The Department of Transportation is allowing Alaska Airlines (“Alaska”) and Hawaiian Airlines (“Hawaiian”) to close their merger—as long as the airlines protect their passenger rewards program against devaluation and ensure that consumers will receive the benefits they have earned.

The airlines will be able to consummate the merger on the condition that they continue to operate separately until the DOT gives final approval to the merger application. The airlines filed their merger request on July 15, 2024.

If the application is given final approval, the rewards program protections will remain in effect for six years.

“As the merger moves forward, Alaska and Hawaiian are required to protect the value of rewards, maintain existing service on key Hawaiian routes to the continental United States and inter-island, preserve support for rural service, ensure competitive access at the Honolulu hub airport, guarantee fee-free family seating and alternative compensation for controllable disruptions, and lower costs for military families,” department officials said.

They added that for the first time, the DOT is requiring airlines to agree to binding, enforceable rewards program protections in order to close their merger.

Among other things, Alaska and Hawaiian agreed to:

  • Impose no expiration dates for their HawaiianMiles and Alaska Mileage plans.
  • Allow the transfer of reward miles between the two airlines using a 1:1 ratio. The value of the reward miles must be maintained.
  • Impose no new “junk fees.” The combined airline must not impose change or cancellation fees on rewards redemption tickets for travel on carrier-operated flights.  In addition, the airlines agreed not to charge fees to guarantee that an adult can obtain an adjacent seat for children 13 years of age or under.

Last month, the DOT announced that it had initiated an investigation into the rewards programs at the nation’s four largest airlines. As part of that probe, the department is investigating how consumers are impacted by the devaluation of earned rewards, hidden or dynamic pricing, extra fees, and reduced competition and choice.