Monday Insight – December 4, 2023

The Alaska/Hawaiian Deal
A Change In Ownership, Not A True Merger

To cut to the chase and through what will likely be a media-wallow about the evils of a constricting airline system, let’s just hit the bullet-points:

  • No significant route overlap with Alaska. Like, only a couple of routes from mainland to Hawaii.
  • The two route systems have little in the way of market synergies. They are completely different in scope and traffic base.
  • Alaska brings mainly the advantage of combining administrative overhead, reducing the cost structure at Hawaiian.
  • Hawaiian faces temporary issues with Pratt & Whitney engines on new Airbus airliners – so do many other airlines.
  • Hawaiian under Peter Ingram’s leadership has turned HA into a viable carrier with a carefully-crafted route system optimizing demand for Hawaii vacations.
  • No downside for consumers. There are no routes to be cut.
  • No major market expansion opportunities due to the combination.
  • Hawaiian focuses on one product – Hawaii, which is a very niche market.
  • 717 replacement in the near future. A200-300s? Can do inter-island and mainland routes.
  • It is a change of ownership and not really a combination of airline route systems. Reportedly, the identities will remain distinct as will the route systems

A positive deal for all involved.