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The merger between Alaska Airlines and Hawaiian Airlines has received the green light from U.S. regulators, marking a significant development in the aviation industry. This strategic alliance aims to enhance connectivity across the Pacific and strengthen market competition by combining resources and operational efficiencies of both airlines. Travelers can expect improved flight options, expanded routes, and potential benefits such as enhanced loyalty programs. Regulatory approval follows extensive reviews addressing concerns about monopolistic practices within specific markets. Both airlines have committed to maintaining competitive pricing while providing high-quality service to their passengers. By joining forces, Alaska Airlines and Hawaiian Airlines strive to create a robust network that will not only benefit travelers but also fortify their positions in an increasingly competitive landscape marked by rising fuel costs and changing travel patterns post-pandemic. This merger is poised to reshape air travel dynamics between the continental United States and Hawaii.

The capital structure of ultra low-cost airline, Spirit Airlines (NYSE: SAVE) reflects the challenges it faces as analysts and investors contemplate its future as a standalone airline. On the face of it, a discount airline with a relatively young fleet should be positioned to thrive, but the effects of COVID, rising costs due to inflation, ongoing competitive issues, an engine issue that will ground aircraft, and a reputation for poor service have caused turbulence that SAVE has been unable to avoid: https://lnkd.in/dHr-vj6K

The recent termination of the JetBlue and Spirit Airlines merger has brought more attention to the merger of Alaska and Hawaiian Airlines. There are some similarities but also many differences in the two cases. YIRU ZHANG Valuations analyst at Cirium Ascend Consultancy assesses the routes, fleets and more in her new article: https://lnkd.in/gBktpQGu #aviation #airlines #AlaskaAirlines #HawaiianAirlines #AviationAnalytics #AirlineEconomics #Travel #tourism #Hawaii

?? Regulatory challenges for European #airline mergers ?? This recent Financial Times article provided an insightful overview of the increasing scepticism the European Commission has being showing towards proposed airline mergers. Here are some key takeaways that are particularly relevant for those in the regulatory side of M&A: ?? Regulatory scrutiny: European airline mergers face intense examination from EU regulators, worried about reduced competition leading to higher fares and fewer choices for passengers, as seen in past failed attempts such as Ryanair’s bid for Aer Lingus. ?? Current probes: Lufthansa’s 41 per cent stake acquisition in ITA Airways and IAG’s purchase of the remaining 80 per cent of Air Europa are under investigation, with regulators cautious of market dominance. ?? SAS deal exception: Air France-KLM’s minority stake in SAS has avoided similar scrutiny, suggesting a model for less contentious mergers involving smaller stakes and broader consortia. ?? Market dynamics: Airlines aim to scale up through mergers to compete with profitable US carriers and wealthy Gulf and Asian airlines. ?? Regulatory concessions: Airlines often offer to relinquish valuable airport slots to gain approval, but EU officials are demanding tougher concessions due to past inefficacies. ?? Economic context: Rising airline fares and the cost-of-living crisis make regulators more hesitant about approving mergers, aiming to protect consumer interests and market competition. ?? Fragmented industry: Despite consolidation efforts, the European airline market remains fragmented, with national carriers often receiving government support and maintaining distinct brands and management structures. This article provides valuable context for understanding the regulatory landscape and public sentiment, crucial for crafting effective comms strategies around high-stakes M&A ???? #StrategicCommunications #Airlines #MergersAndAcquisitions #PublicRelations #Regulation #EU #MergerControl

