Alaska Airlines and Hawaiian Airlines can go ahead with their planned merger but must maintain the value of their airline rewards systems and preserve several key routes, the U.S. Department of Transportation said Tuesday.
The $1.9 billion merger deal between the two airlines was approved by the U.S. Justice Department last month, putting it in the hands of the Transportation Department, which is also required to review airline mergers.
The DOT said airlines must ensure that miles earned in the HawaiianMiles and Alaska Mileage Plan programs prior to the creation of a new combined loyalty points system do not expire and can be transferred on a 1-to-1 basis.
They must also preserve “essential air support” for rural areas and maintain current levels of service for passenger and cargo routes between the Hawaiian Islands, U.S. Transportation Secretary Pete Buttigieg said at a news conference.
The Transportation Department said the airlines can begin the process of closing the merger, but still need approval of a transfer application, which would allow them to combine and operate international routes under a single certificate.
Hawaiian shares rose nearly 4% on Tuesday.
The two airlines said in December, when they announced their plans to merge, that they would retain each airline's branding but operate under a single platform, combining into a fleet of more than 360 aircraft serving more than 130 destinations.
Hawaiian must also adopt Alaska's practices of guaranteeing family seats without an additional charge and providing compensation if the airline causes significant flight delays or cancellations, the DOT said.
