On many levels, the proposed acquisition
by Alaska Airlines of Hawaiian Airlines mirrors the proposal between JetBlue
Airways and Spirit Airlines.
And on many levels, it's very different.
The deal still has to pass scrutiny by
federal regulators, with the usual words being thrown
around, like airfare pricing, competition and monopolies.
Right now, the Department of Justice is
fighting in a Boston federal court to block the merger between JetBlue and
Spirit. The DOJ believes any merger will increase airfare prices and create a
lack of competition.
The same scenario could play out in this
proposed merger between Alaska and Hawaiian. But what potentially makes this
different is that both Alaska and Hawaiian have different and distinct customer
bases.
In fact, of more than 1,800 combined
flights, there are less than two dozen that overlap.
“This
combination is an exciting next step in our collective journey to provide a
better travel experience for our guests and expand options for West Coast and
Hawai‘i travelers,” Ben Minicucci, Alaska Airlines CEO, said in a release.
But hang
on a minute.
While it
is impressive that the two airlines do not share an overlap of flights, the DOJ
is rightfully concerned that a lack of competition on some routes could drive
up prices. That is, on some routes, you might not have a choice.
The
proposed deal still has many talking points to be hashed out. Alaska Airlines
might want to buy Hawaiian, but that doesn't mean it's going to happen. And you
can bet that with the attention of the aviation world focused on the JetBlue
and Spirit trial, this merger will be heavily scrutinized.
For
example, Hawaiian has a huge imprint in the lucrative Asian market. Does a
merger mean that Alaska Airlines will raise prices to Japan, for instance? What
about closer to home? Will inter-island flights on Hawaiian Airlines suddenly
rise?
Moreover,
Hawaiian Airlines has a significant amount of airline partners that could see
this as an opening to raise airfares.
Needless
to say, this is a dilemma.
It's not
just 'another airline merger' and will have a significant impact on the
aviation industry.
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