Alaska Airlines has agreed to purchase Hawaiian Airlines. The premium they’re paying is great for Hawaiian shareholders. This deal should be as good as any airline merger for customers. But Alaska is overpaying and not getting much of value for $1.9 billion.
Hawaiian Airlines has submitted a filing with the Securities and Exchange Commission that outlines what will happen to HawaiianMiles miles and elite status under the deal.
What Happens To HawaiianMiles Under The Alaska Airlines Deal
Alaska Airlines plans to buy Hawaiian Airlines, keep operating the Hawaiian brand but do so under a single airline operating certificate, and transition HawaiianMiles into the Alaska Airlines Mileage Plan program. They expect much of the upside from the deal to come from their Bank of America co-brand deal picking up Hawaiian customers.
Here’s what Hawaiian told the SEC that customers can expect.
- HawaiianMiles don’t expire
- The program’s earning and redemption, including with Hawaiian’s co-brand credit card, continues until it’s folded into Mileage Plan
- Miles will be transferred into Mileage Plan
- Elite status will be matched into Mileage Plan
- Applications for the co-brand are still available, even though the card will go away assuming the deal closes
- They’re pitching Mileage Plan as a better program, which it is, but still surprising to see Hawaiian admit it officially.
How You’ll Be Able To Play The Miles Merger
The airlines haven’t communicated the ratio at which HawiianMiles will be combined into Alaska Airlines Mileage Plan.
- Alaska miles are worth far more than HawaiianMiles
- But it would be a marketing bomb to tell the new customers you need to stay loyal (and switch to your Bank of America credit card) that their balances are worth ‘less’. Most Hawaiian members don’t understand the nuance of relative value, and will be furious to see their mileage balances shaved as part of the deal.
So I have to think that miles will convert 1:1, and this also presents an opportunity to transfer points from American Express and Bilt into Hawaiian to eventually become Alaska miles (none of the card programs transfer directly to Alaska) and also to apply for Hawaiian Airlines credit cards, since those products are expected to go away with this deal.
Of course, in addition to the bet on 1:1 conversion, this all hinges on the deal closing (especially that the Department of Justice doesn’t stop it) so it may be wise to wait on executing these strategies.