Alaska Air to buy Hawaiian Airlines in a $1.9 billion deal with debt

SEATTLE — Alaska Air Group said Sunday it agreed to buy Hawaiian Airlines in a $1.9 billion deal including debt.

The combined company would keep both airlines’ brands, rooted in the nation’s 49th and 50th states. Alaska will pay $18 in cash for each share of Hawaiian, whose stock closed Friday at $4.86. The deal also includes $900 million in Hawaiian debt, which the airlines said brings the acquisition’s total value to $1.9 billion.

The combined airline would participate in the oneworld Alliance, which includes American Airlines, British Airways and Cathay Pacific. It would also combine two networks to offer more connectivity to 138 destinations, including tripling destinations that can be reached within one stop in North America for travelers from Hawaii.

The companies said they would also keep Honolulu as a key hub and that they’re “committed to maintaining and growing union-represented workforce” in Hawaii.

The deal still needs approval from the boards of both companies, as well as from the shareholders of Hawaiian Holdings. It will also need the blessing of U.S. regulators, which have shown resistance to more consolidation within the airline industry out of fear it could lead to higher fares.

The Biden administration is already trying to block JetBlue’s proposed $3.8 billion acquisition of Sprit Airlines, which would subsume the nation’s biggest budget carrier. The Justice Department has already won a lawsuit that killed a partnership between JetBlue and American Airlines.

The average domestic airline fare out of Seattle during the spring was $409.93. That was up from $293.08 two years earlier, according to data from the U.S. Department of Transportation.

The average domestic airline fare out of Honolulu during the spring was $367.94. That was up from $329.93 two years earlier, according to data from the U.S. Department of Transportation.

The Alaska and Hawaii companies expect the deal to close in 12 to 18 months.