SAN FRANCISCO (KGO) -- Alaska Airlines announced Sunday they will buy Hawaiian Airlines in a $1.9 billion deal.
"Alaska wants to grow and needs to grow and Hawaiian needs to find a way to accelerate its growth, so this merger would help both with that objective," said Henry Harteveldt who is president of the travel industry consulting firm Atmosphere Research Group. He talked about the routes currently flown by each airline, something that was discussed on a conference call with executives Sunday.
"The airlines have 433 routes, of which, only 12 overlap. Now ,the concern I do have is immediate here in the Bay Area -- where both Hawaiian and Alaska fly between Bay Area airports and Hawaii, that would take out a competitor," Harteveldt said.
Katy Nastro from Going.com believes overlapping routes between the two is a big concern going forward.
"A merger of this size, whose route maps overlap a little bit, would result in -- not anymore cheap flights for consumers -- but fewer cheap flights for consumers. As a consumer, we actually want competition. Airlines don't want competition with each other. They want to be the only one flying on specific routes, because they can then set the prices," Nastro says.
Harteveldt believes that another major carrier would then come in to fill the spot.
"When one airline leaves, another airline will try to enter, so I think you will see competition sustained between Alaska and Hawaii," he said.
The deal still needs to be approved by shareholders and the government. If that happens, Alaska Air says their fleet will grow from 300 airplanes to 365 planes, making it the 5th largest airline in the country. They go on to say that Honolulu would become a key hub for expanded service to Asia and other locations in the Pacific.
"Hawaiian Airlines actually has a fairly expansive Trans-Pacific network out of it's hub in Honolulu. They fly to Asia and the South Pacific, so this could mean more Trans-Pacific competition, which could benefit travelers from the Bay Area," Harteveldt said.
The process to try and approve this deal is likely to last anywhere between nine and 18 months. Any possible changes would not affect travelers until an approval.
Even with an approval, the companies say they will continue to operate under the Alaska and Hawaiian Airlines names.
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