Washington, D.C. — In response to news that Alaska Air Group has agreed to acquire rival Hawaiian Airlines for $1.9 billion, the American Economic Liberties Project released the following statement.

“There has never been an airline merger or acquisition that has not led to more power for the combined company to run roughshod over local communities, consumers, and workers across the country. The Alaska-Hawaiian deal is no different,” said William J. McGee, Senior Advisor for Airlines and Travel at the American Economic Liberties Project. “The current failures of our air travel industry are a direct result of consolidation, and further kneecapping competition would only add to the price increases, route closures, and layoffs that have characterized its recent history. The idea that the answer to harmful consolidation is more consolidation is wrong in the case of JetBlue-Spirit and wrong in the case of Alaska-Hawaiian.”

Alaska’s arguments in favor of its acquisition of Hawaiian do not address the real harms:

• As their names imply, these are two very different airlines with different business models. Hawaiian has been effectively serving the unique intra-state needs within the Islands since 1929 and its 7,360 employees and service are deeply rooted in Hawai`i, not Seattle.
• Head-to-head competition will suffer as well, since both carriers are vital players in connecting Hawai`i with the mainland United States, and both serve multiple routes along the West Coast. All the public relations spin in the world can’t change the fact that air travelers will be paying more to fly from the mainland to the 50th state.
• Alaska is a member of oneworld, one of the three global mega-alliances that have reduced competition, eliminated choice, and raised fares on routes worldwide through cross-border codesharing and marketing deals. This merger is not just about Alaska gaining access to Hawaiian’s base and routes; it’s also about further shrinking Pacific Rim competition for oneworld’s partners, including American Airlines, Cathay Pacific, Japan Airlines, Malaysia, and Qantas.
• A widespread argument in recent months is that mergers are the only antidote to bankruptcy, that Spirit or JetBlue or Hawaiian ultimately cannot survive without partnering. This speaks to the innate failures of America’s commercial aviation industry, one that taxpayers are continually forced to bail out. The twin failures of deregulation and consolidation have caused the current state of degradation and it’s absurd to suggest that more mergers are the answer. We have never had such a consolidated industry in its entire 109-year history, with so few scheduled passenger carriers (12), such consolidation at the top (the Big Four of American, Delta, Southwest, and United combine for 80% market share), and such a long period without new-entrants (14 years, 2007-2021).

Last year, AELP urged federal agencies to place a moratorium on all airline mergers until the harmful effects of 40 years of consolidation could be fully analyzed, including their effects on the resilience of the industry. This includes the cities that have lost service; the abandoned hubs; the canceled routes; the reductions in flight frequencies; the higher prices in markets without low fare competition; the hundreds of thousands of lay-offs; and the growing problem of regional inequality in cities and states from coast to coast. Now we are urging the U.S. Departments of Justice and Transportation to use their existing authority to block this deal, which will have far-reaching damaging effects.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.