Hawaiian Air Merger Worries Just Ratcheted To New Level

With the deadline for the Department of Justice’s (DOJ) decision on the Hawaiian Airlines and Alaska Airlines merger just about 48 hours away, the situation remains highly volatile. New developments suggest the possibility of an impending legal battle in some form. With two days before the extension deadline, there has been no official word, leaving Hawaii travelers, the airline industry, and investors on edge.

Today, Hawaiian Airlines’ stock reflected the uncertainty of the situation, experiencing dramatic swings—first hugely plummeting at the opening and then rebounding by the same amount it had lost. This wild volatility underscores the degree of nervous anticipation surrounding the potential merger and its far broader implications for the U.S. airline industry and for Hawaii.

DOJ makes moves towards possible litigation.
The latest information indicates that the DOJ may be preparing for legal action against the merger. Brian Hanna, a federal antitrust attorney with the DOJ’s Antitrust Division, who was involved in the case that blocked the JetBlue-Spirit Airlines merger earlier this year, has filed an application in Honolulu’s federal district court.

Hanna stated, “I expect to appear on behalf of the United States and to tend to the interests of the United States before this Court.” This move strongly suggests that the DOJ is positioning itself for potential litigation if needed to block the Hawaiian/Alaska merger

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Today, Hawaiian Airlines’ stock reflected the uncertainty of the situation, experiencing dramatic swings—first hugely plummeting at the opening and then rebounding by the same amount it had lost. This wild volatility underscores the degree of nervous anticipation surrounding the potential merger and its far broader implications for the U.S. airline industry and for Hawaii.

Separate “Serial litigants” consumer lawsuit dismissed.
Alaska Airlines has, on the other hand, successfully had the lawsuit filed by a group aiming to block its planned acquisition of Hawaiian Airlines, dismissed by a U.S. district judge. The judge ruled that plaintiffs failed to demonstrate how they would be personally impacted by the merger. This issue, however, appears minuscule compared with the DOJ’s pending decision

Is a Hawaiian deal still possible?
Given the recent developments, there’s also significant speculation that Alaska Airlines might be seeking a settlement with the DOJ to avoid a full-blown legal battle. Such a deal could involve Alaska conceding to certain conditions or making specific concessions to address the DOJ’s concerns about the merger being anti-competitive.

The DOJ’s strategy appears to be aimed at identifying and addressing what it perceives as “defects” in the merger proposal. By negotiating potential remedies with Alaska, the DOJ may be trying to reach an agreement allowing the merger to proceed without entirely blocking the deal. However, if no agreement is reached, the DOJ could still file a suit as early as Thursday to prevent the acquisition from moving forward.

The road ahead for Hawaiian Airlines.
With the DOJ’s intentions becoming clearer, the next 48 hours will be historic and crucial. The outcome of these negotiations—or the potential lawsuit—will have significant ramifications for Hawaiian Airlines, Alaska Airlines, the broader U.S. airline industry, and Hawaii travelers.

We will keep you updated as we monitor for the next developments while we head to a final decision that will shape the future of air travel in and out of Hawaii. Stay tuned for more updates as the crucial deadline approaches