- Combined company to maintain Alaska Airlines' and Hawaiian
Airlines' strong, high-quality brands, supported by a single,
compelling loyalty offering.
- Expands fifth largest U.S. airline to a fleet of 365 narrow
and wide body airplanes enabling guests to reach 138 destinations
through our combined networks and more than 1,200 destinations
through the oneworld Alliance.
- Honolulu to become a key
hub for the combined airline with expanded service for residents of
Hawai'i to the Continental U.S. and creating new connections to
Asia and throughout the Pacific
for travelers across the U.S.
- Commitment to Hawai'i remains steadfast, including
maintaining robust Neighbor Island air service, and a more
competitive platform to support growth, job opportunities for
employees, community investment and environmental
stewardship.
- Committed to maintaining and growing union-represented
workforce in Hawai'i.
- Combination will result in immediate value creation with
sizable upside. All-cash transaction of $18 per share offers attractive premium for
Hawaiian Airlines shareholders and is expected to be accretive to
Alaska's earnings within two years
post-close with at least $235 million
of expected run-rate synergies.
- Investor conference call scheduled for today at 5:00 p.m. ET / 2:00 p.m.
PT / 12:00 p.m. HT.
SEATTLE and HONOLULU, Dec. 3, 2023
/PRNewswire/ -- Alaska Air Group, Inc. (NYSE: ALK), and
Hawaiian Holdings, Inc. (NASDAQ: HA) today announced that they have
entered into a definitive agreement under which Alaska Airlines
will acquire Hawaiian Airlines for $18.00 per share in cash, for a transaction value
of approximately $1.9 billion,
inclusive of $0.9 billion of Hawaiian
Airlines net debt. 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 transaction is expected
to enable a stronger platform for growth and competition in the
U.S., as well as long-term job opportunities for employees,
continued investment in local communities and environmental
stewardship.
As airlines rooted in the 49th and 50th
U.S. states, which are uniquely reliant upon air travel, Alaska
Airlines and Hawaiian Airlines share a deep commitment to caring
for their employees, guests and communities. This combination will
build on the 90+ year legacies and cultures of these two
service-oriented airlines, preserve both beloved brands on a single
operating platform, and protect and grow union-represented jobs and
economic development opportunities in Hawai'i, with a combined
network that will provide more options and added international
connectivity for travelers through airline partners including, the
oneworld Alliance.
"This combination is an exciting next step in our collective
journey to provide a better travel experience for our
guests and expand options for West Coast and Hawai'i
travelers," said Ben Minicucci,
Alaska Airlines CEO. "We have a longstanding and deep respect for
Hawaiian Airlines, for their role as a top employer in Hawai'i, and
for how their brand and people carry the warm culture of aloha
around the globe. Our two airlines are powered by incredible
employees, with 90+ year legacies and values grounded in caring for
the special places and people that we serve. I am grateful to the
more than 23,000 Alaska Airlines employees who are proud to have
served Hawai'i for over 16 years, and we are fully committed to
investing in the communities of Hawai'i and maintaining robust
Neighbor Island service that Hawaiian Airlines travelers have
come to expect. We look forward to deepening this stewardship as
our airlines come together, while providing unmatched value to
customers, employees, communities and owners."
"Since 1929, Hawaiian Airlines has been an integral part of life
in Hawai'i, and together with Alaska Airlines we will be able to
deliver more for our guests, employees and the communities that we
serve," said Peter Ingram, Hawaiian
Airlines President and CEO. "In Alaska Airlines, we are joining an
airline that has long served Hawai'i, and has a complementary
network and a shared culture of service. With the additional scale
and resources that this transaction with Alaska Airlines brings, we
will be able to accelerate investments in our guest experience and
technology, while maintaining the Hawaiian Airlines brand. We are
also pleased to deliver significant, immediate and compelling value
to our shareholders through this all-cash transaction. Together,
Hawaiian Airlines and Alaska Airlines can bring our authentic
brands of hospitality to more of the world while continuing to
serve our valued local communities."
