Alaska
Hawaiian, Alaska leaders tout airline deal
The top executives of Hawaiian and Alaska airlines said their companies are moving forward on an upcoming merger that they characterized as pro-consumer and pro-competitive because it allows them to compete more effectively in an industry dominated by larger
carriers Delta, United, American and Southwest, which together make up 80% of the U.S. market.
Peter Ingram, Hawaiian
Airlines president and CEO, and Ben Minicucci, Alaska Airlines president and CEO, made their remarks Thursday during a “fireside chat” at a “Hawaiian Airlines Business Luncheon” at the Hilton Hawaiian Village Waikiki Beach Resort. During the event, which was hosted by the Chamber of Commerce Hawaii, the airline leaders discussed the effect on Hawaii’s economy, business community and residents if Alaska Airlines is approved to buy Hawaiian for $1.9 billion.
Minicucci pledged to keep serving POG (passion orange guava drink) and indicated that he understands the importance of keeping robust and affordable neighbor island flights. He reiterated that union jobs are protected, and said when it comes to decisions about nonunion jobs and other integrations that Alaska Airlines planned to take time
to understand the needs. Alaska announced it was establishing a 16-member Hawai‘i Community Advisory Board, or HICAB, to honor the legacy and significance of the Hawaiian Airlines brand as the airlines work toward combining as well as to reinforce Alaska Airlines’ expanded role in Hawaii.
“Honolulu will become our second-largest base in our system, and it will be a big, big operation. We are going to need everything that’s required here today. Our intention is to grow this pie, not to keep it the same,” Minicucci said.
The boards of both airlines approved the deal Dec. 2,
but there are still a lot of unknowns, and more hurdles to go. The process is expected to take 12 to 18 months.
To move forward, the deal still must be approved by Hawaiian shareholders, as well as competition authorities, including the U.S. Department of Justice and state attorneys general — and that’s not always a slam dunk.
A special meeting has been called for Feb. 16 so that Hawaiian’s shareholders, who are required to give concurrence, can vote on the merger/acquisition of Hawaiian Airlines.
Hawaiian Airlines
spokesperson Alex Da Silva said in an email to the Honolulu Star-Advertiser after Thursday’s fireside chat that “approval of our combination with Alaska by our shareholders is a required step for us to proceed with the transaction. More information is available in our public regulatory filings. As for other steps, we will continue to share information via our public filings and with the regulatory authorities in the weeks and months ahead.”
So far, the timeline hasn’t been thrown off by a lawsuit filed Jan. 10 by Deann Owen in the U.S. District Court of the Southern District of New York against Hawaiian Holdings Inc., parent company of Hawaiian Airlines, and the company’s board of directors. The case alleges violations of the Securities and Exchange Act of 1934 related to the defendants’ efforts to sell the company to Alaska Air Group Inc. through merger vehicle Marlin Acquisition Corp. Owen’s suit, which demands a jury trial, claims the sale process is unfair and would result in irreparable injury, and thus seeks to enjoin an upcoming stockholder vote on the proposed transaction.
Among Owen’s claims is that “the definitive proxy statement fails to adequately disclose why the company board was willing to settle on a purchase price of $18 per share of company common stock after the initial offering was at a purchase price of $20 per share of company common stock.”
Another claim is that the definitive proxy statement “fails to adequately disclose why no market check was conducted for other possible strategic alternatives, including the possibility of an investment by a potential equity partner.”
Owen’s suit also alleges that Hawaiian insiders are the primary beneficiaries of the proposed transaction, not the company’s public stockholders such as herself. Moreover, she claims that the board and the company’s executive officers “are conflicted because they will have secured unique benefits for themselves from the proposed transaction not available to plaintiff as a public stockholder of Hawaiian.”
Some industry analysts also have speculated that Hawaiian could face headwinds during the regulatory process given that JetBlue and Spirit Airlines just asked an appeals court to fast-track review of a federal judge’s decision to block JetBlue’s proposed $3.8 billion purchase of Spirit.
U.S. District Judge William Young on Jan. 16 blocked JetBlue’s purchase of Spirit Airlines after the Justice Department filed a suit saying the purchase would drive up fares by eliminating Spirit, the nation’s biggest low-cost airline.
Young said the government had proved that the merger “would substantially lessen competition” and
violated a century-old antitrust law.
Hawaiian and Alaska officially have filed with the U.S. Justice Department for antitrust clearance, and both
Ingram and Minicucci maintain that their situation is vastly different from that of JetBlue and Spirit. They said their deal doesn’t involve a low-cost carrier; their operations have little overlap; and customers will benefit from expanded travel options and services.
“We feel strongly as we go through the process that our merger will prevail,” Minicucci said.
There’s potentially a lot riding on the merger, given Hawaiian’s financial challenges of the past several years. The deal that is
moving forward with Alaska includes $900 million in
Hawaiian debt.
Hawaiian reported Tuesday a fourth-quarter loss of $101.2 million, or $1.96 per share. When adjusted for nonrecurring costs, the loss came to $2.37 per share.
