Alaska Airlines announced Sunday that it plans to acquire Hawaiian Airlines in a $1.9 billion deal, signaling that U.S. industry airline consolidation has not fully run its course.

Alaska plans to acquire Hawaiian for $18 cash per share, a significant premium over the $4.86 per share at the Honolulu-based airline’s Dec. 1 closing stock price. Alaska Airlines Group, the parent company of the combined airlines, will maintain Alaska and Hawaiian as separate brands with a shared loyalty program and single operating platform.

Seattle-based Alaska operates daily nonstop flights from PIT to Seattle. The merger, if approved, would provide additional connectivity to Hawaii and beyond through Alaska’s Seattle hub.

The merger is expected to create the nation’s fifth-largest airline—excluding JetBlue’s proposed merger with Spirit Airlines—with a fleet of 365 Airbus, Boeing and Embraer narrowbody and widebody airplanes, plus another 119 aircraft on firm order, flying to 138 destinations across North America, Asia, Australia and the South Pacific.

“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 Hawaii travelers,” said Ben Minicucci, Alaska Airlines CEO, in a statement. “We look forward to deepening this stewardship as our airlines come together, while providing unmatched value to customers, employees, communities and owners.”

The combined carriers promise to unlock more destinations for travelers and expand access throughout the Pacific region, continental U.S. and globally. The merger also seeks 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,” according to Alaska’s release.

A Hawaiian Airlines Airbus A330-200 takes off from Las Vegas Harry Reid International Airport on Nov. 6, 2022. (Photo by Evan Dougherty)

Honolulu will become a key strategic hub for the combined airlines with expanded service for residents of Hawaii to the continental U.S. In addition, Honolulu will create new international connections to Asia and throughout the Pacific for travelers across the U.S.

As part of the agreement, Hawaiian Airlines will also join the Oneworld Alliance as a full member airline. The Oneworld Alliance, which already includes major carriers such as Alaska, American Airlines and British Airways, is comprised of 13 carriers with service to more than 900 destinations across 170 territories worldwide.

“In Alaska Airlines, we are joining an airline that has long served Hawaii, and has a complementary network and a shared culture of service,” said Hawaiian Airlines President and CEO Peter Ingram in a statement. “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.”

Alaska Airlines will seek acquisition approval from Hawaiian Airlines shareholders in the first quarter of 2024. Pending approval from the U.S. Justice Department, the agreement is expected to close no later than June 2025.

It remains unclear if the Justice Department will seek to challenge the Alaska-Hawaiian merger via litigation. The department is currently challenging JetBlue Airways’ $3.8 billion merger agreement with ultra-low-cost carrier Spirit Airlines over antitrust concerns.

Closing arguments of the trial for that merger are scheduled to take place Tuesday and a final decision from a Boston federal judge is expected to occur before the end of 2023.