DOT Approves Alaska and Hawaiian Airlines Merger with 1:1 Transfer Ratio Between Programs

DOT Approves Alaska and Hawaiian Airlines Merger

The U.S. Department of Transportation (DOT) approved today the planned merger of Alaska Airlines and Hawaiian Airlines. The $1.9 billion merger agreement cleared the U.S. Justice Department’s review last month.

The DOT approval comes with several key requirements, such as maintaining the value of their airline reward systems and preserving several key routes. That means that the airlines must offer a 1:1 transfer ratio between the two programs.

This is good news for those who have HawaiianMiles, or those that can apply for Hawaiian Airlines cards, or transfer points to HawaiianMiles. You can currently get 70,000 miles with the personal Hawaiian Airlines card after just one purchase.

Here’s what the DOT says in its press release:

• Protecting the value of rewards: Alaska and Hawaiian agreed to the first-ever rewards protections against devaluation that ensure that consumers will receive the rewards, benefits, and status they have earned. Specific rewards protections include:  
  • No expiration for miles earned under current programs: All HawaiianMiles miles and Alaska Mileage Plan miles earned prior to conversion into the new combined loyalty program must not expire.  
     
  • Transfer miles at 1:1 ratio: Rewards members can transfer HawaiianMiles miles to and from Alaska Mileage Plan miles at a 1:1 ratio prior to the launch of the new combined loyalty program. Each outstanding HawaiianMiles and Alaska Mileage Plan mile must be converted into a mile in the new loyalty program at a 1:1 ratio, resulting in all members having the same number of miles before and after conversion.
     
  • Maintain value of miles: The combined airline must not take any actions that would devalue HawaiianMiles miles, must maintain the value of each unredeemed HawaiianMiles mile earned prior to the merger closing, must honor all active HawaiianMiles promotions from prior to the merger closing, and must continue to award HawaiianMiles miles at the same or greater value. The combined airline must maintain a minimum dollar value for all miles in the new loyalty program, measured by the guest-facing value of miles redeemed for carrier-operated flights.
     
  • Match, maintain, or increase status: Under the new combined loyalty program, the combined airline must match and maintain the equivalent status levels that HawaiianMiles members hold under the HawaiianMiles program, match and maintain status levels and conferred benefits that are equivalent to Alaska’s Mileage Plan program, and match or increase status and conferred benefits as necessary to ensure members of each existing loyalty program are treated no less favorably relative to status, including by matching or increasing members’ elite status in the new combined loyalty program, for the remainder of the applicable program year.
     
  • No new junk fees: The combined airline must not impose change or cancellation fees on rewards redemption tickets for travel on carrier-operated flights.  
     
• Maintaining critical inter-island and continental routes: Hawaii’s rural island communities are uniquely dependent on the passenger and cargo services provided by Hawaiian Airlines. The combined airline must maintain robust levels of service for critical Hawaiian inter-island passenger and cargo service and for the key routes between Hawaii and the continental United States at risk of a loss of competition. 
   
• Preserving support for essential air service in Alaska and Hawaii: The combined airline must preserve its support for Essential Air Service in Alaska’s and Hawaii’s small, rural communities where such service is a lifeline to health care, education, and economic well-being. 
   
• Ensuring competitive access to Honolulu hub airport: The combined airline is barred from directly or indirectly taking actions that would discriminate against new airline entrants or smaller competitors’ access to airport infrastructure as part of new or existing investments at the Daniel K. Inouye International Airport in Honolulu, a key vacation destination and hub for the State of Hawaii. 
   
• Guaranteeing fee-free family seating: Hawaiian Airlines must join Alaska Airlines in guaranteeing adjacent seats for children 13 or under and an accompanying adult at no additional cost for all fare types.  
   
• Providing alternative compensation for delays and cancellations caused by the airline: Hawaiian Airlines must join Alaska Airlines in providing a travel credit or frequent flyer miles when, due to circumstances within the control of either airline, a flight is cancelled and they wait three hours or more for a new flight, or a flight is delayed by three hours or more from the scheduled departure time. 
   
• Lowering costs for service members and their families: The two airlines must lower costs for the nation’s military and their families, a significant population in both Alaska and Hawaii, by waiving certain fees. Both airlines will update their customer service plans to provide at least one free standard carry-on and at least two free standard checked bags for service members and their accompanying spouse and children. They will also waive change fees for service members and their families who reschedule flights due to a military order or directive.