Alaska Makes Its Case to Investors

Alaska executives met with investment analysts and shared their views on how they might run Hawaiian as a separate brand.

Dear readers,

Yesterday, I shared with you my thoughts on Alaska's proposed acquisition of Hawaiian Airlines. Many of you graciously shared your opinions with me via email, and I agree with a lot of you that this is a union worth pursuing for several reasons. Alaska lacks the scale to compete with much larger airlines; Hawaiian is in considerable peril without a merger partner; and, assuming the price¹ holds, Alaska would be buying Hawaiian for a fraction of what it might have been worth five or 10 years ago. In business — as in life — timing is everything.

I wrote yesterday’s piece before Alaska and Hawaiian executives met later in the afternoon with analysts to lobby them about why the deal will benefit investors.² Today, I’ll update you on their arguments so you can understand Alaska’s rationale — why Alaska is choosing to operate two brands under one operating certificate, why loyalty is key to the deal, why Alaska believes analysts are undervaluing Hawaii as a market, and why Alaska may opt for 787s or A330s but perhaps not both. I’ll also recap what I thought was a very candid explanation from Alaska executives about what they believe they got wrong in the Virgin America acquisition.