Hawaiian Airlines Gets New Leadership After Merger With Alaska Completes

Update: 11am

Alaska Air Group, the parent company of Alaska Airlines, today announced that Hawaiian Airlines Chairman and CEO Peter Ingram will step down immediately upon completion of its $1.9 billion transaction with Hawaiian Airlines, and an interim leadership team in Honolulu will direct the closing of the merger.

Joe Spurge, Alaska Airlines’ current regional president for Hawaiian/Pacific, will be named Hawaiian Airlines’ new CEO and will lead the interim leadership team overseeing Hawaiian’s operations as Alaska seeks its Individual Operating Certificate.

Until then, the airlines will operate as a single organization with separate airline operations, under separate operating certificates. After certification is granted, the airlines will operate as a single operation with two public-facing brands, Hawaiian Airlines and Alaska Airlines.

Sprague will oversee all aspects of Hawaiian Airlines’ operations until the FAA completes Alaska’s application for a single operating certificate — a process made possible by the U.S. Department of Transportation’s approval of the airlines’ request to consolidate and operate international routes under a single certificate.

“We have a unique, once-in-a-generation opportunity to bring together two great companies with aligned values ​​and a legacy of more than 90 years of serving and connecting communities,” Sprague said in a statement. “I am deeply honored to work alongside these strong leaders at Hawaiian Airlines to lead the company’s people, operations and brand through this transformation while maintaining our commitments to safety and service.”

Other key members of the Honolulu-based Hawaiian newspaper’s interim leadership team include:

>> Shannon Okinaka, Executive Vice President of Administration

>> Robin Kobayashi, Senior Vice President, Human Resources

>> Jim Landers, Senior Vice President, Technical Operations (Maintenance & Engineering, Flight Operations, System Operations Control Center)

>> Lokesh Amaranayaka, Vice President, Airport and Flight Operations

>> Terry Hill, Managing Director of Safety

>> Alyssa Onishi, Director of Brand and Culture

>> Daniel Chun, Regional Vice President, Alaska Airlines Hawaii

Hawaiian’s operational leaders, Bob Johnson, vice president of flight operations; Bo Tatsumura, vice president of maintenance and engineering; and Tom Zeng, vice president of business planning and services for technical operations, will continue to report to Jim Landers, vice president of maintenance and engineering at Hawaiian during this period. Justin Duane, vice president of labor and public relations at Hawaiian, will continue to support labor relations at Hawaiian.

Previous coverage

The proposed $1.9 billion merger between rival airlines Alaska and Hawaiian has cleared its final hurdle with the U.S. Department of Transportation announcing today that it has granted approval for the two airlines to combine and operate international routes under a single certificate — the license required to provide air transportation as a combined airline.

The approval, which includes protections for travelers, comes about a month after the U.S. Department of Justice ended its formal review period for the proposed merger under the Hart-Scott-Rodino Act. The Justice Department is enforcing Section 7 of the Clayton Act, which prohibits mergers and acquisitions that would substantially lessen competition or create a monopoly.

However, if the Department of Transportation had rejected the joint application filed by Alaska and Hawaiian on July 15, the two airlines would not have been able to unite.

When the U.S. Department of Transportation announced the merger today, it said in a statement that it had obtained “binding and enforceable public interest protections from Alaska Airlines and Hawaiian Airlines prior to the completion of the merger. The protections, which are necessary for the Department to consider the airlines’ required approvals, are intended to prevent harm to the traveling public, rural communities and smaller competing airlines.”

“Alaska and Hawaiian are committed to protecting the value of awards, maintaining current service on key Hawaiian routes to the continental United States and between islands, maintaining support for rural service, ensuring competitive access at Honolulu’s main airport, ensuring free family seats and compensation for controllable disruptions, and reducing costs for military families,” the DOT added.

“Our top priority is to protect the interests of travelers in this merger,” Transportation Secretary Pete Buttigieg said in a statement. “We have secured binding protections that preserve essential aviation services for communities, ensure smaller airlines can access Honolulu Airport, reduce costs for families and service members, and preserve the value of award miles against decline.” He added: “This more proactive approach to the merger review represents a new chapter in the Department of Transportation’s work to advocate for passengers and promote a fairer aviation sector in America.”

Key protections, according to the Department of Transportation, include:

>> There is no expiration period for HawaiianMiles and Alaska Mileage Plan miles earned prior to transferring to the new joint loyalty program.

>> Rewards members can transfer HawaiianMiles to and from Alaska Mileage Plan miles at a 1:1 ratio prior to the launch of the new joint loyalty program.

>> Under the new joint loyalty program, the participating airline must match and maintain the equivalent status levels that HawaiianMiles members enjoy under the HawaiianMiles program, and match and maintain the equivalent status levels and benefits granted to Alaska Mileage Plan.

>> The participating airline may not charge change or cancellation fees on award redemption tickets for travel on flights operated by the airline.

>> The joint venture airline must maintain strong levels of service for passenger and cargo service between important Hawaiian islands and for key routes between Hawaii and the continental United States that are at risk of losing competition.

>> The joint venture must maintain its support for essential air service to small rural communities in Alaska and Hawaii, where this service is a lifeline to health care, education, and economic well-being.

>> The two airlines will update their customer service plans to provide at least one free carry-on bag and at least two free checked bags for military personnel, their spouses and accompanying children. The two airlines will also waive change fees for military personnel and their families who reschedule their flights due to a military order or directive.

Hawaiian and Alaska are expected to complete the merger soon, which was approved by both companies’ boards of directors on Dec. 2. The process, which has included lawsuits and high-level federal and state reviews, has taken about nine months so far.

Hawaiian shareholders, who approved the merger on Feb. 16, will receive $18 a share in cash as part of the deal, which includes $900 million of Hawaiian’s debt. Hawaiian’s stock price was very close to that price this morning, suggesting investors have confidence the deal will work.

The deal is expected to boost Hawaiian’s financial performance, which has been hurt since at least the coronavirus outbreak. Hawaiian reported a second-quarter net loss of $1.30 per share, or $67.6 million, compared with a net loss of $12.3 million a year earlier. Adjusted for one-time costs, the second-quarter loss was $1.37 per share.

After the financial terms of the deal are completed, Alaska Air Group Inc., the parent company of Alaska Airlines, will also own and control Hawaiian. It remains unclear how the merger will impact Hawaiian’s 7,400 employees. Union members are expected to keep their jobs, however, the company’s senior leadership team is expected to undergo changes.

The Department of Transportation’s approval of the airlines’ joint application means the airlines may move forward with the merger under a single operating certificate issued by the Federal Aviation Administration.

In their filing, the airlines said they plan to retain “both the Alaska and Hawaiian brands, preserving consumer choice while offering seamless, integrated loyalty benefits and customer service.”

Hawaiian Airlines dates back to 1929. It is the state’s largest airline, offering about 150 daily inter-island flights and more than 230 systemwide. It offers direct flights between Hawaii and 16 major U.S. cities, as well as service to American Samoa, Australia, the Cook Islands, Japan, New Zealand, South Korea and Tahiti.

Alaska Airlines and its regional partners serve more than 120 destinations throughout the United States, Belize, Canada, Costa Rica, Mexico, the Bahamas and Guatemala.

The merger is expected to be completed quickly, and once it does, the combined airlines will serve “54.7 million passengers annually and operate to 138 destinations, including direct service to 29 major international destinations in the Americas, Asia, Australia and the South Pacific,” according to the joint implementation agreement.