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How the Alaska and Hawaiian Tie-up Could Affect Employees

While the deal is still in its earliest stage, both companies have shared some initial details on how the 'combined' airlines may operate.

An Alaska A330-200 in Seattle (Photo: AirlineGeeks | Katie Zera)

Let’s face it; any corporate acquisition or merger can leave employees with plenty of questions. In the airline business, add in complex networks, long seniority lists, along with stringent regulations, which can all lead to more questions than answers.

Former American Airlines CEO Bob Crandall said in a 2008 New York Times op-ed: “And [mergers] will anger airline employees, who will perceive themselves to be hurt by the mergers.” Although this was written 15 years ago, much of it holds true today.

Not all deals like Alaska Air Group’s purchase of Hawaiian are created equal. Time and time again, we’ve seen major upsides and downsides for the employees stuck in the middle. Take, for instance, the America West/US Airways merger, where the two pilot workgroups did not fully integrate until after the later American Airlines/US Airways merger, following a controversial seniority list integration.

Missouri Senators were so concerned about the controversial handling of seniority list integrations when American Airlines purchased TWA that a new piece of legislation was passed. In 2007, the McCaskill-Bond statute was signed into law and is codified under 49 U.S.C. § 42112; it requires the integration process to be done in a ‘fair and equitable manner.’

Is This Even a Merger?

A question on the top of the minds of many is how to define the transaction between Alaska and Hawaiian. Indeed, Alaska Air Group intends to purchase Hawaiian for $1.9 billion but plans to keep the brands separate. This sort of arrangement is fairly common among other industries in the U.S., especially for hotel chains.

Brand assets can often be a significant part of an acquisition. Both Hawaiian and Alaska have unique brands that carry enormous regional significance. But individual brands are far from a complete picture of any large-scale transaction.

Even though the brands will be separate, Alaska has strongly hinted at tighter-knit synergies on the business side. In an investors presentation regarding the acquisition, the company teased the idea of cross-fleeting, including the use of 737s to replace Hawaiian’s aging 717s. The deal’s press release used the word ‘combined’ 14 times.

During a press conference on Sunday, Alaska Air Group President and CEO Ben Minicucci said that customers will see two brands, but behind the scenes, the airlines will work on a single operating certificate and will combine workgroups under single collective bargaining agreements (CBAs), according to The Points Guy’s David Slotnick on Twitter/X.

“The culture element is so important that we decided early on – and this is a lesson learned from our previous transaction – that the Hawaiian Airlines brand will remain,” Minicucci said. Alaska acquired Virgin America for $2.6 billion in 2016 before eventually folding the unique Virgin brand into the Alaska operation.

Different Workgroups

According to the airline’s CEO, 86% of Alaska’s 24,000 employees are union-represented. Hawaiian has over 7,300 employees, many of whom are also represented by unions.

During the Sunday press conference, Hawaiian CEO Peter Ingram affirmed the commitment that all unionized employees would have job protection. For non-union jobs, Minicucci stopped short of confirming that all positions will be retained, but added, “…I see a significant number of those jobs still continuing into the future…”

On the crew side, both pilots and flight attendants at each airline are represented by the Alr Line Pilots Association (ALPA) and the Association of Flight Attendants-CWA (AFA) respectively.

An Alaska 737-900ER in Phoenix (Photo: AirlineGeeks | Katie Bailey)

Pilots

Excluding its Horizon subsidiary, Alaska Airlines has nearly 3,000 pilots with bases in Seattle, Los Angeles, San Francisco, Anchorage and Portland, according to the Pilot Careers Center. As of October 2023, the airline operates a fleet of all-Boeing 737 aircraft.

On the other hand, Hawaiian has just over 1,000 pilots and a single Honolulu base. It has a more diverse fleet with Boeing 717s, Airbus A321neos, Airbus A330s and soon-to-be-delivered Boeing 787-9 aircraft. The airline also has a small freighter division in partnership with Amazon’s Prime Air.

