Alaska Airlines clears a big hurdle in its proposed merger with Hawaiian Airlines

Alaska Airlines planes are shown parked at gates with Mount Rainier in the background at sunrise, March 1, 2021, at Seattle-Tacoma International Airport. Alaska Airlines is one step closer to acquiring Hawaiian Airlines after the U.S. Department of Justice chose not to challenge the $1 billion deal that the carriers say will create a company better able to serve travelers.announced in December that it would pay $18 in cash for each share of Hawaiian.

Alaska and Hawaiian say they have few overlapping routes and the intent of a tie-up is to allow the new airline to better compete with the nation’s Big Four: American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.

The decision by the Justice Department to give the deal a pass runs counter to the Biden administration’s opposition to two recent attempts at further consolidation in the airline industry. The Justice Departmentwith American Airlines in the Northeast. In both, the administration argued that allowing the deals would have reduced choice and driven up prices for consumers.

Hawaiian depends heavily on tourism from Japan, which dropped sharply after the outbreak of COVID-19 and now suffers from the weakness of the yen, which has fallen by about 40% in comparison with the dollar since the start of 2021. In addition, Hawaiian faces more competition on flights between the islands and the U.S. mainland and from Southwest on intra-islands service.

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