The adjusted results missed Wall Street expectations. Three analysts surveyed by Zacks Investment Research had estimated an average loss of $2.35 per share per adjusted share.
Hawaiian posted revenue of $669.1 million in the period, which also fell short
of Wall Street expectations, which were estimated at an average of $669.2 million by the three analysts surveyed by Zacks Investment
Research.
The airline ended the year with revenue of $2.72 billion and a loss of $260.5 million, or $5.05 per share.
While Hawaiian has said its balance sheet is strong, the airline’s debt situation has left some speculating that if the merger with Alaska doesn’t work out,
Hawaiian could face a third bankruptcy. However, Ingram indicated during the fireside chat that Hawaiian had not been actively searching for a buyer before entering into negotiations with Alaska.
“Hawaiian wasn’t shopping itself last year. We weren’t standing on the side with a big for-sale sign,” he said. “We were working on our own plan as an independent airline. We have a lot
of confidence in that. I’ll acknowledge the last few years have been very challenging starting with the pandemic, including the slow return of Japanese visitors, which is gradually improving over the course of 2023.”
Ingram said up until the deal was struck, “Plan A” was to “operate as a carrier with our stand-alone plan. We continue to compete aggressively as we complete our recovery from the challenges of the last couple of years.”
Ingram said “Plan B” was getting the deal agreed on with Alaska.
“To me all that changed
after we made the announcement is ‘Plan B’ is now ‘Plan A.’” he said. “We’ve agreed that this is the plan going forward. We think it is a better outcome for our company. It’s a better outcome for our employees. It’s a
better outcome for our shareholders. It’s good for consumers. But if for some reason we had to go back to the other plan, we are completely confident in our ability to execute that as well.”
Da Silva said in an email to the Star-Advertiser that Hawaiian in 2024 will continue “strengthening our business and enhancing the guest experience with better technology, exciting products including complimentary Starlink WIFI, a new flagship aircraft in our 787-9, and the continued expansion of our network.”
———
The Associated Press
contributed to this report.
Alaska
New Partnerships With State of Alaska & University of Alaska Fairbanks Expand on Critical Minerals & Energy Innovation – CleanTechnica
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NLR Laboratory Director Jud Virden Signs Partnership Agreements at Alaska Sustainable Energy Conference in Anchorage
The National Laboratory of the Rockies (NLR) signed two new memorandums of understanding (MOUs) on May 19 that aim to increase research and innovation in critical minerals, energy, and buildings in Alaska and the Arctic. These partnerships build on longstanding collaborations and are designed to tap into Alaska’s resources in a way that benefits both the state and the nation.
“Alaska faces unique challenges,” NLR Director Jud Virden said. “NLR is proud to partner with the state and its flagship university to develop and accelerate innovative solutions to Alaskan challenges and address our nation’s pressing needs in critical minerals, energy, and buildings.”
At the Alaska Sustainable Energy Conference, joined by U.S. Department of Energy (DOE) Assistant Secretary Audrey Robertson, Alaska’s governor Mike Dunleavy, and University of Alaska Fairbanks (UAF) leadership, Virden signed agreements that will make it easier for NLR to work with these key partners to scale solutions for the real world.
NLR is the only DOE national laboratory with a physical presence in Alaska, located adjacent to the University of Alaska Fairbanks campus. NLR’s Alaska research focuses on energy and building technologies in extreme climates and remote locations, as well as support for military, government, and communities in decreasing energy costs and improving reliability. Recent projects include an analysis of the state’s power grid to address declining natural gas supply within Alaska, an evaluation of methods to stabilize permafrost on military sites, and support for designing a secure, resilient facility on the Alaska-Canada border.
Through the MOU with the university, NLR gains access to UAF expertise in microgrids, engineering, and critical minerals—such as the Alaska Critical Minerals Collaborative, a research unit at UAF connecting government, industry, and researchers to advance critical mineral development across Alaska. The laboratory may also host students and fellows from UAF’s College of Engineering and School of Mines, Arctic engineering, geosciences, and other relevant programs, offering a training ground for the critical mineral workforce of the future.
On the flip side, NLR can provide access to advanced analysis tools, such as the ability to create digital twins of mines and microgrids with its Advanced Research on Integrated Energy Systems (ARIES) platform, and a wide range of capabilities in its new Energy Materials and Processing at Scale (EMAPS) facility that offers partners an entirely new model for “market-first” research: the ability to grow laboratory-scale innovations into scalable and validated market-relevant prototypes under a single roof.
“This partnership leverages the unique strengths of each of our organizations to create something that is greater than the sum of two parts,” UAF Interim Chancellor Mike Sfraga said.
NLR’s agreement with the state is complementary in approach, paving the way for NLR and the state to coordinate resources, share research, and boost Alaska energy and critical mineral production.
“This agreement helps turn Alaska’s resources and know-how into practical solutions,” Gov. Dunleavy said. “By formally partnering with federal researchers who are already based in Alaska, we can lower energy costs, build infrastructure that works in Arctic conditions, strengthen domestic supply chains, and create good-paying jobs, especially in rural and remote communities. It puts Alaska at the center of solutions that matter to both our state and the nation.”
