Alaska Airlines is facing a consumer lawsuit that threatens its proposed $1,9 billion merger with Hawaiian Airlines. The lawsuit, filed by eight plaintiffs including Warren Yoshimoto and Kristin Barroga, seeks to stop the merger under Section 7 of the Clayton Act.
Alaska Airlines asked the Hawaii District Court to dismiss the lawsuit, arguing that the plaintiffs have no direct connection to the airlines involved and that their lawsuit represents a repeat of previous unsuccessful challenges to aircraft mergers.
The airline emphasizes that the plaintiffs have not proven any specific threat of damage and have not defined a plausible relevant market on which the merger would have a negative impact. Alaska Airlines argues that only 3% of its routes overlap with those of Hawaiian Airlines and that the merger would not harm competition.
Merger plans in the sights of the judiciary
Alaska Airlines and Hawaiian Airlines' parent companies, Alaska Air Group and Hawaiian Holdings, agreed to merge in December 2023. Under the agreements, Alaska Air Group would assume $900 million of Hawaiian's debt. The combined company plans to operate both airlines under their respective brands and integrate their operating platforms. The US Department of Justice (DOJ) has until August 5th to decide on the planned merger.
The merger would make the combined airline a major player in air transport with more than 1.300 daily departures and 138 destinations. Nevertheless, the merger plans are at stake due to the ongoing lawsuit.
Industry experts and prospects
Industry experts are following the case closely and see the DOJ's decision as a pivotal moment for the future of the proposed merger. If the DOJ gives the green light, it would represent an important milestone for the airline industry and potentially trigger further consolidation in the industry.
Alaska Airlines' lawsuit and response underscore the complex legal and economic challenges airlines face during mergers and acquisitions. The court's decision will have a significant impact on the competitive landscape in air travel and could significantly influence the strategic direction of Alaska Airlines and Hawaiian Airlines.
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