Alaska Airlines to acquire Hawaiian Airlines for $1.9 billion – Reuters
© Reuters. FILE PHOTO: Hawaiian Airlines planes sit idle on the runway at Daniel K. Inouye International Airport due to a business downturn due to COVID-19 in Honolulu, Hawaii, U.S., April 28, 2020. REUTERS/Marco Garcia /file photo
Posted by Akanksha Khushi
(Reuters) – Alaska Airlines has agreed to acquire Hawaiian Airlines for $1.9 billion, including $900 million of Hawaiian Airlines’ net debt, the two companies said on Sunday in the latest consolidation between U.S. airlines.
Alaska Airlines will acquire Hawaiian Airlines for $18 per share in cash, the companies said, adding that the deal will unlock more destinations and expand reach across the Pacific region, the continental U.S. and globally.
The transaction is expected to result in high single-digit revenue accretion for Alaska Airlines within the first two years without being expected to have a material impact on long-term balance sheet metrics.
“This combination is an exciting next step in our shared journey to provide a better travel experience for our passengers and expand options for travelers on the West Coast and in Hawaii,” said Alaska Airlines CEO Ben Minicucci. .
The combined organization will be based in Seattle under Minicucci’s leadership, and Honolulu will become a key hub for Alaska Airlines.
The deal comes at a time when the airline industry has been relying on strong demand to ease inflationary pressures through higher ticket prices as higher labor and fuel costs drive up costs and reduce profits.
The International Association of Machinists and Aerospace Workers (IAM), a union representing 600,000 employees in the manufacturing and aerospace industries, said both airlines would take every step to protect the rights of their members during and after the acquisition. .
“We will participate in all conversations while this agreement focuses and protects and defends the interests of our members,” said IAM District 142 President and Secretary John Coveny.
alaska airlines (NYSE:) lowered its full-year profit outlook in October, negatively impacting its outlook due to rising costs as major U.S. airlines felt the pinch from rising oil prices.