both companies make some profit on that arrangement,” said Hawaii Aviation Expert Peter Forman.

“It is a lucrative type of agreement between airlines.”

A letter from United to the DOT expressed concerns about the impact of the merger on these existing agreements.

Patrick McNamee, who flew for United and Continental for 37 years, said the concerns about business impact make sense given that the airline has a long history operating in the state.

“I started working for them back in 1987 here in Hawaii. The biggest carriers were United, Northwest and Continental,” said McNamee.

McNamee believes that other airlines operating in Hawaii will also write letters of concern.

“United shot the first bullet across the bow. Trust me, Southwest is going to be there by tomorrow,” added McNamee.

The merger has strong support from state officials, including Hawaii’s Gov., Attorney General, and lieutenant governor.

The governor wrote to the DOT saying in part,

“By the joining of these two airlines, a stronger company will emerge with Hawaiian Airlines costumers benefiting from being a part of a larger carrier with more resources, increased options for residents, and enhanced competition.”

The governor noted that even with a merger, Alaska and Hawaiian would still be “a distant 5th in size” among airlines.

Forman believes the merger will still be approved, but it will likely be delayed as the DOT works to address concerns.

“It’s not a showstopper at all because worse case situation, the DOT says Hawaiian you got to keep these agreements open to United,” said Forman.

That’s in part because the proposed merger cleared a major hurdle when the Department of Justice issued no objections to it.

There is no timeline for when the DOT will be done with its final review.

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