In a recent development, Hawaiian Holdings Inc. (NASDAQ:HA) has disclosed an additional extension to the review period set by the Department of Justice (DOJ) concerning its pending merger with Alaska Air Group, Inc. (NYSE:NYSE:ALK). This disclosure was made in a filing with the Securities and Exchange Commission dated Wednesday, August 14, 2024.
The merger, initially announced on December 2, 2023, involves Alaska Air Group's subsidiary, Marlin Acquisition Corp., merging with Hawaiian Holdings, with the latter expected to survive as a wholly-owned subsidiary of Alaska Air Group. The companies had previously complied with the DOJ's Second Request for additional information and documentary material on May 7, 2024, which initiated a 90-day review period.
This review period, which was due to expire on August 5, 2024, has faced multiple extensions. The most recent extension was agreed upon on Tuesday, August 13, 2024, setting the new deadline to 12:01 a.m. Eastern Time, on August 16, 2024. However, the latest extension pushes this deadline further to 12:01 a.m. Eastern Time, on August 20, 2024.
Hawaiian Holdings and Alaska Air Group continue to cooperate with the DOJ in their review of the merger. This process is part of the regulatory scrutiny that such mergers undergo to ensure compliance with antitrust laws and to assess the impact on competition within the industry.
The information in this article is based on a press release statement.
On the financial front, Hawaiian Holdings reported an adjusted EBITDA loss of $21 million for Q2 2024. However, the company managed to raise $400 million through financing 10 A321 neo aircraft and exchanged $1.2 billion in loyalty bonds due in 2026 for new bonds maturing in 2029. The airline has also successfully deployed Starlink inflight connectivity across all 18 Airbus A321neos.
These developments come amidst a global shortage of new aircraft, prompting airlines to consider mergers and acquisitions as a strategy to increase their capacity and market shares. The proposed deal between Alaska Air and Hawaiian Holdings is particularly significant as it would grant Alaska Air control over more than half of the flight market to Hawaii. The outcome of this merger remains under close examination by the DOJ.
InvestingPro Insights
As Hawaiian Holdings Inc. navigates through the extended review period for its merger with Alaska Air Group, investors might find the latest financial metrics and analyst insights from InvestingPro valuable for assessing the company's current position. With a market capitalization of approximately $776 million, Hawaiian Holdings operates under a significant debt burden, which could pose challenges for the airline, especially in making interest payments on its debt.
InvestingPro data shows that Hawaiian Holdings has a negative P/E ratio of -2.19, indicating that the company is not currently profitable. This is further supported by an adjusted P/E ratio of -2.07 for the last twelve months as of Q2 2024. Additionally, the company has experienced a slight quarterly revenue growth of 3.53% in Q2 2024, yet it suffers from weak gross profit margins of 1.44% for the same period.
Despite these challenges, Hawaiian Holdings has seen a significant return over the last week, with a 16.65% price total return. This could reflect investor optimism or market reactions to recent events, such as the merger developments. For those considering investing in Hawaiian Holdings, InvestingPro offers additional insights and tips, including the observation that the stock price movements are quite volatile, which could impact investment decisions. There are 13 additional InvestingPro Tips available for subscribers who are looking for more in-depth analysis and guidance on the stock.
Investors can access these insights and more by visiting the InvestingPro platform at https://www.investing.com/pro/HA, which provides an extensive range of financial metrics and expert analysis to help make informed decisions.
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