Alaska Airlines cleared a
major hurdle this week with the Department of Justice and its intended merger
with Hawaiian Airlines. Getting regulatory approval
from the DOJ is a huge step.
The merger now requires approval from the
U.S. Department of Transportation. Please don’t mistake my genuine joy over
this with cynicism. But I do have one question.
Why? Why was this combination allowed to move
forward while the proposed merger between JetBlue Airways and Spirit Airlines
was blocked?
"The time period for the U.S.
Department of Justice (DOJ) to complete its regulatory investigation of
the proposed combination of Alaska Airlines and Hawaiian Airlines under the HSR
Act has expired," Alaska said in a statement. "This is a significant milestone in the process to join our
airlines."
The statement from Alaska Airlines continued:
"During the DOJ’s review,
Alaska worked closely with the Hawaii Attorney General to reinforce and expand
upon our commitments for the future of Hawaiian Airlines and to Hawaii
consumers. These include plans to maintain the Hawaiian Airlines brand and
local jobs and continue providing strong service between, to, and from the
Islands. The proposed combination remains subject to other customary closing
conditions, including approval from the U.S. Department of Transportation (DOT)
of an interim exemption application. Following that step, we will complete work
to close the transaction, and proceed with integrating the two companies,
welcoming Hawaiian Airlines guests and employees into Alaska Air Group, and
expanding benefits and choice for consumers throughout Hawai‘i, the
Asia-Pacific region, continental United States and globally."
A Bad Precedent?
I have no doubt that the airlines will
blend seamlessly. We are talking about two extraordinarily well-run companies
here, but the nagging question still persists.
Why?
Why this one? Why this merger when, just eight months ago, the federal government went to court to block the proposed merger between JetBlue and Spirit? Legal aficionados, government officials and aviation experts will tell you that it all has to do with monopolies and competitiveness.
A JetBlue merger would prohibit customers from a competitive
option in the marketplace. Alaska and Hawaiian have two different
cultures and very few overlapping routes.
I get the logic; I might not like it,
but I do understand it.
But by that same thinking, you’re saying
that McDonald’s and Burger King could never merge, or Coke in Pepsi, because
there would be little to no competition for consumers. You can’t tell a company
how it should run its business. However, the Biden administration has already shown that it is very anti-business.
Frankly, it sets a bad precedent to
approve one merger and deny another.
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