SEATTLE and HONOLULU - Alaska Air Group, Inc. (NYSE: NYSE:ALK) has completed the acquisition of Hawaiian Holdings , Inc. (NASDAQ: NASDAQ:HA), effectively expanding its network to 141 destinations, including 29 international markets, and offering enhanced benefits to travelers. The merger maintains the distinct brands of both airlines and establishes Honolulu as a significant hub.
The acquisition, announced today, allows the combined airline to offer nearly 1,500 daily flights with a fleet of 350 aircraft and employ over 33,000 individuals. The merger also promises increased access to destinations through the oneworld Alliance and global partners.
Alaska Air Group and Hawaiian Airlines will continue to operate independently until a single operating certificate from the Federal Aviation Administration (FAA) is secured, which will then permit the airlines to function as a single carrier. Until that time, each airline will maintain its own website, reservation system, and loyalty program.
Guests of both airlines will soon enjoy the ability to transfer miles between Mileage Plan and HawaiianMiles accounts without charge and purchase flights on each other's websites. Additionally, a new travel program for Hawai'i residents, Huaka'i by Hawaiian, will offer unique discounts and benefits.
The integration process is expected to introduce more benefits gradually, including the ability to accrue miles on either airline, expanded redemption opportunities, and matched elite status across both loyalty programs. A unified loyalty program combining the best features of Mileage Plan and HawaiianMiles is anticipated to launch in mid-2025.
The airlines have committed to community engagement and environmental stewardship, aiming to achieve net-zero carbon emissions. Alaska Air Group's acquisition strategy is projected to generate at least $235 million in synergies, with expectations of earnings accretion and a robust return on invested capital within the first few years.
Hawaiian Airlines' stock has been de-listed from NASDAQ as of today, with the combined organization continuing to trade under the ticker ALK on the New York Stock Exchange.
This press release statement outlines the merger's benefits and the future plans of the combined organization, emphasizing the commitment to customer service, community involvement, and environmental responsibility. The full integration of Alaska Air Group and Hawaiian Airlines is poised to create a more expansive and competitive presence in the airline industry.
In other recent news, Alaska Air Group has made significant strides in its merger with Hawaiian Airlines, following approval from the U.S. Department of Transportation. The merger, first announced in December 2023, is set to create a stronger platform for growth and competition in the U.S. aviation market. The interim leadership team for Hawaiian Airlines, led by Joe Sprague, will oversee operations until a unified operation under two brands, Hawaiian Airlines and Alaska Airlines, is established.
TD Cowen recently increased Alaska Air's price target to $52.00, maintaining a Buy rating on the stock. This follows Alaska Air's updated third-quarter 2024 financial guidance which anticipates an earnings per share (EPS) between $2.15 and $2.25, a notable increase from the previous estimate. The revised guidance also indicates a rise in Revenue per Available Seat Mile (RASM) by 2%, and a decrease in expected fuel costs to approximately $2.65 per gallon.
Alaska Air Group also reported strong second-quarter results, with a GAAP net income of $220 million and an adjusted net income of $327 million. The company's revenue was significantly boosted by nearly $1 billion from premium segments. These recent developments highlight the ongoing trends and events within the company.
InvestingPro Insights
Following the recent acquisition of Hawaiian Holdings by Alaska Air Group (NYSE: ALK), investors and stakeholders are keenly observing the financial health and market sentiment surrounding Alaska Air Group. According to InvestingPro data, Alaska Air Group boasts a market capitalization of $5.17 billion, with a positive revenue growth of 1.74% over the last twelve months as of Q2 2024. This growth is indicative of the company's expanding operations and may signal a strengthening position in the airline industry post-merger.
InvestingPro Tips highlight that analysts have revised their earnings upwards for the upcoming period, reflecting optimism about the company's financial performance. Moreover, with a P/E ratio (adjusted) of 10.78 and a PEG ratio of 0.54 as of Q2 2024, the stock is trading at a low price-to-earnings ratio relative to near-term earnings growth, suggesting that it may be undervalued given its growth prospects.
Alaska Air Group's stock has demonstrated a strong return over the last month, with a 17.83% price total return, indicating a positive market reception that could be partially attributed to the strategic expansion through its latest acquisition. Additionally, the company operates with a moderate level of debt and does not pay a dividend to shareholders, which could imply a focus on reinvesting earnings into growth and integration efforts.
For investors seeking deeper insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/ALK, providing a comprehensive analysis of Alaska Air Group's financials and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.