The Justice Department is taking a little more time to review the deal
In a possible bit of recent history repeating itself, the merger between Alaska Airlines and Hawaiian Airlines is looking a little bit shakier after an auspicious request from the federal government. Both airlines reported Tuesday in securities filings that the Department of Justice had asked for and was granted an extra 10 days to review their $1.9 billion deal.
“The Review Period was previously scheduled to expire on August 5, 2024,” Alaska said in its filing. “On July 29, 2024, Alaska and Hawaiian agreed with the DOJ to extend the Review Period until 12:01 a. m. Eastern Time on August 15, 2024.”
Bloomberg reports that the Justice Department, which successfully blocked a merger between Spirit Airlines and JetBlue Airways earlier this year, is weighing whether to pursue a similar anti-trust case for Alaska-Hawaiian.
The announcement of the extension came the same day that Hawaiian Airlines reported earnings. On a call with analysts, CEO Peter Ingram said that his company is moving some money around just in case the deal is delayed, or worse. The moves include refinancing bonds based on revenue from its loyalty program and raising money to finance new jets.
“While we are optimistic that the merger will achieve regulatory clearance in due course, these steps provide a meaningful liquidity runway into 2029,” he said.
Asked whether the company’s regulatory limbo would make it more difficult to adjust to a world where lots of airlines are reconfiguring their route networks to cut back on “excess capacity,” Ingram added that his carrier is trying to keep its strategic options open.
“There are some limitations on what we can do during the period up to [the deal closes], but we are also very mindful of the fact that we are two independent airlines today and we need to compete independently,” he said. “And so when we talk about decisions from a network or pricing standpoint, those are entirely within the control of Hawaiian Airlines to do up to and until the deal is closed.”
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