Airline Passengers Sue Alaska Airlines Over Hawaiian Airlines Merger

Yet another airline merger is facing challenges. A group of eight consumers from Hawaii, California, Colorado, Pennsylvania and Washington are suing Alaska Airlines over its intended acquisition of Hawaiian Airlines. All of the plaintiffs are airline passengers and some are former travel agents.

In the lawsuit, filed April 15, the airline passengers claim the $1.9 billion acquisition violates the Clayton Antitrust Act, meaning “it may ‘substantially lessen competition or tend to create a monopoly’ in multiple markets in the passenger airlines industry.” The lawsuit also alleges that the merger could “threaten Hawaii’s economy and the well-being of Hawaii’s people.”

To that point, the complaint notes that air travel is the only realistic form of transportation to and from the state of Hawaii, and “healthy, stable and predictable airline capacity is absolutely essential to Hawaii’s economy and its residents.” Similarly, tourism makes up roughly 27 percent of Hawaii’s economy—equating to almost $20 billion in revenue. Airlines deliver over 9 million passengers to the state, who spent a total of $16 billion.

Upon announcement of the planned acquisition, the lines said in a joint statement: “The combined company will unlock more destinations for consumers and expand choice of critical air service options and access throughout the Pacific region, Continental United States and globally.” The airlines also promised increased union-represented jobs, investment in local communities, perpetuation of culture and sustainable initiatives as part of the combination.

In a similar situation, just last month, JetBlue and Spirit Airlines terminated their merger agreement as the companies were “unlikely” to meet the necessary legal and regulatory approvals. Previously, a federal judge in Boston ruled that JetBlue and American Airlines must end their “Northeast Alliance,” which the Department of Justice called a “de facto merger.” The complaint notes the former “example of a court striking down a similar acquisition” as support against the merger between Alaska and Hawaiian Airlines.

Alaska Airlines in a statement reported by Reuters called the lawsuit "a normal occurrence in public company mergers.”

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