New Hawaiian Airlines CEO Describes ‘Day 1’ of Now-Merged Company

The deal is closed.

Alaska Air Group Inc., the parent company of Alaska Airlines, announced this morning that it has completed its $1.9 billion acquisition of Hawaiian Holdings, the parent company of Hawaiian Airlines.

Hawaii shareholders, who approved the merger on Feb. 16, will receive $18 per share in cash as part of the deal, which includes $900 million in Hawaiian debt.

Alaska Air Group CEO Ben Minicucci said in a statement: “This is a historic day for Alaska Airlines as we officially partner with Hawaiian Airlines. Alaska and Hawaiian share tremendous pride in connecting communities with award-winning service, and we look forward to inviting more guests on board to experience what makes both brands unique.”

Peter Ingram stepped down as president and CEO of Hawaiian Airlines this morning after the transaction closed.

Joe Sprague, former Alaska Airlines regional president for Hawaii/Pacific, will take over as CEO of Hawaiian Airlines and lead the interim leadership team overseeing Hawaiian’s operations while Alaska applies for a single-aircraft operating certificate from the Federal Aviation Administration.

He shared his insights with the Star-Advertiser on what the “first day” of the merger looks like and said obtaining the sole operating certificate could take another 12 to 18 months.

In the meantime, the airlines will continue to operate as separate carriers with no immediate changes to operations. Sprague said integration of the separate websites, reservation systems and loyalty programs will occur later in the transition.

The aim is for the two airlines to eventually operate as one airline with an integrated passenger transport system, but he said both airlines will retain their own brand identities.

“This combination of completely bringing the two airlines together and keeping the two customer-focused brands separate and distinct has never been done before in the U.S. airline industry,” Sprague said. “There’s been a lot of planning and discussion about how we’re going to bring it together, but it’s so important because we believe so strongly in the strength and power of the Hawaiian Airlines brand.”

“It means so much to the people of Hawaii — both residents and employees of Hawaiian Airlines and the guests who fly Hawaiian Airlines, both those who live here in Hawaii and people from across the continent and elsewhere who love to come to Hawaii,” he said. “Hawaiian Airlines is a super popular brand for those types of travelers, so there’s a lot of power in that brand and we’re excited to keep it.”

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Sprague said employees at Hawaiian and Alaska were notified Tuesday that the U.S. Department of Transportation had approved the airlines to combine and operate international routes under a single certificate — permission required to provide air transportation as a merged airline.

He said the company expects to retain and grow Hawaiian’s approximately 6,000 union members, and that the airline will work with the unions to merge seniority. The combined airline will negotiate new joint collective bargaining agreements with its union members.

Sprague said the transition team, made up largely of Hawaiian executives, will meet with Hawaiian’s approximately 1,400 non-bargaining employees beginning Friday to update them on their employment status in the coming weeks.

He said redundancies have been identified, but the plan is to retain the vast majority of the 1,400 employees on an interim basis, which could last a year or more, or on a permanent basis for the long term.

Sprague said there will be a retention bonus for non-contracted employees who stayed until the deal is finalized, plus 90 days. He said Alaska is asking those whose positions are being cut to stay for 90 days. He said those who are laid off will receive severance pay and career counseling and career counseling services.

He said the combined airline will employ 33,000 people across North America, Asia and the Pacific.

Sprague said guests won’t see any significant changes immediately. Starting today, Alaska’s Mileage Plan and HawaiianMiles will retain their full value, and Alaska Lounge members and guests will be able to use the lounge when flying on Hawaiian Airlines.

In the coming weeks, customers will be able to transfer miles between their Alaska and Hawaiian loyalty accounts to redeem travel rewards. They will also soon be able to purchase tickets for flights on both airlines on both websites.

Hawaii residents will receive an email with a link to sign up for a free membership to a new travel program called Huaka’i by Hawaiian. Huaka’i members will receive 10% off one booking per quarter and a free checked bag when traveling between the islands.

Huaka’i members who are also Hawaiian Airlines World Elite Mastercard cardholders will receive 20% off one inter-island booking per quarter and their existing credit card benefit of two free checked bags.

In the coming months, customers will be able to earn Mileage Plan or HawaiianMiles miles when flying with either airline. Elite flyers flying with Alaska or Hawaiian will be able to link accounts so they have equal status with both airlines.

Beginning in early 2025, customers will be able to redeem Mileage Plan miles directly for all flights to Hawaii, including international destinations. Additionally, they will be able to combine Hawaii flights with flights to Alaska or partner flights when redeeming miles. In mid-2025, Alaska will share details about a new, unified loyalty program that combines the best of Mileage Plan and HawaiianMiles.

Sprague said he wasn’t sure yet about restructuring airline credit card agreements, which are part of broader loyalty programs. But he said he wanted to assure cardholders that their miles were safe.

According to Sprague, the top consumer questions since the merger process began in December 2023 have been whether they would be able to keep their miles and whether Hawaiian Airlines would continue to serve POG juice.

“The answer to both questions is yes, of course,” he said.

Alaska said the merger means that as of today, Alaska Air Group’s airlines and subsidiaries will “operate nearly 1,500 daily flights to more than 140 destinations, including 29 international markets in North and South America, Asia, Australia and the South Pacific.”

Sprague said that after the merger, Alaska will still be a distant fifth in size behind the “Big Four” U.S. airlines, including American, Delta, Southwest and United, which control more than 80% of the U.S. market.

“But it does allow us to compete more effectively with those major airlines,” he said. “It expands our global footprint to include the international flights that Hawaiian Airlines already operates in Asia and the Pacific. It brings together two incredibly good employee groups.”

Honolulu will become Alaska’s second-largest hub after Seattle. The extensive network will serve 1,200 destinations available through the oneworld alliance, which allows mileage holders to use their miles to travel with multiple brands.

According to Sprague, the merger with Hawaiian has resulted in the addition of widebody aircraft such as the 787 and A330. Alaska Air Group’s airlines and subsidiaries now operate a fleet of 350 aircraft, including two Boeing 787s, 24 Airbus A330s, 18 Airbus A321neos, 235 Boeing 737s, 19 Boeing 717s, 44 Embraer E175s and eight dedicated freighters (three Boeing 737-700s, two Boeing 737-800s and three Airbus A330s).