Complementary Networks and Greater Choice for Alaska Airlines
and Hawaiian Airlines' Combined 54.7 million Annual
Passengers
The combination of complementary domestic, international, and
cargo networks is positioned to enhance competition and expand
choice for consumers on the West Coast and throughout the Hawaiian
Islands through:
- Preserving outstanding brands: The combined
airline will maintain both industry-leading Alaska Airlines and
Hawaiian Airlines brands while integrating into a single operating
platform, enabling the remarkable service and hospitality of each
to be enjoyed by passengers with continued excellence in
operational reliability, trust and guest satisfaction for which
both companies have been consistently recognized.
- An enhanced product offering for a wide range of
consumers: The combination preserves and expands
high-quality, best-in-class product offerings with price points to
make air travel accessible to a wide range of consumers across a
range of cabin classes, including greater choice between Alaska
Airlines' high-value, low-fare options and Hawaiian Airlines'
international and long-haul product on par with network
carriers.
- Complementary networks expand travel options:
Passengers traveling throughout the Continental U.S., U.S. West
Coast and across the Pacific will benefit from more choice and
increased connectivity across both airlines' networks, with service
to 138 destinations including non-stop service to 29 top
international destinations in the Americas, Asia, Australia and the South Pacific, and combined
access to over 1,200 destinations through the oneworld
Alliance.
- Expanded service for Hawai'i: For Hawai'i
residents, the combination will expand service and convenience by
tripling the number of destinations throughout North America that can be reached nonstop or
one stop from the Islands, while maintaining robust Neighbor Island
service and increasing air cargo capacity.
- Strategic Honolulu
hub: Honolulu will become
a key Alaska Airlines hub, enabling greater international
connectivity for West Coast travelers throughout the Asia-Pacific region with one-stop service
through Hawai'i.
- Increased loyalty program benefits: The
transaction will connect Hawaiian Airlines' loyalty members with
enhanced benefits through an industry-leading loyalty program for
the combined airline, including the ability to earn and redeem
miles on 29 global partners and receive elite benefits on the full
complement of oneworld Alliance airlines, expanded global
lounge access and benefits of the combined program's co-brand
credit card.
Delivering Substantial Benefits for Employees and Communities
in Hawai'i
As one of Hawai'i's largest employers, Hawaiian Airlines has a
long legacy of commitment to its employees, who shaped the company
over its 94-year history, and to local communities, culture, and
the natural environment. As an integrated company, Alaska Airlines
and Hawaiian Airlines will continue this stewardship and maintain a
strong presence and investment in Hawai'i. The combined company
will drive:
- Growth in union-represented jobs: Maintain and
grow union-represented jobs in Hawai'i, including preserving pilot,
flight attendant, and maintenance bases in Honolulu and airport operations and cargo
throughout the state.
- Strong operational presence: Maintain a strong
operations presence with local leadership and a regional
headquarters in Hawai'i to support the combined airlines'
network.
- Opportunities for employees: Provide more
opportunities for career advancement, competitive pay and benefits,
and geographic mobility for employees.
- Expansion of workforce development initiatives:
Continue and expand access to workforce development initiatives,
including Hawaiian Airlines' partnership with the Honolulu Community College Aeronautics Maintenance
Technology Program and Alaska Airlines' Ascend Pilot Academy among
others, to support future jobs and career opportunities in Hawai'i
and beyond.
- Investment in local communities: Continue to
invest in Hawai'i communities, combining and expanding the two
airlines' commitments, and work with local communities and
government to build a vibrant future for Hawai'i.
- Perpetuation of culture: Committed to promoting
regenerative tourism in the Hawaiian Islands and investing in
Hawaiian language and culture, continuing and building upon
Hawaiian Airlines' existing programs.
