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How the impending U.S. government shutdown might impact Alaska



How the impending U.S. government shutdown might impact Alaska

As Congress barrels toward a government shutdown starting Sunday, a lapse in federal funding is poised to pause pay for thousands of federal workers in Alaska, while many government services could be hobbled.

If a shutdown happens, how long it will last and exactly how it will play out in Alaska is unclear.

Some federal agencies in Alaska, including those operating under the sprawling Interior Department, had not released specific plans as of Thursday.


But with just two days until government funding runs out, a fix appears less and less likely to arrive.

How will a shutdown affect Alaska’s federal employees?

Federally paid workers have a huge presence in Alaska, with its vast land ownership, 200-plus federally recognized tribes, and several military bases.

Alaska is home to 16,000 federal employees, state data shows. There are also 20,000 active-duty service members counted separately. Together, those workers represent a large portion of workers in the state

Many of those workers aren’t expected to be paid during a shutdown, though a 2019 law passed by Congress ensures they receive back pay when it’s over. Also, Alaska Republican Sen. Dan Sullivan is leading a bill to pay military personnel during the shutdown, but it was blocked Wednesday.

Oct. 13 will be the first day many federal workers miss paychecks, should the shutdown extend to that point.


Furloughed federal workers can sign up for unemployment compensation through the state, but they’re required to repay that money when they receive back pay, according to the Alaska Department of Labor and Workforce Development.

[Federal government starts notifying employees a shutdown may be imminent]

Federal employees who must continue working during the shutdown are not eligible for unemployment compensation, even if they’re not paid while working, since they’re not unemployed, the agency says.

A statement from Gov. Mike Dunleavy’s office said that 4,700 state executive branch positions are at least partially federally funded, but will see no disruption in pay and will report to work. The federal government will determine the status of federal employees who work in state of Alaska departments, the statement said.

What services will continue?

Despite the shutdown, several federal programs like Social Security, Medicare and veterans benefits should continue as usual.


Medicare is funded permanently, so benefits will not be affected by a shutdown. Medicaid would also operate for the time being since the program is funded for the next three months.

The Centers for Medicare and Medicaid Services could experience some administrative disruptions. According to the agency’s contingency plan, more than half of its staff will be furloughed, which could cause processing lags.

Like Medicare, Social Security is not subject to annual appropriations, so in the event of a shutdown the Social Security Administration would continue to send checks.

Veterans benefits like pensions and health care would also continue, and most of the Department of Veterans Affairs will keep working through a shutdown.

For food assistance, the Supplemental Nutrition Assistance Program will maintain operations through October, according to Shirley Sakaye with the Alaska Department of Health.


“If the shutdown goes beyond October, the feds have stated they will provide guidance to states,” Sakaye said by email.

Benefits for the Women, Infants and Children program “will be funded through December” using unspent funds, she said.

The U.S. Postal Service will still deliver mail uninterrupted during a shutdown, and all post offices will remain open. USPS is not funded through tax dollars, so it won’t be impacted by a shutdown.

[How a government shutdown would affect Medicare and Medicaid benefits]

Alaskans will be able to apply for passports from the U.S. Passport Agency, but with the agency facing furloughs and an already extensive backlog, securing a passport could take longer than usual.


The National Weather Service will continue operating its regular schedule, keeping up forecasts, warnings and observations, spokeswoman Maureen O’Leary said in an email. Also, critical functions such as radar repair will continue, she said.

But routine equipment maintenance, upgrades to forecast models and other longer-term improvements to service delivery will be delayed, she said.

As far as state services go, the statement on Tuesday from the governor’s office said Alaska is prepared to continue state-administered federally funded programs for 34 days — the length of the most recent shutdown that ended in 2019.

If a shutdown lasts longer than that, the state “will reevaluate the situation if necessary, and prioritize programs that most directly impact the life, health, and safety of Alaskans,” the governor’s office said.

Active-duty military operations, including search and rescue, will also continue through a shutdown even as service members miss paychecks.


What services might be paused?

A shutdown will likely lead to wide-ranging impacts, both big and small. Applications for social service programs could be stalled, permitting efforts could be put on hold, small-business loans could be delayed, and many federal contractors aren’t paid.

The White House this week said a shutdown will leave disaster relief programs underfunded, delaying 14 long-term recovery projects in Alaska, and many more in the U.S. The White House did not say which projects in Alaska would be affected. The Federal Emergency Management Agency did not respond to an email seeking comment.

[FEMA delays $2.8 billion in disaster aid to keep from running out of money]

The White House also said travel could be delayed during a shutdown as air traffic controllers and Transportation Security Administration agents work without pay, including about 730 such workers in Alaska.

Transportation Secretary Pete Buttigieg has also raised concerns that air traffic controllers in training will be furloughed, hamstringing the department’s efforts to fill a controller shortage.


During the 2019 partial shutdown that lasted five weeks, 10% of TSA agents nationally, who were not getting paid, called in sick, exacerbating delays.

Public meetings scheduled in Alaska while the government is shut down would also likely be canceled until it ends, federal officials say.

