Alaska Air may up cargo ops with Hawaiian buy

With its acquisition of Hawaiian Airlines , Alaska Airlines may be positioning itself to become a significant cargo competitor with the “big four” U.S. carriers, considering Hawaiian’s 2022 deal with Amazon . [caption id="attachment_57139408" align="alignright" width="482"] (Photo/Alaska Airlines)[/caption] Alaska Airlines announced Dec. 3 that it would acquire Hawaiian Airlines for $1.9 billion, including $900 million in debt incurred by Hawaiian. Hawaiian’s market capitalization is $250.2 million compared with Alaska’s $4.3 billion. While Alaska has four B737 freighters, Hawaiian signed a deal in October 2022 for 10 widebody A330s leased by Amazon, the first of which is operational. This means there is a chance Amazon will hold an equity stake in Hawaiian Airlines, making Alaska’s valuation more favorable long-term, Derek Lossing , founder and senior adviser at Cirrus Global Advisors , told Air Cargo Next . “If [Amazon] wanted to, they could become a shareholder of Hawaiian Airlines,” he said. “And that agreement is kind of separate from the operational environment. That doesn’t complicate the merger in any way. But it will make … Amazon think of Alaska perhaps as a viable long-term partner.” The options for Amazon could affect how it operates once the merger between the two airlines is complete, Lossing added, including: Amazon continuing its agreement with Hawaiian, under Alaska; and Amazon making a deal for a stake ownership in Hawaiian Airlines. While the cargo business does not typically drive mergers, Hawaiian is uniquely positioned to help Alaska become more profitable as a cargo operator, Lossing said. Compared with Delta Air lines ’ cargo revenue , which accounts for 2% of its overall operations, Hawaiian’s cargo and other revenues total 7%, Lossing said. “I think Hawaiian is interesting because air cargo is a bigger percentage of their business because of their exposure to Asia historically,” he said. Alaska Airlines, Hawaiian Airlines and Amazon did not respond to requests for comment. Since the deal was announced, Hawaiian Holdings stock has increased 192% while Alaska Air Group ’s fell 5%. The merger will take 12 to 18 months to complete, and the two airlines will continue to maintain separate brands while operating as a single entity, a press release from Alaska Airlines stated. “The combination of complementary domestic, international and cargo networks is positioned to enhance competition and expand choice for consumers on the West Coast and throughout the Hawaiian Islands,” the press release stated. Alaska Airlines in 2022 flew more than 100,000 tonnes of cargo, according to its logistics website. With increased capacity coupled with a flat market, Alaska Air’s cargo revenue decreased 7% in the third quarter of 2023, while Hawaiian’s cargo and other revenue dipped 19% — a trend seen by major carriers globally . Join Air Cargo Next for the free webinar, “The future of AI in air cargo,” on Tuesday, Dec. 5, at 11 a.m. ET. More information about the webinar and registration is available here .

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