Becoming an Even More Sustainable Combined Airline
Alaska Airlines is committed to building upon both Alaska
Airlines' and Hawaiian Airlines' strong commitments to
environmental stewardship, including Alaska Airlines' five-part
path to net zero by 2040 and sustainability goals in areas of
carbon emissions and fuel efficiency, waste, and healthy
ecosystems. In 2022, Alaska Airlines made its largest Boeing fleet
order in its 90-year history, focused on the Boeing 737-MAX
aircraft, which are 25% more fuel-efficient on a seat-by-seat basis
than the aircraft they replace, and continued to expand use of
route optimization software to help dispatchers develop routes that
save fuel, time, and emissions. Both airlines are actively working
to advance the market for sustainable aviation fuel (SAF) in their
respective geographies. These climate-focused efforts will
continue, including continued investment in local
sourcing.
Compelling Strategic and Financial Rationale, Generating
Outsized Value Creation
The combination fits strategically with Alaska Airlines'
sustained focus on expanding options for West Coast travelers and
creates an important new platform to further enhance Alaska
Airlines' above industry-average organic growth. The transaction is
designed to deliver attractive value creation for Alaska Airlines'
shareholders while providing a compelling premium for Hawaiian
Airlines shareholders.
- All-cash transaction of $18.00
per share for a total equity value of $1.0
billion provides a compelling premium for Hawaiian Airlines
shareholders.
- Transaction multiple of 0.7 times revenue, approximately one
third the average of recent airline transactions.
- Approximately $235 million of
expected run-rate synergies reflect a conservative estimate of the
transaction's synergy potential; these exclude other identified
upside opportunities that could be realized.
- Expected to generate high single digit earnings accretion for
Alaska Airlines within the first two years (high-teens three+
years) post-close and mid-teens ROIC by year three, excluding
integration costs, with returns above Alaska Airlines' cost of
capital.
- No anticipated material impact on long-term balance sheet
metrics, with return to target leverage levels expected within 24
months.
Conditions to Close
The transaction agreement has been approved by both boards. The
acquisition is conditioned on required regulatory approvals,
approval by Hawaiian Holdings, Inc. shareholders (which is
expected to be sought in the first quarter of 2024), and other
customary closing conditions. It is expected to close in 12-18
months. The combined organization will be based in Seattle under the leadership of Alaska
Airlines CEO Ben Minicucci. A
dedicated leadership team will be established to focus on
integration planning.
Advisors
BofA Securities and PJT Partners are
serving as financial advisors and O'Melveny & Myers LLP is
serving as legal advisor to Alaska Airlines. Barclays is serving as
financial advisor and Wilson Sonsini
Goodrich & Rosati, Professional Corporation is serving
as legal advisor to Hawaiian Airlines.
Microsite and Multimedia Assets
Additional information
about the transaction is available at a new joint website at
localcareglobalreach.com and investor materials can also be found
at investor.alaskaair.com and news.alaskaair.com.
INVESTOR CONFERENCE CALL AND PRESS
CONFERENCE
Alaska Airlines and Hawaiian Airlines
executives will discuss the transaction on a conference call. An
investor presentation about the transaction will be referenced on
the conference call and is being posted on the joint website
referenced above.
Alaska Airlines and Hawaiian Airlines will be joined by local
leaders at a joint press conference in Honolulu today, December 3, 2023, at 3:00
p.m. Hawai'i Standard time.
About Alaska Airlines
Alaska Airlines and our
regional partners serve more than 120 destinations across
the United States, Belize, Canada, Costa
Rica and Mexico with new
service to the Bahamas and
Guatemala beginning in December.
We strive to be the most caring airline with award-winning customer
service and an industry-leading loyalty program. As a member of the
oneworld Alliance, and with our additional global partners,
our guests can travel to more than 1,200 destinations on 29
airlines while earning and redeeming miles on flights to locations
around the world. Learn more about Alaska at news.alaskaair.com and follow
@alaskaairnews for news and stories. Alaska Airlines and
Horizon Air are subsidiaries of Alaska Air Group.
About Hawaiian Airlines
Now in its 95th year of
continuous service, Hawaiian is Hawaiʻi's biggest and
longest-serving airline. Hawaiian offers approximately 150 daily
flights within the Hawaiian Islands, and nonstop flights between
Hawaiʻi and 15 U.S. gateway cities – more than any other airline –
as well as service connecting Honolulu and American Samoa, Australia, Cook
Islands, Japan,
New Zealand, South Korea and Tahiti.