That includes two public meetings on the Biden administration’s environmental review of the oil and gas lease program in the Arctic National Wildlife Refuge. The first is set for Fairbanks on Monday.

Other federal meetings that could be canceled next week include subsistence regional advisory council meetings in Kenai and Arctic Village to discuss hunting and trapping regulations.

In Alaska, past shutdowns have also delayed permitting for commercial fishing boats, hobbled planning and preparation for wilderness firefighting efforts in Alaska, and led to closures or limited services at national parks, including those in Alaska.


What is Alaska’s congressional delegation doing?

The Alaska congressional delegation has said Congress should try to avoid a shutdown, though at this point, averting or blunting a lapse in appropriations appears unlikely.

Sen. Sullivan introduced the “Pay Our Military Act” to ensure members of the military will receive paychecks during a shutdown. His fellow Alaska Republican, Sen. Lisa Murkowski, and 14 other GOP senators have signed on.

Sullivan attempted to fast-track the bill on the Senate floor Wednesday.

“It’s pretty simple, in the event of a shutdown — and right now we are all working hard to make sure we avoid it — we need to make sure that the men and women who protect us get paid. That’s it,” Sullivan said on the Senate floor.

Sullivan made a similar attempt last week to pass a bipartisan bill treating Coast Guard pay like the rest of the military in the case of the shutdown. Due to the Coast Guard’s funding mechanism, during the shutdown ending in 2019, Coast Guard members were not paid alongside the rest of the military.


Both Sullivan-led bills have hit roadblocks from Democratic leadership.

Alaska Democratic Rep. Mary Peltola signed onto similar Coast Guard legislation in the House.

This week, the Senate also began work on a 45-day short-term funding measure. Murkowski and Sullivan have supported two procedural Senate votes this week to advance a spending plan.

But if the Senate bill passed in its current form, it’s likely dead on arrival in the House. House Republican leadership has floundered while trying to pass their own short-term spending legislation to avoid a shutdown.

Peltola is in Alaska taking time to grieve the loss of her late husband, Eugene “Buzzy” Peltola Jr., who died in a plane crash earlier this month.


Peltola spokesman Sam Erickson said Peltola is receiving updates from the House floor and she will be prepared to return to D.C. if her vote is necessary to avert a shutdown.

What are the potential economic impacts for Alaska?

Neal Fried, a recently retired state economist, said the federal workforce in Alaska is large and well-compensated.

Delayed payment of their wages won’t damage the economy if the shutdown lasts a short period, as they typically have in the past, he said.

“But if it drags on for months, it will obviously be felt in the economy,” he said.

Federal civilian employees averaged about $90,000 in pay last year, compared to about $65,000 for the average Alaskan, he said.


Jonathan King, an economist who owns Halcyon Consulting in Anchorage, said a prolonged shutdown will be stressful for people who don’t collect paychecks.

He said a shutdown could temporarily lead to less spending in the economy, but it shouldn’t cause long-term economic impacts in part because workers will receive back pay.

“The bigger economic effects are the lost productivity,” he said. “Environmental impact statements won’t get reviewed. Permits won’t get issued. So that’s sort of the hidden effect, the work that doesn’t get done in those periods.”

Non-essential federal employees reached for this article said that if a shutdown begins on Sunday, they expected to receive an email Monday explaining that they would not be permitted to work during the shutdown.

Daily News reporter Annie Berman contributed to this report.


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What’s Next for the Alaska-Hawaiian Airline Merger



What’s Next for the Alaska-Hawaiian Airline Merger

Skift Take

Today’s podcast looks at the Alaska Air-Hawaiian Air combo, American Air’s tussle with travel agents, and an investment in Travelport.

Good morning from Skift. It’s Tuesday, December 5. Here’s what you need to know about the business of travel today.

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Episode Notes

Alaska Air Group said it would buy Hawaiian Airlines in an all-cash transaction valued at $1.9 billion, including Hawaiian’s debt. The parent company of Alaska Airlines and regional Horizon Air said it would continue to operate Hawaiian as an independent brand, reports Edward Russell, editor of Skift publication Airline Weekly. 

The proposed merger isn’t a sure thing, given that it faces antitrust review by the Biden Administration. Analysts noted that JetBlue recently attempted to merge with Spirit Airlines, but that deal has since been mired in legal review. 

Given that the route networks of Alaska and Hawaiian wouldn’t lead to the same concentration as the networks of JetBlue and Spirit, the probability is higher that the Alaska-Hawaiian deal will go through, reports Russell.


Next, the American Society of Travel Advisors (ASTA) and American Airlines are going head-to-head in a complaint before the U.S. Department of Transport (DOT). 

The debate hinges on whether American Airlines has been wrong to withhold about 40% of fare inventory from travel agencies that fail to adopt its preferred booking technology, reports Selene Brophy, Skift’s experiences reporter.

Last month, American Airlines defended itself to regulators about its assertive push of the so-called new distribution capability while accusing travel agents of standing in the way of innovation. 

Skift asked ASTA for the group’s response, which it published on Monday exclusively. ASTA said, “What’s lacking from American Airlines’s response is how atrocious their workflow is for new reservations.” 

