Alaska Airlines CEO Doubles Down on Hawaiian Merger, Bets Big on Joint Loyalty Program

MKT 2310 737 MAX 9 air2air 005

Skift Take

In his first public comments since the merger was announced, Alaska CEO Ben Minicucci expressed confidence that the deal would pass regulatory hurdles.

Alaska Airlines CEO Ben Minicucci has called the decision to block the JetBlue-Spirit merger a “positive” — because it now sets the stage for its merger with Hawaiian Airlines. 

“I think the judge was clear in saying that he’s blocking the deal because of the elimination of an ultra-low-cost carrier that has benefit to consumers in the country,” Minicucci said at the JPMorgan Industrials conference in New York on Tuesday.

“In our deal, it’s nowhere near that. Our deal is completely different. We’re actually the low-cost, low-fare airline acquiring Hawaiian.”

Minicucci’s Case for the Alaska-Hawaiian Merger

In his first public comments on the proposed partnership since it was announced in December, the Alaska CEO expressed confidence that the Hawaiian merger wouldn’t face the same fate as JetBlue-Spirit when it lands on the Justice Department’s desk. 

Minicucci said the two carriers have minimal overlap on routes and that Alaska has done “a lot of work in the diligence process,” including winning support for the merger from the mayors of Hawaii’s big four islands. 

“The other benefit for us is we become a little bit of a bigger carrier, but we have a few more arrows in our quiver with international capability now that’s possible out of Seattle, which again provides more competition against Delta and other carriers,” Minicucci said at the conference.

He also said the merger would allow the combined airline to better compete with the Big Four carriers — American, Delta, United and Southwest, pointing to how they dominate 23 out of the 25 top travel markets in the U.S. (save for Seattle and Honolulu). 

“This was a play for us to say, now we can get relevance and two of the top 25 markets and actually do something pretty unique,” he said.  

Hawaiian shareholders approved the merger in February, but it’s unclear when the DOJ will announce a decision. Minicucci said Alaska is set to give the DOJ more information on the deal by May, adding that it expects to learn more on the timeframe of a decision in June. 

“We have their support,” Minicucci said. “It’s hard to say that there’s a lot of negative with what we’re trying to do. I think the 49th and 50th state, there’s so many similarities in terms of serving remote communities.” 

Big Ambitions for a Joint Alaska-Hawaiian Loyalty Program

When Alaska announced that it planned to merge with Hawaiian, it said the two airlines would maintain their distinct identities but operate under an umbrella group. That meant even Alaska’s and Hawaiian’s frequent flier programs would be combined, forming a loyalty platform that’s almost similar to Marriott Bonvoy. 

However, Minicucci said the combined company would not operate like IAG, which owns British Airways, Iberia and Aer Lingus — where each airline maintains its own identity, operations and frequent flier program. 

“It’s not an IAG type,” he said. “This is one set of labor rules, like one pilot group, one flight attendant group, one mechanic group, one operating certificate, our people can fly and work on different airplanes — but the branding is going to be different.”

Minicucci added that Alaska is currently working to “extract more” from its loyalty program and expects to see more gains once it’s combined with Hawaiian’s. He currently forecasts Alaska’s standalone loyalty program to generate around $80 million in revenue.

“We believe there’s a big opportunity for us and for Hawaiians to have one loyalty card in their wallet for their one-stop needs to take them out of continental U.S. and also internationally with our 25 global partners that we have partnerships with,” he said. 

Source link

About The Author

Scroll to Top