Will US Government Block Merger Between Hawaiian Airlines and Alaska Airlines?

Is the United States Department of Justice (DOJ) going to block the merger between Hawaiian Airlines and Alaska Airlines? At least one investment publication seems to think so.

“The Department of Justice is unlikely to approve its planned $1.8 billion sale to Alaska Air. The antitrust regulator is preparing to challenge the combination,” wrote Seeking Alpha, as quoted by Beat of Hawaii.

A decision by the Department of Justice is due to be made in August.

If true, it would be the second rejection of an airline merger this year, as the DOJ previously blocked an attempt by JetBlue Airways to merge with Spirit Airlines in a case that went all the way to a federal trial. The DOJ said the airline merger was not competitive and violated antitrust rules.

In this instance, it’s clear to see one of the reasons why Hawaiian wants to merge – the airline has lost more than $230 million in the last two quarters on top of a $260 million loss last year. But while several airlines fly to Hawaii, Hawaiian Air has a robust inter island business.

Still, the losses have been significant. Hawaiian airlines lost 18 percent of its stock price in the last week.

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