“We fully support the adoption of modern retailing methods when the necessary technologies are ready and in place, and we’re thankful for other airline partners who recognize that and have taken a more responsible approach.”


The complaint is under review by U.S. regulators, with a response expected next year.

Finally, Travelport said Monday that it had raised $570 million in new equity from investors, writes Skift tech reporter Justin Dawes. 

The world’s third-largest travel technology company will add new major backers, including Davidson Kempner Capital Management and Canyon Partners, to its existing equity stakeholders, Siris Capital and Elliott Investment Management.

With this new investment, Travelport will have a stronger balance sheet with the least debt amongst its peers, it said. Travelport competes with larger peers Amadeus and Sabre in helping travel agencies book flights from airlines. Once again, as with the other two stories of the day, the travel industry waits for regulators to decide what to do.


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Experts: Alaska buyout of Hawaiian Air was best possible outcome but questions remain



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.


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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Alaska-Hawaiian merger tests Biden administration’s resolve to preserve competition



Alaska-Hawaiian merger tests Biden administration’s resolve to preserve competition

Hawaiian Airlines and Alaska Airlines planes, seen in 2005 at Kahalui Airport, Hawaii and in 2021 at Seattle-Tacoma International Airport respectively. (AP Photo/Lucy Pemoni, Ted S. Warren)

Another proposed airline buyout has renewed debate over whether there has been too much consolidation in the industry, and whether it is hurting consumers.

The Biden administration has taken a tough stance against mergers, and it is certain to take a close look at Alaska Air Group’s proposed $1.9 billion acquisition of Hawaiian Airlines.

The deal is smaller than the mergers that reshaped the airline industry more than a decade ago. But the Justice Department is already fighting another smallish deal — JetBlue’s proposal to buy Spirit Airlines.


Alaska Airlines parent Alaska Air Group announced Sunday that it will pay $18 per share for Hawaiian — a huge premium over Hawaiian’s closing stock price on Friday. Hawaiian has struggled to recover from the pandemic and new competition from Southwest on intra-islands flights. It has lost $159 million so far this year.

Alaska says Hawaiian will continue to operate as a stand-alone brand, an unusual step.

Here’s some information about each airline’s customer base, the way antitrust regulators will view the deal, and the impact of past mergers.


Alaska Air Group, based in Seattle, is the fifth biggest U.S. airline company by 2022 revenue, slightly ahead of JetBlue, but is not widely known beyond the West Coast. Its biggest operation is in Seattle, and it bulked up in California in 2016 by buying Virgin America for $2.6 billion after a bidding war with JetBlue.

Hawaiian Airlines — only a quarter the size of Alaska Air by revenue — operates flights throughout the island chain and to the U.S. mainland and also relies heavily on traffic between Asia and Hawaii.



Alaska and Hawaiian are rather traditional airlines. Their fares are typically in line with larger carriers and higher than those charged by discount airlines. In September, both charged slightly lower than average fares for economy-class seats between Hawaii and the mainland, according to figures from aviation-data firm Cirium.

Helped by good weather, Hawaiian often tops the industry for on-time flights, and Alaska usually ranks near the top too. Both score in the middle for consumer complaint rates, according to U.S. Department of Transportation data.


This deal will provide another test for the Biden administration’s resolve to preserve competition in various industries.

The Justice Department succeeded earlier this year in killing a partnership between JetBlue and American Airlines, and the trial over the government’s lawsuit to stop JetBlue from buying Spirit Airlines is scheduled to wrap up this week.


In the JetBlue case, the Justice Department sued because it wants to preserve Spirit, the nation’s biggest discount airline. If regulators sue to block the Alaska-Hawaiian deal, they are likely to make a different argument — that it would put too much traffic between Hawaii and the U.S. mainland in the hands of one company.


Between them, Hawaiian and Alaska control about 40% of that market, according to Cirium.

Alaska CEO Ben Minicucci said buying Hawaiian will help it compete against the four biggest U.S. airlines. That is exactly the same argument JetBlue made to defend its purchase of Spirit — and that didn’t stop the Justice Department from suing.

Henry Harteveldt, a travel analyst for Atmosphere Research Group, said the fact that Alaska is not buying a low-fare airline like Spirit could improve the chances that regulators will let the purchase of Hawaiian go through.


The federal government raised few objections to a slew of mergers that consolidated power in the industry. American Airlines, Delta Air Lines, United Airlines and Southwest Airlines control about 80% of the domestic air-travel market, and all of them grew significantly through mergers between 2008 and 2013.

Under President Joe Biden, the Justice Department seems to be showing some buyer’s remorse that previous administrations didn’t block some of those mergers.



Airfares rose faster than inflation for a time after the initial wave of consolidation, but that trend has cooled. The average fare today for a flight within the United States is 35% lower than in 2000 when adjusted for inflation, according to the Transportation Department. However, fees have grown sharply and partly offset lower fares.

The industry trade group, Airlines for America — both Alaska and Hawaiian are members, as are the largest U.S. carriers — insists that competition is robust.

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