Alaska Air to buy Hawaiian for $1.9b

Alaska Air Group Inc said on Sunday it would acquire Hawaiian Holdings Inc for $1.9 billion, including debt, placing a bet on a troubled airline with lucrative routes as US antitrust regulators fight consolidation in the sector, reports Reuters.
Alaska Air said it would pay $18 per share in cash, close to four times Hawaiian's closing price on Friday. The whopping premium reflected how battered Hawaiian's shares were. The Maui wildfires, high fuel costs and jet engine recall issues at some of Hawaiian's Airbus SE planes contributed to heavy losses.
The deal is bound to attract antitrust scrutiny as US regulators challenge JetBlue Airways Corp's proposed $3.8 billion acquisition of Spirit Airlines Inc in court.
Antitrust enforcers have been suspicious of mergers between small airlines despite 80% of the US aviation sector controlled by four players: United Airlines, American Airlines, Delta Air Lines and Southwest Airlines. They were successful in getting JetBlue in July to abandon a three-year-old alliance with American Airlines.
The tie-up with Hawaiian would give Alaska Air, valued at $5.1 billion, control of more than 50% of the market for Hawaii flights, to one of the world's most popular tourist destinations.
"This is where people want to come spend time and vacation and have weddings and anniversaries. This is something that we believe that will remain strong for years to come," Alaska Air CEO Ben Minicucci said in an interview.
He expressed confidence that regulators would approve the deal by the end of 2024 because the two airlines overlap in just 12 of the 1,400 flights they collectively operate.
Alaska Air also defended its 270% premium offer as a bargain, noting that the deal values Hawaiian at 0.7 times its annual revenue, far below the industry average of 1.7 times. It added it expected a minimum of $235 million in annual savings.
Alaska Air approached Hawaiian to discuss a potential tie-up over the summer, people familiar with the matter said.