Alaska-Hawaiian merger clears DOT, must preserve rewards miles and routes

The Department of Transportation (DOT) has approved the merger between Alaska Airlines and Hawaiian Airlines, provided that both carriers agree to certain conditions such as the value of their rewards programs and preserve critical routes for customers.

For the first time, the DOT is requiring both airlines to agree to what it says are "binding, enforceable public-interest protections" to clear the merger.

This critical decision by the DOT was one of several hurdles the airlines had to overcome as they advanced plans to combine operations.

U.S. Transportation Secretary Pete Buttigieg said Tuesday that the department's "top priority is protecting the traveling public's best interest" during this process. 

ALASKA AIR, HAWAIIAN AIRLINES MERGER CLEARS DOJ HURDLE. WILL IT BENEFIT FLYERS?

"We have secured binding protections that maintain critical flight services for communities, ensure smaller airlines can access the Honolulu hub airport, lower costs for families and service members, and preserve the value of rewards miles against devaluation," Buttigieg said.

In July, both companies filed an application requesting that the DOT allow them to combine and operate international routes under one certificate.

ALASKA AIRLINES AND HAWAIIAN AIRLINES MERGER CLEARS REGULATORY HURDLE, WILL NOW BE REVIEWED BY DOT

The federal government is allowed to approve a transfer or grant an exemption if it is in the public interest. This includes preventing unfair, deceptive, predatory, or anticompetitive practices, the DOT said.

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However, by locking in the terms, the DOT said it is "establishing a more proactive approach" to the merger review process that prioritizes protecting the public interest from the outset. 

JetBlue and Spirit had similar intentions to merge, but those plans fell through earlier this year after a federal judge blocked the $3.8 billion deal due to antitrust concerns.