The cargo division of Asiana Airlines, a significant component of the South Korean aviation sector, is set to be sold to Air Incheon, a local cargo carrier, for 470 billion won ($342 million). This transaction was confirmed by Korean Air Lines on Wednesday, marking a crucial development in the ongoing restructuring of South Korea’s airline industry. The decision to sell Asiana's cargo business to Air Incheon follows the European Union competition regulator’s approval in June, which endorsed Air Incheon as the preferred bidder. This sale was a condition imposed by the EU as part of its approval process for the proposed merger between Asiana Airlines and Korean Air. The EU's antitrust authorities stipulated that the sale of Asiana's cargo operations was necessary to maintain competitive balance in the market, particularly within the cargo sector, before granting full approval for the merger. A formal sale agreement was signed on Wednesday, as reported by Korean Air in an official filing. The agreement stipulates that Asiana’s entire cargo fleet, including aircraft, personnel, customer contracts, and traffic rights, will be transferred to Air Incheon. The cargo division's operations, which are primarily based at Incheon Airport—South Korea's principal international hub and the fifth-busiest cargo airport globally—will significantly enhance Air Incheon's market presence. ? With this acquisition, Air Incheon, previously a smaller, cargo-only airline, is expected to emerge as South Korea's second-largest freight carrier, trailing only behind Korean Air. This strategic expansion positions Air Incheon to capitalize on the growing demand for cargo services, particularly as global trade dynamics shift and air freight becomes increasingly vital. ? Korean Air’s decision to divest Asiana's cargo business is part of its broader plan to acquire nearly two-thirds of Asiana Airlines for approximately $1.4 billion. This merger is poised to create a dominant player in the South Korean airline industry, enhancing operational efficiencies and expanding market share. However, the merger has been subject to rigorous scrutiny by global competition authorities, given the potential implications for market competition, especially in the cargo sector. ? To date, Korean Air has received approval for the Asiana acquisition from 13 out of 14 competition authorities involved in the review process. The final decision from U.S. regulators is anticipated by the end of October, according to Korean Air CEO Walter Cho. The outcome of this decision will be crucial for the completion of the merger, which has been in the works for several years.

While decisions about whether airline mergers are an existential necessity are still in the air, it's time to take a deeper look at their shadow side, to understand how they affect the lives of employees and passengers, and what their impact is on cost and service offered to passengers. Let's start with a real life story. On Sunday 9th?April 2017, Doctor Dao, United Airlines’ passenger, was violently dragged out from his seat just before the departure of his flight UA3411 from Chicago to Louisville. He was chosen to leave the plane against his will despite his claims that?he was needed at a Louisville hospital. The reason: airline needed?to?make room for four unexpected employees of a partner airline who needed to get to Louisville by Monday morning to crew another flight.?United originally characterized the flight as overbooked, but later said that was (obviously) not the case. The incident would have probably stayed contained locally (as most of the disruptive events do) if it was not for the video?that his fellow passengers posted on social media. It caused an outrage against United Airlines. Airline’s CEO Oscar Mu?oz rushed to defend the employees' conduct and said that forcibly removed doctor had been "disruptive and belligerent". As the video went viral and company’s shares began to slide Mr Munoz reset the tone and softened his words. The question is, why would an airline that cares about its business and reputation ever think of allowing a paying passenger to be assaulted, so that its own employee could take his seat? To answer this question we need to dig a bit deeper. Doctor Dao’s case revealed the tip of the underlying pattern that is invisibly eroding the future of air travel. Major legacy airlines are caught in a self-made trap by choosing to operate a hub-network, wrongly assuming that they can expand indefinitely within finite airport capacities. Consequences experienced today include operational and financial volatility of major hub operators, a rise in operational disruptions and passenger dissatisfaction. Read more at:

Why Brussels remains sceptical on airline mergers Europe’s carriers face tougher scrutiny from regulators as the market starts to thrive in wake of pandemic. Airline executives are no strangers to failed mergers in Europe.?Michael O’Leary, chief executive of Ryanair, notably made three failed bids to buy Aer Lingus in a campaign over nearly a decade. He finally gave up in 2015 after EU regulators insisted the deal would force up prices and cut choice. But O’Leary’s experience has done nothing to reduce the appetite for deals among big airline groups in Europe, with two of the region’s leading carriers under close scrutiny in Brussels over consolidation plans. Regulators have launched probes into deals by Germany’s Lufthansa and British Airways owner International Airlines Group (IAG), which were announced in the first half of last year.? #mergersandacquisitions #airlines #finance #business #airline #investmentbanking

