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
Elim resident dies, child injured in snowmachine collision
A 55-year-old Elim resident died in a snowmachine collision Friday night, Alaska State Troopers said.
The accident, which occurred in the Norton Sound village of fewer than 400 residents, was reported to the agency just before 11 p.m. Friday, troopers said in an online statement. The report indicated that Anna Aukon “was riding in a sled down a road when she was struck by a snowmachine also traveling on the road,” troopers said. Life-saving measures were administered but were unsuccessful, according to troopers.
A young child also sustained injuries in the collision and was medevaced from Elim, troopers said.
Aukon’s next of kin was at the scene, according to troopers, and her body was being taken to the State Medical Examiner Office.
Nome troopers responded to Elim on Saturday to investigate the collision, the agency said.
Alaska
Opinion: Alaska must speak with one voice about the future of a natural gas pipeline
“North to the Future” wasn’t just a motto in my family. It was a lived experience.
My grandfather came to Alaska in 1948 as a Local 302 heavy equipment operator. He helped build roads and airports across this state and ultimately worked on the trans-Alaska pipeline. He came north because Alaska was rising.
Back then, the spirit of this state was dynamic and confident. When opportunity appeared, we seized it. We were growing. Our infrastructure expanded and our young people stayed. Alaska believed in its future.
Today, Washington, D.C., and Wall Street are watching us again. They’re not just studying engineering plans for the Alaska LNG project. They’re listening for something deeper: Does Alaska still believe in itself? Does Alaska truly want this project?
If our message is confused, if we hedge, undercut or politicize this moment, the answer they will hear is “no.” And once that perception hardens, capital and federal focus will move elsewhere.
Energy security is not optional. Southcentral utilities have made it clear that we lack sufficient long-term, firm gas commitments beyond the near horizon. Without a durable solution, Alaska, sitting atop one of the largest untapped gas resources in North America, could soon be importing natural gas to heat homes and power businesses.
Importing energy in a resource-rich state is not resilience. It is vulnerability. Renewables absolutely have a role in Alaska’s future. So does hydro. So does coal. Alaska should be all-in on energy. We are one of the most resource-endowed places on Earth. There is no reason to think small.
Exporting North Slope gas does not displace our need to develop in-state hydro, responsible coal, wind, solar and emerging technologies. It complements them.
Let’s export the gas the world needs and reserve the gas Alaskans require for reliability.
And let’s continue diversifying our in-state portfolio to power industry and strengthen resilience. Energy abundance is not a contradiction. It is a strategy.
AKLNG is not simply an export project. It is an energy security project for Alaska and a strategic energy project for America. The economic upside is significant. The Alaska Gasline Development Corp. projects that AKLNG could generate roughly $600 million per year in total state revenues once operational — royalties, production taxes and related activity. That is a baseline estimate. If Alaska participates as a co-investor, long-term revenue potential increases substantially.
Talk about a revenue generator. At a time when policymakers debate new taxes on industry and even on individual Alaskans just to balance the books, we are staring at a project capable of producing hundreds of millions annually while strengthening energy security. That should be a no-brainer.
Meanwhile, our oil and gas industry is doing extraordinary work revitalizing North Slope production. Projects like Willow and Pikka are restoring throughput and revenue. The private sector is demonstrating confidence in Alaska’s future. The question is whether we will match that confidence.
For too long, we have allowed doubt and policy paralysis to define the conversation. We debate. We delay. We send mixed signals. Investors can model engineering risk and regulatory timelines. What they cannot model is political incoherence.
From the perspective of Washington and Wall Street, confusing or contradictory signals from Alaska’s elected leadership are more destabilizing than permitting hurdles. No financier commits billions into a jurisdiction that sounds ambivalent. No federal partner prioritizes a state that publicly undercuts itself.
We built the trans-Alaska pipeline because we believed in Alaska’s future more than we feared obstacles. That generation understood something simple: When opportunity arrives, you seize it. AKLNG is such a moment. The gas is here. The markets are real. Federal alignment is strong. Our broader energy portfolio is vast. Our workforce is capable.
Alaska has always been a powerhouse of people and resources. If we want energy security, we must say so clearly. If we want diversified energy, we must pursue it boldly. If we want growth, we must demonstrate confidence. Washington is listening. Wall Street is listening. The next generation is listening.
Let’s show them that Alaska still knows how to seize the moment — and rise.
Rep. Chuck Kopp currently serves as the Majority Leader in the Alaska House of Representatives and represents District 10.
• • •
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Alaska
Editorial: Decision time in Juneau: Discipline or make it rain?
