Alaska
Experts: Alaska buyout of Hawaiian Air was best possible outcome but questions remain
HONOLULU (HawaiiNewsNow) – The end of local ownership for Hawaiian Airlines continues to send shock waves across the state and airline industry, but many see the $2 billion buyout by Alaska Airlines as a chance to preserve the Hawaiian Air brand while perhaps improving service.
Meanwhile, there are still questions about what’s ahead for Hawaiian’s more than 7,000 employees — and an airline that has been part of Hawaii for generations.
U.S. Rep. Jill Tokuda’s rural and multi-island district depends on air service for everything from family reunions to access to health care, and she said her first reaction to the news was emotional.
“Honestly, when I got the call, I was sad,” she told Hawaii News Now.
But as federal regulators review the deal, Tokuda said she’d like to see jobs protected as well as promises to fly more often to less serviced places.
“Maintaining affordable, sustainable, consistent routes for our neighbor islands, especially for me increasing routes and back, this has to be additive, especially for Molokai and Lanai,” she said.
National travel analyst Henry Hartveldt said he doesn’t expect Alaska Air to reopen unprofitable routes — often to airports that don’t support jet aircraft.
“That’s just not how today’s modern airline will operate. It’s just not financially or operationally practical to do so,” he said. But Hartveldt says he believes the deal is good for Hawaiian.
For one, it provides a price per share of $18, more than $13 over the price on Friday.
Additionally, Alaska will assume nearly $1 billion of Hawaiian AIr’s debt and promised to protect union jobs. The airline also said that the Hawaiian Air brand will live on, primarily through a second hub for the airline at Honolulu’s Daniel K. Inouye International Airport.
“So from that standpoint, it shows me that this is being done because Alaska wants to win Hawaii, and they don’t want another suitor to come along and try to turn this into a bidding game,” he said.
Former Hawaii Tourism Authority CEO, state Sen. and business director Mike McCartney agreed it was a good fit and good timing.
“I think their route structures are complementary, their cultures are complementary. And I think it’s the best situation for Hawaii,” McCartney said.
That, despite McCartney spending much of his career helping Hawaiian stay afloat.
“Having a locally owned airline, is what we should have always and should always strive for. But the global economics in the way the airline industry is, it became impractical,” McCartney conceded.
CONTINUING COVERAGE:
But on Hawaii News Now Sunrise, the two airlines’ CEOs — Hawaiian’s Peter Ingram and Alaska’s Ben Minicucci — were clear that there are still many details to work out.
Although they repeatedly reassured union workers that their contracts and jobs are safe, asked about office workers, Ingram responded: “I think that’s something that ben and his team are going to have to look at over the next several months and its certainly one of the things that people are going to be concerned about.”
Minicucci said Hawaiian’s assets will give Alaska executives a lot to work with.
“Prior to the pandemic, the international network for Hawaiian was very strong, which was something that was very attractive,” he said.
“So we’re looking forward to seeing what more can we do, you know, on top of what’s already being done, you know. (Boeing) 787s are coming into the fleet, and we’ll have the possibility to grow here, as well as grow from West Coast hubs, as well. So yeah, it’s really exciting.”
For some of Hawaiian’s top executives the deal is worth a lot of money.
Security and Exchange Commission filings show CEO Peter Ingram has 340,964 shares of stock, which will rise by a value of about $4.5 million by the time the deal is approved by stockholders and the government. That’s expected to take a year to 18 months.
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