One thing confuses me about the Department
of Transportation approval
of the merger between Alaska and Hawaiian airlines — Who makes the money?
Executives at both airlines say that each
will maintain its own brand identity. That’s good, because you would hate to
see that go away. Hawaiian Airlines, especially, is revered.
But during this process, proponents of the
collaboration repeatedly pointed out that it made sense because there were very
few overlapping routes. Even the respective names of the airlines suggest a
disparity.
But I ask again, who makes the money? And,
more importantly, how do they make the money?
Not having many routes that overlap is
good, of course, but it makes you wonder how they can trim expenses? And I will
ask again: How is this different than the proposed merger between JetBlue
Airways and Spirit Airlines?
Follow the money
The understandable sentiment was that a
proposed merger between JetBlue and Spirit did not leave the consumer with a
viable alternative in terms of pricing. That was the basis for the Department
of Justice to originally block the two airlines from getting together. To me,
this is just two airlines doing the same thing that JetBlue and Spirit wanted
to do – create the nation’s fifth-largest airline and make a few dollars in the
process.
Nothing wrong with that.
But will the consumer still end up paying
more in the long run? Alaska agreed to maintain key Hawaiian routes and adopt
consumer protections. Apologies ahead of time for the cynicism, but how long is
that going to last?
“Our top priority is protecting the
traveling public’s interest in this merger,” Transportation Secretary Pete
Buttigieg said. “We have secured binding protections that maintain critical
flight services for communities, ensure smaller airlines can access the
Honolulu hub airport, lower costs for families and service members, and
preserve the value of rewards miles against devaluation. … This more proactive
approach to merger review marks a new chapter of DOT’s work to stand up for
passengers and promote a fairer aviation sector in America.”
Time will tell. I will believe it when I
see it, but for right now I’m just trying to follow the money.
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