Consumer surveys by Condé Nast Traveler and TripAdvisor have
placed Hawaiian among the top of all domestic airlines serving
Hawaiʻi. The carrier was named Hawaiʻi's best employer by Forbes in
2022 and has topped Travel + Leisure's World's Best list as the No.
1 U.S. airline for the past two years. Hawaiian has also led all
U.S. carriers in on-time performance for 18 consecutive years
(2004-2021) as reported by the U.S. Department of
Transportation.
The airline is committed to connecting people with aloha. As
Hawai'i's hometown airline, Hawaiian encourages guests to Travel
Pono and experience the islands safely and respectfully.
Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings,
Inc. (NASDAQ: HA). Additional information is available at
HawaiianAirlines.com. Follow Hawaiian's Twitter updates
(@HawaiianAir), become a fan on Facebook (Hawaiian Airlines), and
follow us on Instagram (hawaiianairlines). For career postings and
updates, follow Hawaiian's LinkedIn page.
Forward-Looking Statements
This communication contains forward-looking statements subject
to the safe harbor protection provided by the federal securities
laws, including statements relating to the expected timing of the
closing of the pending acquisition (the "Transaction") of Hawaiian
Holdings Inc. ("Hawaiian Holdings") by Alaska Air Group, Inc.
("Alaska Air Group"); considerations taken into account by Alaska
Air Group's and Hawaiian Holdings' Boards of Directors in approving
the Transaction; and expectations for Alaska Air Group and Hawaiian
Holdings following the closing of the Transaction. There can be no
assurance that the Transaction will in fact be consummated. Risks
and uncertainties that could cause actual results to differ
materially from those indicated in the forward-looking statements
include: the possibility that Hawaiian Holdings shareholders may
not approve the adoption of the merger agreement; the risk that a
condition to closing of the Transaction may not be satisfied (or
waived); the ability of each party to consummate the Transaction;
that either party may terminate the merger agreement or that the
closing of the Transaction might be delayed or not occur at all;
possible disruption related to the Transaction to Alaska Air
Group's or Hawaiian Holding's current plans or operations,
including through the loss of customers and employees; the
diversion of management time and attention from ongoing business
operations and opportunities; the response of competitors to the
Transaction; a failure to (or delay in) receiving the required
regulatory clearances for the Transaction; uncertainties regarding
Alaska Air Group's ability to successfully integrate the operations
of Hawaiian Holdings and Alaska Air Group and the time and cost to
do so; the outcome of any legal proceedings that could be
instituted against Hawaiian Holdings, Alaska Air Group or others
relating to the Transaction; Alaska Air Group's ability to realize
anticipated cost savings, synergies or growth from the Transaction
in the timeframe expected or at all; legislative, regulatory and
economic developments affecting the business of Alaska Air Group
and Hawaiian Holdings; general economic conditions including those
associated with pandemic recovery; the possibility and severity of
catastrophic events, including but not limited to, pandemics,
natural disasters, acts of terrorism or outbreak of war or
hostilities; and other risks and uncertainties detailed in periodic
reports that Alaska Air Group and Hawaiian Holdings file with the
Securities and Exchange Commission ("SEC"). All forward-looking
statements in this communication are based on information available
to Alaska Air Group and Hawaiian Holdings as of the date of this
communication. Alaska Air Group and Hawaiian Holdings each
expressly disclaim any obligation to publicly update or revise the
forward-looking statements, except as required by law.
Additional Information and Where to Find It
Hawaiian Holdings, its directors and certain executive officers
are participants in the solicitation of proxies from stockholders
in connection with the Transaction. Hawaiian Holdings plans to file
a proxy statement (the "Transaction Proxy Statement") with the SEC
in connection with the solicitation of proxies to approve the
Transaction.
Daniel W. Akins, Wendy A. Beck, Earl E.