Alaska has seen this movie before: oil prices spike, politicians celebrate and Juneau starts figuring out how fast it can spend the money.
The U.S. attack on Iran has pushed global oil prices higher, rattling energy markets and sending crude prices upward as supply fears ripple through the global economy. Energy markets surged as tanker disruptions and facility shutdowns across the Middle East threatened supply — a reminder that geopolitical shocks can move oil prices overnight.
For Alaska, that means something very specific: more money. But before Gov. Dunleavy and the Alaska Legislature start eyeing a fresh pile of cash like kids staring at a cookie jar, let’s get something straight. This is not prosperity. This is a temporary windfall driven by war.
And if the past is any guide, Juneau has a good chance to screw it up.
[Related news coverage: Spike in oil prices will boost Alaska revenue, but not enough to cover projected deficit]
Oil prices jumped sharply after the U.S. and Israel attacked Iran on Feb. 28, and analysts say prices could climb even higher if the conflict drags on. Some forecasts suggest oil could exceed $100 per barrel, which could mean roughly $1.5 billion more in revenue for Alaska in the coming year, according to reporting by the Juneau Empire.
That kind of money would erase much of the state’s budget deficit and could even fund a dividend north of $3,000.
Cue the political stampede.
In an election year especially, there will be lawmakers eager to promise giant Permanent Fund dividends fueled by this sudden surge in oil revenue. Expect campaign ads. Expect grandstanding. Expect speeches about “returning the wealth to the people.” And even before the attack on Iran, Gov. Dunleavy was already pushing an unsustainable full dividend for each Alaskan.
It’s a stupid idea — not because Alaskans don’t deserve dividends but because temporary revenue should never be used to make permanent promises. War-driven oil money is the worst possible revenue on which to build promises.
Alaska should know better by now
Alaska’s finances remain wildly exposed to oil price swings. A single dollar change in oil prices can move the state budget by roughly $25 million to $35 million, according to Alaska Public Media.
That volatility is exactly why treating a war-driven price spike as stable revenue is fiscal stupidity.
Even lawmakers watching the markets closely say the state should not assume the spike will last. As legislative leaders told Alaska Public Media, Alaska cannot build its spending plans around overly optimistic oil prices. Yet history tells us that when oil money shows up unexpectedly, discipline in Juneau disappears faster than reindeer sausage at the Tanana Valley State Fair.
The last time a global conflict sent prices soaring was after Russia invaded Ukraine in 2022. Oil shot above $100 a barrel for months. What did Alaska do? The Legislature and governor approved a massive dividend and energy payments totaling more than $2 billion. The state spent the money almost as fast as it arrived — don’t we wish we had those billions today?
Like any temporary high, it felt good at the time, and politically, it was wildly popular. It also did absolutely nothing to solve Alaska’s long-term fiscal problems.
The temptation is coming
The state’s spring revenue forecast arrives in about two weeks. If oil prices remain elevated, the numbers will suddenly look far healthier than they did a month ago.
That’s when it gets tempting. Lawmakers will start talking about “surplus revenue.” Candidates for public office will promise bigger dividends. The governor’s allies will argue the state can suddenly afford everything. Don’t fall for it.
As longtime Alaska fiscal analyst Larry Persily recently wrote in the Alaska Beacon, rising oil prices quickly create a long list of spending ideas in Juneau. But the real question isn’t how much money might arrive — it’s how long it will last. And nobody knows the answer to that. War-driven oil spikes can disappear just as quickly as they arrive.
If Alaska receives a revenue windfall from this conflict, the state should treat it for what it is: a one-time shot in the arm.
That means save it, invest it and strengthen the state’s fiscal stability.
Deposits into reserves like the Constitutional Budget Reserve — or even better, the Permanent Fund — would help rebuild the savings Alaska burned through during the last decade of deficits. Strategic investments in infrastructure, education and economic development would strengthen the state long after oil prices fall again.
What Alaska should not do is hand the entire windfall to voters as a massive dividend. That’s not fiscal policy. That’s a sugar rush.
A simple message for Juneau
There is nothing wrong with Alaskans benefiting when oil prices rise. Oil built this state, and its revenues still help pay for essential services. But relying on war-driven price spikes to fund giant dividends is reckless.
This moment will test the discipline of Alaska’s leaders. The attack on Iran may deliver Alaska a sudden burst of revenue. But the state’s long-term problems — structural deficits, unstable revenue and growing needs — will still be there long after oil prices settle down.
So here’s the message the governor and the Legislature need to hear: If this windfall arrives, don’t blow it the way you did last time.
Save it. Invest it. And for once, resist the urge to torch the cash in the middle of an election year.
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