“Today, Alaska Airlines announced an agreement to combine with Hawaiian Airlines. The Alaska Airlines Master Executive Council (ALA MEC) of the Air Line Pilots Association, Int’l (ALPA) is evaluating the business case for this merger and what it may mean for pilots of both Alaska and Hawaiian Airlines as well as our passengers and other stakeholders,” ALPA shared in a statement regarding the proposed transaction.

Both Alaska and Hawaiian were among the first U.S. carriers to ink new CBAs with pilots in late-2022 and early-2023 respectively. Alaska’s new pilot agreement becomes amendable in three years, while Hawaiian’s in four years. It is unclear what immediate effect, if any, this will have on the CEO’s vision for unified CBAs.

Hawaiian has a far broader network than Alaska with flights not only to the U.S. mainland but also to Oceania, Asia and more. Larger aircraft and longer flight times often equate to higher pay rates.

Under the new agreement, Alaska’s pilot pay scale tops out at $340.25 per hour. At Hawaiian, pilots can receive $392 per hour on the company’s widebody aircraft. Of course, this does not include any sort of international overrides or premium pay.

For Alaska pilots, the ability to upgrade to larger widebody aircraft could be a plus for some. Hawaiian pilots who commute to the company’s singular Honolulu base could see benefits from Alaska’s broader offering of crew domiciles.

A Hawaiian Airlines Airbus A330-200 taxiing in Boston. (Photo: AirlineGeeks | Ben Suskind)

Flight Attendants

Similar to pilots at both airlines, flight attendants are represented by the same union. On Sunday, the AFA issued the following statement regarding the transaction: “AFA-CWA represents Flight Attendants at both Alaska and Hawaiian. Our first priority is to determine whether this merger will improve conditions for Flight Attendants just like the benefits the companies have described for shareholders and consumers. Our support of the merger will depend on this.”

Flight attendants at Hawaiian Airlines ratified a new five-year contract in 2020. In addition to the airline’s main base in Honolulu, Hawaiian also offers a Los Angeles domicile for its flight attendants. The carrier has 2,200 flight attendants.

Alaska and its flight attendant union aren’t quite at the same point in their negotiating process. According to the union, its CBA became amendable on Dec. 17, 2022. Both the union and the company are still in the negotiation process.

“In fact, negotiations for Alaska Flight Attendants are continuing and top priority for our union. We will continue to push our careers forward and improvements for Flight Attendants are a central component to our review of support or opposition to a merger,” the AFA continued in its statement. Alaska has over 6,500 flight attendants.

What’s Next

These sorts of deals take time, and the companies expect a 12-18 month timeline prior to closing. Both the companies and unions have emphasized a business-as-usual approach until the transaction further materializes.

As seen with some prior airline acquisitions, the labor unions will share their support or disapproval as more details emerge. If joint CBAs for different workgroups were to hold true, seniority list integration would undoubtedly be a hot topic among many others.

It is worth noting, too, that there are several other unionized workgroups within the ranks of both airlines, including dispatchers, fleet service workers and mechanics. Some of which are still in active negotiations while others have ratified new agreements.

Finally, the deal is subject to an array of government approvals before it can close. This can add a whole new layer to the process as seen right now with JetBlue’s proposed merger with Spirit.

Ryan Ewing
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Author

  • Ryan Ewing

    Ryan founded AirlineGeeks.com back in February 2013 and has amassed considerable experience in the aviation sector. His work has been featured in several publications and news outlets, including CNN, WJLA, CNET, and Business Insider. During his time in the industry, he's worked in roles pertaining to airport/airline operations while holding a B.S. in Air Transportation Management from Arizona State University along with an MBA. Ryan has experience in several facets of the industry from behind the yoke of a Cessna 172 to interviewing airline industry executives. Ryan works for AirlineGeeks' owner FLYING Media, spearheading coverage in the commercial aviation space.

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