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High-Stakes Chess: Alaska and Hawaiian Airlines’ Latest Maneuvers Examined

by Staff

Alaska Airlines’ Ben Minicucci and Hawaiian Airlines’ Peter Ingram have been on tour in Hawaii to help bolster their proposed merger, which will soon be in the sights of the US Justice Department. Their most recent stop among many was a business meeting at the Hilton Hawaiian Village Waikiki Beach Resort hosted by the Chamber of Commerce Hawaii.

How much does getting local buy-in to their 1.9B plan of merger matter now, with the whole deal contingent on federal regulatory approval? We say it could be important to have the community’s backing.

Alaska thinks so, too. They recently established a Hawaii Community Advisory Board to honor Hawaii and Hawaiian Airlines.

Airlines proffer the advantages of a combined airline.

During their discussions, the well-known CEOs pointed to significant benefits that would be realized, including a major route expansion. We predict the fleet will be rebranded Alaska-Hawaiian, and Alaska will strategically deploy the widebody fleets, originally from Hawaiian, globally.

It would not surprise us to see Seattle to Sydney, for example. Currently, that route does not exist. What Hawaiian gives Alaska is the chance to be an international carrier, especially across the Asia Pacific region.

Honolulu would become the second-largest hub in the Alaska network. We would expect to see the current Hawaiian Airlines lounges in Honolulu significantly upgraded. Alaska has further said it will continue serving POG and be competitive and robust with interisland service.

Hawaiian was enthusiastic about the strengthened loyalty program that would ensue, saying, “Now you can use those miles on a larger network. Now you’ve chosen what miles on oneworld, and really the strength of that combined loyalty program is going to be really powerful for our guests from here in Hawaii.”

Exactly how a combined loyalty program would work remains elusive and will be determined with other significant issues later in the process.

Could Hawaiian Airlines Survive Without Alaska Deal? A World Of Emotion And Change.

We can’t help but recall the expression on Peter Ingram’s face when they announced the merger, and it appeared to us to be anything but enthusiastic (image above). But that was two months ago, and now the situation is different. By the way, this is more like Peter normally looks.

Hawaiian Air CEO Peter IngramHawaiian Air CEO Peter Ingram

Alaska’s affable Minicucci emphasized something inaccessible to Hawaiian Airlines passengers. That was the recognition that the most elite passengers would receive access to all of Alaska’s lounges and those of oneworld Alliance.

Hawaiian/Alaska touting oneworld as a big uplift; on that point, we could concur.

Currently, Hawaiian Miles are relatively useless beyond the scope of Hawaiian’s limited flight network. That compared with Alaska’s miles, which BOH editors have used for travel on other global airlines nimbly.

As a global alliance comprising more than a dozen airlines, the CEOs believe the merger will enhance competitiveness against the Big Four airlines. However, they acknowledged that the merger is still in the planning stages, requiring careful consideration of factors such as combining reservation systems and staff.

Honolulu, HI, USA – July 22, 2019:Daniel K. Inouye International Airport building in Honolulu Hawaii.

How will Honolulu fights be impacted by the proposed merger?

Alaska said it plans to grow the combined airline’s presence in Honolulu and Hawaii. Minicucci said, “Our idea, just to be clear, is to grow this pie, not to keep it the same. We see a big presence here.

That posturing aims to assure Hawaii stakeholders that the 7,000 Hawaiian Air employees, primarily based in Hawaii, will still be needed. Ben continued, “Most of the operations personnel, of course, we’ll need. The question is what the back-office support will be. Obviously, there’s a duplication in both companies. We’re going to work through that whole process, and we’re going to be extremely communicative in terms of what our progress is.”

There is no further information since the merger was first announced. At that time, questions from those in the audience included how the two envision combining staff that have both union and non-union personnel.

Alaska Airlines Basic Economy Changes May Benefit Hawaii TravelersAlaska Airlines Basic Economy Changes May Benefit Hawaii Travelers

Alaska points to its employee incentives.

Also this week, Alaska announced its annual incentive payout, which paid employees $200 million last year. Based on company performance, employees earn an added bonus. Alaska said that equated to “more than 6 percent of most employees’ annual pay last year.”

Hawaiian Airlines WiFiHawaiian Airlines WiFi

Hawaiian points to its WiFi at long last getting installed.

Hawaiian has confirmed that it has obtained FAA approval to deploy its free Starlink WiFi on the company’s troubled Airbus A321neo, which is currently being installed on that fleet. It will be the first major airline to put this technology on board, and it is expected to be the fastest, most capable inflight connectivity available worldwide, offered free to every guest.

Next steps for Alaska and Hawaiian merger.

In addition to regulatory approval, the merger awaits concurrence from shareholders, including those at Hawaiian, who will vote in just two weeks. A Hawaiian Airlines’ shareholder lawsuit has also been filed to block the merger. The entire process may take up to 18 months.

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