Learn more about NLR critical minerals research and collaborations.
By Molly Rettig, NLR
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Alaska
Natural gas supplies ‘not looking good’ for Southcentral Alaska this winter, Enstar says
Southcentral Alaska’s largest natural gas utility said Tuesday it might not have the gas to make it through this winter. That’s after state regulators last Wednesday denied Enstar’s request that would’ve expanded natural gas storage in Kenai, as the region faces a looming natural gas shortage.
Enstar president John Sims said it’s “not looking good” for the utility’s more than 150,000 Southcentral customers heading into the cold, winter months.
“Just to be very blunt, we need additional production in order to make it through this winter,” Sims said. “We are kind of turning over every stone possible and trying to find more gas resources.”
In the order, the Regulatory Commission of Alaska wrote they were “unsure about the timing of the need for additional natural gas storage capacity, including insertion and withdrawal capacity.”
Enstar proposed developing and operating a depleted reservoir known as the Kenai Loop Pool that is currently leased and operated by AIX Energy, LLC., to store gas to use during the colder months.
The utility was seeking an “advanced determination” from RCA that it was prudent, which would allow the project to unlock financing for development, the order says. In its original filing, Enstar said that the project would help ensure there are enough supplies to meet the needs of its customers.
A search for other options
The commission denied the utility’s request in a 17-page order last Wednesday, saying the Department of Natural Resources hadn’t determined if the facility was capable of serving as a gas storage facility. Hilcorp has a competing application for the same storage facility, the order said.
The RCA didn’t respond to a request for comment Tuesday afternoon.
The facility would hold 25 billion cubic feet of gas, which Sims said is appropriately sized for the current supply needs and future natural gas imports.
“The other benefit of having this storage facility right now is we can go to Furie, AIX, to all the small producers and even Hilcorp and say, ‘Hey, whatever volume of gas you produce, I can buy it.’ And I can store that into this storage facility for later use,” he said.
Longer term, utilities are looking to import natural gas, which would impose an unavoidable price increase to thousands of households and businesses. Legislators are currently in negotiations over a multibillion-dollar property tax break for the developer of the Alaska LNG project, Glenfarne. But it’s unknown if, or when, that project will be built.
According to the order, Enstar’s Kenai storage project garnered support from DNR, multiple state legislators and other regional electric utilities. However, some Anchorage-based property management companies said it was “inappropriate” for ratepayers to bear the cost of the project. The project’s $240 million price tag would’ve increased bills for customers by $10 to $12 per month, according to the filing.
Sims said Enstar is filing a petition for the reconsideration of the ruling next week.
“Just in case the commission denies that request, yes, we are looking at other storage options,” he said. “Unfortunately, based on our analysis that we did before we filed with the commission, those options appear to be more expensive.”
Sims said he’s hoping production and storage ramps up, but if it doesn’t, he said the utility may need to ask customers this winter to conserve supplies by lowering their thermostats.
___
This story was originally published by Alaska Public Media and distributed through a partnership with The Associated Press.
Alaska
ICE: Alaska state attorney arrested by immigration officials, held in Tacoma detention center
ANCHORAGE, Alaska (KTUU) – U.S. Immigration and Customs Enforcement arrested Shucheng “Charlie” Yang, 32, a Chinese national and attorney with the Alaska Department of Law, on July 10 in Anchorage, according to an ICE spokesperson.
ICE said Yang violated the terms of his admission and is a “deportable alien.”
He is currently being held at the Northwest ICE Processing Center in Tacoma, Washington, pending immigration proceedings.
Yang pled no contest to a speeding ticket he was cited for on May 22. There are no other charges against him listed in the Alaska court system.
Yang is the most recent person in Alaska to be taken into ICE custody at the Tacoma processing center; a Mexican woman living in Soldotna was deported along with her three children in February.
His arrest also comes days after a Colombian man was shot and killed by a federal immigration officer earlier this week in Maine, fueling a new wave of protests against perceived ICE brutality.
State outlines hiring process
The Alaska Department of Administration responded to general questions about verifying employment eligibility for all full-time hires and said the state requires applicants to self-disclose their employment eligibility during the application process.
“The State of Alaska hires individuals who have the legal right to work in the United States,” Policy Advisor Kate Sheehan said. “This employment eligibility is confirmed through the federally mandated I-9 verification process.”
Yang is listed as Department of Law civil attorney on the State of Alaska employee directory.
Agencies decline to comment on Yang
Both the Alaska Department of Law and the Office of Gov. Mike Dunleavy declined to address Yang’s employment status or arrest.
“As a practice, the Department of Law does not provide comments on personnel issues,” Information Officer Sam Curtis said.
“We do not comment on personnel issues,” Deputy Press Secretary Grant Robinson said.
Alaska’s News Source is reaching out to Yang through multiple channels while he remains detained in Tacoma.
See a spelling or grammar error? Report it to web@ktuu.com
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