The U.S. Department of Transportation (DOT) has successfully secured a set of binding and enforceable public-interest protections from Alaska Airlines and Hawaiian Airlines ahead of their proposed merger. These protections, a first in DOT’s review process, are designed to protect the traveling public, rural communities, and smaller competitors as the merger moves forward. They aim to safeguard key routes, guarantee rewards, and ensure service quality for passengers, marking a new chapter in the department’s proactive approach to airline mergers.
Secretary of Transportation Pete Buttigieg Speaks Out
U.S. Transportation Secretary Pete Buttigieg emphasized the significance of this move, stating, “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.” This action marks a distinct shift in how the DOT handles airline mergers, with a more proactive focus on safeguarding the public interest from the outset.
The Merger Request
On July 15, 2024, Alaska Airlines and Hawaiian Airlines filed a transfer application, requesting approval from DOT to combine and operate their international routes under one certificate. This was followed by an exemption application allowing them to close the deal before the final transfer approval. DOT can approve such requests based on criteria set in statute, which includes ensuring consumers across all regions have affordable access to services and maintaining routes for smaller communities.
Key Protections for Travelers
One of the hallmark features of the new agreement is the unprecedented level of protection for airline loyalty program members. Alaska Airlines and Hawaiian Airlines have committed to maintaining and even improving the value of rewards for frequent flyers. Among the new protections:
- No expiration of miles: HawaiianMiles and Alaska Mileage Plan miles earned before the merger won’t expire.
- Transfer miles at 1:1 ratio: Travelers can transfer miles between the programs at a 1:1 ratio before the creation of the new loyalty program.
- Maintain the value of miles: Both airlines have agreed to ensure that the value of miles remains the same or increases after the merger.
- No new fees for reward tickets: The airlines cannot impose additional change or cancellation fees for rewards redemption tickets.
Preserving Essential Services
Both Alaska Airlines and Hawaiian Airlines provide critical services for rural and isolated communities, especially in Hawaii and Alaska, where some areas rely on these flights for access to essential services such as healthcare and education. The merger conditions mandate that the combined airline must maintain these vital routes, including Hawaiian inter-island routes and key flights between Hawaii and the continental U.S.
Additionally, the merger includes specific provisions to ensure that the Honolulu hub remains accessible for smaller competitors and new entrants, ensuring that competition in the region remains healthy.
Family and Military Benefits
The agreement also puts a spotlight on the needs of families and service members. Families traveling with children aged 13 or under will be guaranteed free adjacent seating, removing the need to pay extra fees to sit together. The airlines will also offer travel credits or frequent flyer miles to passengers when controllable disruptions, such as delays of three hours or more, occur.
Military service members and their families will also benefit from the merger through waived fees. They will receive at least one free carry-on bag and two free checked bags, with no change fees imposed if a service member’s flight needs to be rescheduled due to military orders.
A Forward-Thinking Approach
This proactive approach to airline mergers by the DOT signals a new era in how the department oversees airline industry consolidation. By securing enforceable commitments upfront, DOT is aiming to protect consumers from potential downsides of mergers while promoting fair competition and affordable service access. With this agreement, Alaska Airlines and Hawaiian Airlines can proceed with their merger while adhering to a series of conditions designed to protect passengers and support vital transportation links.
The merger will remain under close scrutiny by the DOT as they finalize the transfer application. If approved, the protections will stay in place for at least six years, ensuring a long-term benefit for travelers across the U.S. and the Pacific.
This move by the DOT demonstrates its commitment to ensuring airline consolidations serve the public interest without sacrificing service quality, competition, or affordability. The detailed set of protections secured from Alaska Airlines and Hawaiian Airlines sets a new standard for future mergers in the aviation sector.
