Alaska Airlines agrees to buy Hawaiian Airlines in $1.9 billion deal

Alaska Airlines has agreed to acquire rival Hawaiian Airlines in a $1.9 billion deal as the carriers make a push to expand along the West Coast.

Alaska would pay $18 a share for Hawaiian and the acquisition includes $900 million of Hawaiian’s debt, the companies said Sunday. Shares of Hawaiian Airlines closed on Friday at $4.86, giving the company a market cap of about $250 million. They are down nearly 53% so far this year, due in part to a downturn in travel to Maui following the wildfires in August.

“What we saw here was a unique opportunity in time at the valuation that we saw Hawaiian at,” said Shane Tackett, Alaska Airlines’ CFO, in an interview. He said the deal would also enable the combined companies to become a “market leader” in the premium-travel Hawaii market.

“We didn’t view this as an opportunity that we should let pass because it may not come again in our careers,” Tackett said.

The airlines said they expect the transaction to close in 12 to 18 months, if regulators approve the deal. President Joe Biden’s Justice Department has taken a hard stance against combinations it views as anticompetitive and has sued to block JetBlue Airways‘ proposed acquisition of discount carrier Spirit Airlines. A trial is expected to wrap up in the coming days.

The combined company will be based in Seattle, where Alaska Airlines is headquartered, and led by its CEO, Ben Minicucci.

The two airlines said they will keep each carrier’s brand but operate under a single platform, combining into a 365-airplane fleet covering 138 destinations.

The deal comes seven years after Alaska Airlines acquired Virgin America in a deal valued at about $4 billion. Alaska operates Boeing 737s and has spent years whittling down Virgin’s fleet of Airbus planes to streamline its…