HONOLULU, HI – Hawaiian Holdings Inc. (NASDAQ:HA), the parent company of Hawaiian Airlines, has announced the expiration of the review period for its proposed merger with Alaska Air Group Inc. (NYSE:NYSE:ALK), a critical step forward in the consolidation process. The review period, overseen by the Department of Justice (DOJ), ended at 12:01 a.m., Eastern Time, today.
The merger, first announced on December 2, 2023, involves Alaska Air Group's subsidiary, Marlin Acquisition Corp., merging with and into Hawaiian, with Hawaiian continuing as a wholly owned subsidiary of Alaska. The companies had previously complied with a request for additional information from the DOJ on May 7, 2024, initiating a 90-day review period as part of a March 27, 2024, timing agreement.
Discussions with the DOJ led to several extensions of this review period, with the most recent extension pushing the deadline to today. With the expiration of this period, the companies are now awaiting the U.S. Department of Transportation's (DOT) approval of an interim exemption application submitted jointly by Hawaiian and Alaska.
The closing of the merger is contingent on various customary conditions, including the aforementioned DOT approval. Both Hawaiian and Alaska have expressed their intention to continue working cooperatively with the DOT to facilitate the merger's completion.
This merger is significant for the airline industry, representing a major alignment between two leading carriers. Hawaiian Holdings Inc., headquartered in Honolulu, Hawaii, has been a notable player in air transportation, particularly for flights connecting the Hawaiian Islands with other destinations.
The merger's completion would solidify Alaska Air Group's presence in the air transportation industry and expand its operational footprint.
This news is based on a press release statement.
In other recent news, Hawaiian Holdings reported an adjusted EBITDA loss of $21 million for Q2 2024. Despite this, the company managed to raise $400 million through financing 10 A321 neo aircraft and exchanged $1.2 billion in loyalty bonds due in 2026 for new bonds maturing in 2029. Additionally, the airline has successfully deployed Starlink inflight connectivity across all 18 Airbus A321neos.
These recent developments come amidst a global shortage of new aircraft, which has prompted airlines to consider mergers and acquisitions as a strategy to increase their capacity and market shares. The proposed deal between Alaska Air and Hawaiian Holdings is particularly significant as it would grant Alaska Air control over more than half of the flight market to Hawaii.
InvestingPro Insights
As Hawaiian Holdings Inc. (NASDAQ:HA) moves forward with its merger plans with Alaska Air Group Inc. (NYSE:ALK), investors are paying close attention to the financial health and market performance of the company. According to the latest data from InvestingPro, Hawaiian Holdings is currently navigating through challenging financial waters.
InvestingPro Data highlights a market capitalization of $919.53 million, indicating the size of the company in the competitive airline industry. Despite recent operational advancements, the company's financial metrics show a gross profit margin of just 1.44% over the last twelve months as of Q2 2024, reflecting potential challenges in maintaining profitability. This is further underscored by a significant operating income loss of $407.01 million in the same period. Moreover, the stock price is trading near its 52-week high, with a price percentage of 99.89%, which could be of interest to investors looking for companies with a strong market presence.
One InvestingPro Tip that stands out is the concern over Hawaiian Holdings' ability to manage its debt. The company operates with a significant debt burden and may face difficulties in making interest payments, which is a critical consideration for investors in light of the merger. Additionally, the company is not expected to be profitable this year, as analysts have not only revised their earnings downwards for the upcoming period but also anticipate a drop in net income.
For investors seeking a deeper dive into Hawaiian Holdings' financial outlook and performance, there are 15 additional InvestingPro Tips available at https://www.investing.com/pro/HA. These tips provide a comprehensive analysis that can help investors make informed decisions, especially in the context of the company's ongoing merger process.
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