Fry, Lawrence S. Hershfield,
C. Jayne Hrdlicka, Peter R. Ingram, Michael
E. McNamara, Crystal K. Rose,
Mark D. Schneider, Craig E. Vosburg, Duane
E. Woerth and Richard N.
Zwern, all of whom are members of Hawaiian Holdings' board
of directors, and Shannon L.
Okinaka, Hawaiian Holdings' chief financial officer, are
participants in Hawaiian Holdings' solicitation. None of such
participants owns in excess of one percent of Hawaiian Holdings'
common stock. Additional information regarding such participants,
including their direct or indirect interests, by security holdings
or otherwise, will be included in the Transaction Proxy Statement
and other relevant documents to be filed with the SEC in connection
with the Transaction. Please refer to the information relating to
the foregoing (other than for Messrs. Akins and Woerth) under the
caption "Security Ownership of Certain Beneficial Owners and
Management" in Hawaiian Holdings' definitive proxy statement for
its 2023 annual meeting of stockholders (the "2023 Proxy
Statement"), which was filed with the SEC on April 5, 2023 and is available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/1172222/000117222223000022/ha-20230405.htm#i2d8a68908cc64c37bbeca80e509abb72_31.
Since the filing of the 2023 Proxy Statement, (a) each director
(other than Mr. Ingram) received a grant of 13,990 restricted stock
units that will vest upon the earlier of (i) the day prior to
Hawaiian Holdings' 2024 annual meeting of stockholders or (ii) a
change in control of Hawaiian Holdings; (b) Mr. Ingram received a
grant of 163,755 restricted stock units; and (c) Ms. Okinaka
received a grant of 57,314 restricted stock units. In the
Transaction, equity awards held by Mr. Ingram and Ms. Okinaka will
be treated in accordance with their respective severance and change
in control agreements. As of December 1, 2023, Mr. Ingram
beneficially owns 340,964 shares and Ms. Okinaka beneficially owns
86,903 shares. The 2023 proxy statement, under the caption
"Executive Compensation—Potential Payments Upon Termination or
Change in Control," contains certain illustrative information on
the payments that may be owed to Mr. Ingram and Ms. Okinaka in a
change of control of Hawaiian Holdings. As of December 1, 2023, (a)
Mr. Woerth beneficially owns 37,389 shares and (b)Mr. Akins
beneficially owns no shares. Mr. Akins received a grant of 13,990
restricted stock units that will vest upon the earlier of (a) the
day prior to Hawaiian Holdings' 2024 annual meeting of stockholders
or (b) a change of control.
Promptly after filing the definitive Transaction Proxy Statement
with the SEC, Hawaiian Holdings will mail the definitive
Transaction Proxy Statement and a WHITE proxy card to each
stockholder entitled to vote at the special meeting to consider the
Transaction. STOCKHOLDERS ARE URGED TO READ THE TRANSACTION PROXY
STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY
OTHER RELEVANT DOCUMENTS THAT HAWAIIAN HOLDINGS WILL FILE WITH THE
SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Stockholders may obtain, free of charge, the
preliminary and definitive versions of the Transaction Proxy
Statement, any amendments or supplements thereto, and any other
relevant documents filed by Hawaiian Holdings with the SEC in
connection with the Transaction at the SEC's website
(http://www.sec.gov). Copies of Hawaiian Holdings' definitive
Transaction Proxy Statement, any amendments or supplements thereto,
and any other relevant documents filed by Hawaiian Holdings with
the SEC in connection with the Transaction will also be available,
free of charge, at Hawaiian Holdings' investor relations website
(https://newsroom.hawaiianairlines.com/investor-relations), or by
writing to Hawaiian Holdings Inc., Attention: Investor Relations,
P.O. Box 30008, Honolulu, HI
96820.
View original
content:https://www.prnewswire.com/news-releases/alaska-airlines-and-hawaiian-airlines-to-combine-expanding-benefits-and-choice-for-travelers-throughout-hawaii-and-the-west-coast-302003943.html
SOURCE Alaska Airlines and Hawaiian Airlines