Airline consolidation is indeed very active! It has been two months since I did my last post about this topic. In that time, International Airlines Group (IAG) has dropped its bid for Air Europa, Alaska Airlines successfully consolidated his bid with Hawaiian Airlines, and Air France has become a SAS - Scandinavian Airlines shareholder. Next year will be an important moment for TAP Air Portugal as a second privatisation program is under market consultation by the portuguese government. Some movements are a result of the pandemic's aftermath, while others reflect business dynamics, including the significance of aggregate demand and cost optimization, the latter always remaining a theory to be tested. The supply side in Latin America is undergoing significant evolution, and the US 'big three' and some Europeans groups have established various partnership agreements with the main Latin players, including equity in some cases. In a region where annual trips per capita are low (around 0.70), the potential for growth is immense, still it's crucial to collaborate with the right partner for each country. Considering the recent developments in Argentina, it is possible that these changes could start sooner rather than later. Let's monitor the region! #airtransport #airlines #consolidation #latinamerica

#ExpertEdge | Airlines are a fairly unique business. With high capital costs, constant regulatory mechanisms and labour-intensive processes, the margins are thin, returns on capital are tepid and profitability (if at all) is measured at the lower end of the spectrum. After years of losses, a merger or acquisition is the only hope for survival for some airlines. Overall, the merger or acquisition looks very good on paper. But what the numbers often miss is the institutional capability and the integration of cultures. As far as airlines go, this constitutes the greatest challenge and managing the culture and integrating cultures is a task that humbles even the most seasoned of managers. Over the years, airlines have evolved into two distinct classifications and consequently cultures. Namely, the full-service carrier and the low-cost carrier. The difference in names highlights a difference in philosophy and in culture. A full-service airline aims at providing a full-suite of services for the traveller but at a higher price point. On the other hand, a low-cost carrier aims at only providing the basics which is getting a passenger from an origin to a destination at the lowest cost possible. By: Satyendra Pandey, Managing Partner, AT-TV

Re Alaska Air/Hawaiian Air: re DOT $ALK $HA #merger Subject to the satisfaction or waiver of the remaining conditions to closing, Alaska and Hawaiian expect to consummate the Merger on or about September 18, 2024. "By this Order, the U.S. Department of Transportation grants the joint request for an exemption filed by Alaska Airlines, Inc. and Hawaiian Airlines, Inc. from the provisions of section 41105 of Title 49 of the United States Code, to the extent necessary to allow the Joint Applicants to operate under the common ownership of Alaska pending the Department’s action on a contemporaneously filed de facto transfer application, subject to certain conditions" On September 17, the U.S. Department of Transportation secured binding, enforceable public-interest protections from Alaska Airlines and Hawaiian Airlines prior to the close of their merger. The protections, necessary for the Department’s consideration of the airlines’ needed approvals, are aimed at preventing harms to the traveling public, rural communities, and smaller airline competitors.? As the merger moves forward, Alaska and Hawaiian are required to protect the value of rewards, maintain existing service on key Hawaiian routes to the continental United States and inter-island, preserve support for rural service, ensure competitive access at the Honolulu hub airport, guarantee fee-free family seating and alternative compensation for controllable disruptions, and lower costs for military families. “Our top priority is protecting the traveling public’s interest in this merger. We have secured binding protections that maintain critical flight services for communities, ensure smaller airlines can access the Honolulu hub airport, lower costs for families and service members, and preserve the value of rewards miles against devaluation,” said?U.S. Transportation Secretary Pete Buttigieg.?“This more proactive approach to merger review marks a new chapter of DOT’s work to stand up for passengers and promote a fairer aviation sector in America.”