Analyst: Hawaiian Air acquisition comes after rocky period for company
HONOLULU (HawaiiNewsNow) - Aviation analyst Peter Forman says the Hawaiian Airlines merger with Alaska Airlines comes after a rocky period for Hawaiian.
Hawaiian Air is still recovering from technical breakdowns earlier this year — while Alaska Airlines is looking to expand its international offerings.
“They’re formidable airlines. So I think it gives them a much better standing in the long term growth and survival in this really tough business,” Forman said.
It’s been a tough year for Hawaiian Airlines.
After 18 years as the No. 1 airline for on-time performance, it fell to no. 5 in 2022.
And earlier this year, system upgrades caused massive meltdowns that delayed flights and stranded hundreds of customers.
“Alaska will come in and they will fix the things that are broken and maintain the things that are right ... which is maintaining that individual identity to and from Hawaii,” Forman said.
“The best safety record of any airline, and really attractive reputation as far as the airline to fly when you want to come to Hawaii.”
Forman expects some concern about how Alaska will handle redundancies in the acquisition, but believes the carriers complement each other’s strengths.
“So much of Hawaiian’s strength Is the International flying, they need wide-body airplanes.
“Alaska doesn’t have that. So they really are depending upon Hawaiian, its airplanes and crews to do the vast majority of the heavy lifting,” Forman said.
Meanwhile, Forman said, Alaska has Boeing 737s. “So you’re going to see that airplane, in the long run, integrate into maybe inter-island or some of the shorter runs.”
Forman says Alaska’s offer of $18 a share is nearly four times the value of Hawaiian’s, an indication it’s undervalued. “Their stock price has been low over the last five years because of variety things that have happened — fare wars interIsland and that type of thing,” he explained. “If Alaska is paying that much for it, they have big plans for the airline.”
Forman added that Southwest sees Hawaiian as a smaller airline that would break in fare wars.
“Now with the financial backing of Alaska Air Group, it’s no longer one big airline and a small airline. It’s two big airlines against each other so it’s a much more even playing field now,” he said.
Forman added customers shouldn’t expect anything to happen right away.
“It’s going to be a very slow process and it’s mostly going to be things happening behind the scenes, but remember, they’re still very much competition,” he said.
Upgrades to technology and aircraft can help both carriers better compete, but while those changes are on the radar, the merger itself could take up to 18 months to complete.
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