United Air raises Alaska-Hawaiian merger concerns with DOT

United Airlines Holdings Inc. has raised concerns with the Biden administration over how the pending $1.9 billion merger of Alaska Air Group Inc. and Hawaiian Holdings Inc. could affect its business relationships with Hawaiian.

United Chief Legal Officer Robert Rivkin raised the carrier’s misgivings in a conversation with the US Transportation Department’s deputy general counsel, according to a government filing. United is concerned about the potential effect a deal may have on marketing and loyalty agreements it has with Hawaiian.

The department is reviewing the proposed combination after the US Justice Department ended its evaluation without challenging it on antitrust grounds. 

The decision to let the deal proceed was a break from the US government’s opposition to earlier airline combinations, part of the Biden administration’s push to promote competition across many industries. The DOJ previously blocked a merger between JetBlue Airways Corp. and Spirit Airlines Inc. and forced the breakup of a JetBlue partnership with American Airlines Group Inc. 

Representatives for United and the Transportation Department declined to comment beyond the filing. Alaska and Hawaiian didn’t immediately respond to messages seeking comment. 

United’s shares rose 2.5% as of 11:20 a.m. in New York while Alaska and Hawaiian were little changed.

The Transportation Department must determine whether the Alaska-Hawaiian tie-up is in the public interest before it can approve the necessary transfer of routes by the carriers. The department can impose conditions to ensure the deal serves consumers, such as requiring the carriers to maintain service levels for certain routes. In the past, it has required airlines to give up flight slots or gates at busy airports to promote competition.

The combination of Alaska and Hawaiian would capture more than 50% of Hawaii’s airline market, which has annual revenue of $8 billion, the carriers have said. But travelers in Hawaii would be able to reach more destinations through the combined networks, while creating a stronger competitor to the four largest domestic airlines that dominate the US market.