Here’s what you need to know about Alaska Airlines’ acquisition of Hawaiian Airlines

All the chatter in the airline break room is about Alaska Airlines’ takeover of Hawaiian Airlines.

After the U.S. Departments of Justice (DOJ) and Transportation (DOT) had a chance to review the agreement, regulators asked for several concessions. Alaska Airlines agreed to maintain current levels of service on Hawaiian’s interisland routes, as well as between Hawaii and the mainland. There is some leeway to accommodate general market conditions and specific competitive events.

U.S. regulators have required Alaska Airlines to let children sit next to their parents for no extra charge. Regulators have also introduced some provisions to try to maintain the value of Hawaiian and Alaska’s frequent flyer plans. Part of the DOT order also required miles earned on credit cards to have a value. However, the dollar value is obscured in the order and not publicly available.

Credit card terms are important, however, because Bank of America, through credit card commissions and frequent flyer miles purchases, is by far Alaska Airlines’ largest customer. Hawaiian Airlines has its own loyalty program and credit card tie-in, with Barclays Bank Mastercard.

According to Alaska Air press releases, the integration of Hawaiian Airlines into Alaska Air Group will take 12-18 months. The group includes both Alaska Airlines and Horizon Air.

Travelers I spoke with are excited about the opportunity to use Alaska Airlines miles to travel to Hawaiian’s international destinations, including Sydney, Auckland, Pago Pago, Rarotonga, Tahiti, Japan and South Korea.

Additionally, Alaska Air frequent flyers will be able to earn miles on purchased travel to these destinations. According to Alaska Airlines, travelers will soon be able to convert their Alaska Air miles to Hawaiian Air miles on a 1:1 basis to fly these international routes.

Even without the Hawaiian Airlines acquisition, Alaska frequent flyers would be able to fly on partner airlines to most (not all) of Hawaiian’s international destinations. Partner airlines with earn-and-burn privileges include Qantas (to Australia and New Zealand), Korean Air (to Seoul), Japan Air Lines, and Air Tahiti Nui.

When you fly with a partner airline, it costs more miles and you earn fewer miles per flight. For example, when you fly with partner airlines like American Airlines and Condor, you only earn 25% to 30% of the miles you actually fly, unless you pay extra for business class.

As a wholly owned subsidiary of Alaska Airlines, it is reasonable for travelers to expect full mileage credits on international routes and more favorable terms when redeeming miles. However, even when flying Alaska Air, Saver tickets only provide 30% of the miles flown.

Mileage reciprocity also opens the door for American Express cardholders to use their points toward Alaska Airlines flights.

American Express offers a flexible spending plan where cardholders can transfer their points to a number of different airlines, including Delta, Emirates and Hawaiian. With the launch of the Alaska-Hawaiian mileage “redemption,” American Express cardholders can transfer their points to Hawaiian… and then to Alaska Airlines.

I’ve already heard from some travelers who have signed up for Hawaiian Air’s loyalty program and applied for the Barclays Mastercard. The annual fee is $99, and travelers must spend $2,000 within 90 days to receive Hawaiian’s 70,000 bonus miles. You can then use the miles with Hawaiian or transfer them to Alaska Airlines when the feature launches.

Travelers have a lot of questions about how the current Mileage Plan benefits will work on Hawaiian Air flights. That includes the two-bag free benefit for Club 49 members.

For example, will the $99 Alaska Visa companion fee apply to Hawaiian international flights? That’s questionable for the foreseeable future, as Alaska and Hawaiian continue to operate as separate airlines. The ultimate goal, though, is for both carriers to operate as one airline.

In addition, Hawaiian Airlines, through its Hawaiian Miles loyalty program, already offers a discount for companions of cardholders. International routes are not currently included in the plan.

Many travelers ask about Hawaiian Air’s wide-body jets. Hawaiian operates two dozen Airbus 330s and a pair of 787s. Alaskans want to know if these jets can be used for nonstop flights from Alaska to Asia.

I think some of these comments are coming from the talk of nonstop flights to Asia generated by Ravn and New Pacific Airlines. Those flights are not happening. In fact, New Pacific Airlines (formerly Northern Pacific Airways) recently upgraded its 757s to a full business configuration for charter work in the Lower 48.

It’s hard to imagine Hawaiian dedicating a wide-body plane to flights between Anchorage and Asia anytime soon. But Alaska CEO Ben Minicucci said he’s looking forward to adding international routes, particularly from Seattle. Does that mean flights from Alaska to Tokyo are on the table? Stranger things have happened.

Other travelers are asking whether Hawaiian and Alaska will offer more flights between Alaska and Hawaii. Alaska currently flies daily from Anchorage to Honolulu, arriving at 10:57 p.m., too late to connect to neighboring islands. Nonstop flights to Kona begin Nov. 23, with three weekly flights through New Year’s. Then, flights continue daily through Feb. 13.

Flights from Anchorage to Maui will operate only once a week (on Saturdays) between November 23 and January 4, and then four flights a week thereafter.

One reader, “Barb R.”, said she would be happy if Alaska added direct service from Anchorage to Kauai.

While Alaska’s initial plan is to operate Hawaiian Air and Alaska Air separately, the goal is to absorb Hawaiian and operate both carriers under a single airline certificate. Additionally, Alaska plans to offer a single frequent flyer plan to cover both Alaska and Hawaiian Air.

According to Alaska press releases, one goal is to make sure all flights to Alaska and Hawaii are available to book on both airlines’ websites. This would involve booking both airlines on one ticket, allowing for “rollover” of baggage between the two flights.

The changes for travellers are complex. Add to that the challenge of integrating the Airbus fleet, combining two sets of pilots, flight attendants and support staff. It’s a long process that needs to be handled thoughtfully.

Honolulu will become Alaska’s second-largest hub after Seattle, in part due to frequent inter-island service provided by Hawaiian Air using its fleet of Boeing 717s, as well as flights to Hawaii from Boston, New York, Austin and 12 cities on the West Coast.