Federal District Court Dismisses Antitrust Suit To Unwind Airline Merger

On April 24, 2026, Judge Micah W.J. Smith of the United States District Court for the District of Hawaii dismissed claims by private plaintiffs to unwind Alaska Airlines Inc. and Alaska Air Group, Inc.’s acquisition of Hawaiian Airlines (collectively “Defendants”).  Warren Yoshimoto, et al. v. Alaska Airlines Inc., et al., (D. Haw., April 24, 2026). 

Plaintiffs, customers of Hawaiian Airlines, alleged that the acquisition will substantially lessen competition or tend to create a monopoly in violation of Section 7 of the Clayton Act for routes covering Hawaii.  The Court dismissed these claims because plaintiffs failed to adequately plead factual allegations supporting any of three alleged geographic markets. 

Under Section 7 of the Clayton Act, alleging a relevant market is critical to establishing a viable claim, and litigation often turns on this element.  The object is to define an economic market for the purpose of assessing the effect of the merger on competition.  Plaintiffs alleged three affected geographic markets, including 1) the “Hawai‘i – U.S. mainland” market; 2) the “Interisland in Hawai‘i” market; and 3) the “Hawai‘i to Pacific and Asia” market.  Defendants conceded that plaintiffs offered a sufficient product market, “scheduled air passenger service,” but moved to dismiss the amended complaint on the ground that plaintiffs failed to plausibly allege a relevant geographic market. 

The Court identified a critical flaw in all three alleged markets: there was no “factual basis to conclude that passengers would consider scheduled air passenger service within any of these broadly defined markets as interchangeable or alternative sources of supply.”  Geographic market is ordinarily an area of effective competition where buyers can turn for alternate sources of supply.  The Court reasoned it would be difficult to conceive of different flights within each market as interchangeable products.  For example, a flight between Hawaii and San Francisco is not an interchangeable product with a flight between Hawaii and Boston.  So, a Hawai‘i – U.S. mainland market was not plausible.  Likewise, flights between different Hawaiian Islands would not be interchangeable products, nor would Asia-Pacific flights (e.g., a flight from Hawaii to New Zealand is not interchangeable with a flight from Hawaii to Japan).  Moreover, plaintiffs offered no factual allegations in support of these, in the Court’s view, “doubtful” markets. 

Plaintiffs had argued that a supplier-perspective would support their alleged geographic markets, relying on an allegation in the complaint that “the threat of potential competition” from “any major existing airline … throughout the United States…constrains airfares and services.”  The Court rejected this argument, reasoning that “[n]othing in the allegation that airlines compete everywhere across the United States plausibly supports Plaintiffs’ contention that there are three more precisely delineated geographic markets within the United States[.]” 

While the finding that plaintiffs failed to allege a relevant geographic market alone would have been sufficient to grant Defendants’ motion to dismiss, the Court further noted that plaintiffs failed to plausibly allege anticompetitive effects, even if it had accepted plaintiffs’ market definition.  As the Court explained, in the inter-island Hawai’i market and the Hawai’i to Pacific and Asia market, Alaska Airlines did not compete at all prior to the acquisition of Hawaiian Airlines.  Therefore, the acquisition of Hawaiian Airlines did not remove a competitor from the relevant markets. 

Regarding the Hawaii-U.S. Mainland market, where Alaska Airlines did compete prior to the acquisition, the Court found plaintiffs “pleaded themselves out of being able to show anticompetitive effects” in the defined geographic market based on market share alone.  While plaintiffs alleged that defendants’ combined share in the Hawaii-U.S. Mainland market is 40%, the Court found that this market share would be “fleeting” based on plaintiffs’ allegation that competition in the scheduled passenger air service market occurs across or throughout the United States. 

For these reasons, the Court dismissed plaintiffs’ claims, but deferred decision on whether to grant further leave to amend the complaint.  Plaintiffs must file a letter explaining how they would amend their complaint by May 22.