Alaska Airlines and Hawaiian Airlines said on Sunday that they would combine, the latest U.S. airlines seeking to grow and compete via merger.

Under the agreement, Alaska Airlines would acquire Hawaiian for $18 per share, or roughly $1.9 billion. That includes $900 million in debt.

In a joint announcement, the airlines said that the merger would allow both carriers to compete effectively across the U.S. and globally while expanding destinations and entrenching the combined carrier on the West Coast.

Both airlines’ brands would continue to exist “on a single operating platform,” the carriers said, with a single loyalty program. It was not immediately clear what parts of the airlines brands and operations would be kept separate and which would be combined, or how the differentiated brands could function as an integrated operational entity. In a presentation to investors, the airlines predicted run-rate synergies of approximately $235 million.

The combined entity would be based in Alaska Airlines’ headquarters of Seattle, with Honolulu as a key hub.

This combination is an exciting next step in our collective journey to provide a better travel experience for our guests and expand options for West Coast and Hawai‘i travelers,” Alaska Airlines CEO Ben Minicucci said in a statement.

Minicucci would lead the combined entity, the airlines said.

The carrier would be the fifth-largest in the U.S. in terms of fleet size, with 365 aircraft.

Should the pending merger of JetBlue and Spirit be approved in federal antitrust court, the combined Alaska-JetBlue would drop to the sixth largest; Spirit will have 204 aircraft at the end of 2023, while JetBlue had 296 as of the end of the third quarter, according to both respective airlines.

Hawaiian Airlines has struggled since the COVID-19 pandemic, and is on track to record a loss for 2023. The reopening of much of Asia, particularly Japan, has been a boon, with roughly 25% of Hawaiian’s revenue coming from transpacific passengers, according to some estimates. The airline also faces stiff competition from Southwest on inter-island routes and routes from the West Coast.

Hawaiian Airlines And Oneworld would bring an expanded network for Alaska Airlines

Following the transactions, the combined airline would be part of the Oneworld airline alliance, which Alaska joined in early 2021.

According to the carriers, the combined airline would initially service 138 destinations across its network, including 29 international markets. More than 1,200 destinations would be accessible through Oneworld partners.

The combined airline would have 31,200 employees and an estimated 54.7 million annual passengers.

The two airlines said that they would remain fully committed to Hawaii, with a strong operational presence and a leading position in the $8 billion leisure market.

The combined carriers would have more than 50% of the Hawaiian air market share, and would “retain and grow union represented jobs” in the state. Alaska currently allocates more than 10% of its capacity to Hawaii. The carriers would retain pilot, flight attendant and maintenance bases in Honolulu.

This is a breaking news story and will be updated.

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