The decision taken by the Biden administration has left several eyebrows raised over an issue that is blatantly unacceptable. Despite the evident lack of competition on routes between Hawaii and the mainland U.S., they permitted Alaska Airlines to proceed with its acquisition of Hawaiian Airlines for a whopping $1 billion. This approval came with some conditions, but the straightforwardness with which they allowed this deal to proceed exposes the administration’s uninspiring approach to monitoring market competition.
Furthermore, officials from the Transportation Department blatantly stated that they see no roadblocks that can hinder the gradual melding of these two airlines. The worth of the deal at a staggering amount of $1 billion, yet they seem to have turned a blind eye to the repercussions of such a colossal merger. This clearly reflects the Biden Administration’s indifference towards ensuring a competitive market space, choosing to make decisions based on their whims rather than in-depth analysis.
Contradiction seems to be a buzzword within the Biden administration, as Transportation Secretary Pete Buttigieg claimed that the airlines offered assurances to protect travelers. His affirmation that they would sustain the value of frequent-flyer rewards sounds hollow, considering it comes amidst a multi-million dollar deal that may shake up the entire aviation sector.
Unbelievably, this approval is in sharp contradiction with the administration’s previous actions. They had vehemently opposed past airline transactions, which now appears to be a pretense to demonstrate their so-called commitment towards preserving competition.
In a previous instance, they actively blocked JetBlue’s intent to acquire Spirit Airlines for a significant $3.8 billion. Moreover, their Justice Department went as far as to take legal measures to obstruct a strategic partnership between JetBlue and American Airlines. This contrast in actions speaks volumes about the Biden administration’s inconsistent approach to managing the airline industry.
Alaska and Hawaiian airlines also conformed to some level of consumer protection, which again appears to be mere superficial measures under the guise of prioritizing consumers. As part of their agreement with Biden’s administration, they promise to ensure families can travel together without incurring additional costs and offer reduced expenses to military families.
While these consumer protection promises might appear beneficial, there are underlying issues that the administration blatantly neglected. They concentrated mainly on frequent-flyer rewards while ignoring crucial factors such as the impact of this merger on ticket prices, the future of airline employees, and the dominance of a single entity controlling a significant share of the market.
The status of the airlines’ loyalty programs has also been called into question, with the two airlines pledging to keep the worth of frequent-flyer rewards intact in the aftermath of their merger. But how reassuring can this promise be given the magnitude of the merger and the past actions of such airlines after similar deals?
This controversial deal was first put forward last December, where the agreement was valued at a staggering $1.9 billion. This figure includes Hawaiian’s debt, which will now be inherited by Alaska. It appears that in the rush to put through this massive merger, the administration may have overlooked the significant burden this could put on Alaska Airlines.
Completion of this deal will also solidify Alaska’s position as the fifth-largest U.S. airline in terms of revenue. In an industry challenged by severe competition and where bigger often means more market dominance, how is this a sound decision? Especially when we take into consideration the Biden administration’s previous opposition to other airline deals.
Clearly, the inconsistencies, contradictions, and hasty decisions within the Biden administration seem glaringly evident. It’s ironic how these decisions that favor certain corporations have raised many questions about their intentions and priorities in managing the nation’s airline industry.
The Biden administration’s posture and decisions on such significant deals clearly show a lack of clear vision and planning. The inconsistency not only sends a message of disarray within the administration but also undermines their credibility in dealing with major industry deals.
It is alarming that the Biden administration has allowed such a significant merger to go ahead without a clear plan in place to address the potential risks and disadvantages to consumers and employees. This situation underscores the need for a more comprehensive and consistent approach to regulating the industrial sector, especially the aviation industry, which sees frequent mergers and acquisitions.
One thing is clear, the Biden administration’s approach to these airline deals seems to be a departure from the previous posture and raises questions about their ability to effectively manage and regulate the airline industry. As they continue to make these inconsistent decisions, it will be interesting to see what other strategic mishaps they manage to make in the future.