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Shares of Alaska Airlines gaining in the pre market. This morning, the Department of Transportation given the airline it's blessing to close a one point nine bidding and dollar merger with Hawaiian Airlines. Under the terms of the deal, Alaska and Hawaiian must protect the value of loyalty programs and maintain key routes as well. This is the first time the DOT has required airlines to agree to binding, enforceable protections before approving a merger. To discuss I'm ready please to
say that. Giving us some of his time this morning, is the Transportation Secretary Pete Buddha. Jet's secretary Boodh Jedge. Welcome to the program, sir. I want to start with this deal and talk about some of the work you've been doing on it and whether you think this could serve as a model an example for future integration in the industry.
Well, thank you, Yeah, we believe it really does represent a new chapter in the way the DOT approaches both consumer protection and competition. Has a lot of authorities, and in my view that means a lot of responsibility when it comes to competition. I think The Department of Justice's role is well known and well understood. The Department of Transportations role less so, partly because the Department has not been very proactive over the last thirty years or so
as these airline mergers have come along. But we are concerned with competition and we are also concerned with consumer protection, and so when this deal came before us, we saw that the Department of Justice did not intervene. We still wanted to make sure that there were protections in place, which really come into two categories. One of them has to do with service itself, making sure that in places like inter island service in Hawaii.
That nobody has made worse off because of this deal.
But secondly, consumer protections that are in line with what we're trying to do more broadly for airline passengers, things like making sure that there's family seating available. Alaska does that that Hawaiian had not. We want to make sure it's the better and not the worse of those two
and so they've committed to that. And then probably the most new and I think one of the most important things that we're doing, the rewards program and making sure there are provisions related to that points and mile system too.
That really is breaking new ground for us as a department, but it's increasingly a very very important part of the customer experience, and it's looming larger and larger financially too, So we wanted to make sure it was contemplated in this agreement before we approved in the merger, the.
Secretary bout judge, could the DOT have done anything different when it came then to Jet Blue and Spirit given you're now likely going to be using this blueprint.
Well, of course, every proposed merger is different. It is evaluated on its merits and the impacts that it could have to competition. In that case, the DOJ took action based on a real concern about what happened on many routes, and our department took the step again something that our department hadn't really typically done in the past, of aligning
ourselves with that and supporting that action. But yeah, I do think there are cases where if it's not something that just outright must be prevented by the analysis of competition law, still is something that you need to make sure it goes forward on terms that are consistent with our responsibility to support the public interest and those public
interest determinations. A lot goes into that, a lot of market analysis, a lot of legal analysis, but some total of it for passengers should be a better passenger experience, and some assurances that this will mean a level up to the best rather than a level down to the worst of two worlds.
When you have multiple airlines coming.
Together, Well, I guess I'm asking because Hawaiian Air really needed this cash infusion the same way Spirit Air desperately needs a cash infusion. So why is the administration willing to let one country get the boost they one airline get the boost they need, and not the other.
Well, again, there's a lot that goes into the competition analysis. A lot of it has to do with the loss of competition on key routes, evidence informing DOJ and US in a separate but somewhat overlapping scope of analysis, what happens to prices that consumers face and look, part of why this is a concern is because of what's happened over the years during the period when America went through the debate over deregulation, which which led to our modern
airline system. A lot of the people involved in that policy were confidently predicting then in the future there would be about one hundred airlines in the United States. Instead, we've seen merger after merger, lots of consolidation, and so it's very important to take a very hard look anytime there's a proposal to go from more airlines to fewer airlines in a country that already has so few.
Secretary, we're talking about fewer airlines, etc.
We're having a question about whether we're going to have fewer planes.
What's the threshold for the United States government to subsidize Boeing at a time are there real questions about its ability to continue to invest and its workers are striking.
Well.
Boeing has historically been an aerospace leader. Right now encountering a number of issues related to quality and safety that the FAA has required them to demonstrate how they're going to address.
And as you mentioned labor issues as well.
If you look at how Boeing competed so well in the past, it had to do with a focus on equality and on safety, and I believe that's absolutely compatible with doing right by workers and with Boeing's place in America's economy. But again, the most important thing, certainly from a Department of Transportation. Perspective is that the safety and the quality are there because everything else sort of gets
multiplied by zero. If you have those kinds of problems that can shake, sure, they can shake the market, but the most important thing is the safety of the traveling public.
Secretary, appreciate your time this morning. Hopefully we can have a longer conversation next time on some big, big issues, Thank you, sir, Secretary. People to judge on the latest in the airline industry, and just a little bit of the end there.
Lisa on Bowick