Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS—D. Haw.: Remanded airline merger action still does not fly, (Apr 27, 2026)

By Sara Cracau, J.D.

Amended complaint sufficiently alleged Article III standing but failed to show a sufficient basis for divestiture or injunctive relief or adequately allege anticompetitive effects.

On remand from the Nonth Circuit, the federal district court in Hawaii has granted two merged airlines their motion to dismiss an antitrust action brought by a group of regular airline passengers. Although the airline passengers adequately alleged Article III standing, they failed to allege a sufficient basis for divesture or injunctive relief. Furthermore, they failed to state a valid antitrust claim for relief, having failed to plausibly allege a geographic market, and failed to adequately allege anticompetitive effects. The court reserved decision on whether to grant further leave to amend. The passengers sought to undo a merger of Alaska and Hawaiian Airlines, alleging that the acquisition had the effect of curbing competition and was unlawful (Yoshimoto v. Alaska Airlines, Inc., No. 1:24-cv-00173-MWJS-WRP (D. Haw. Apr. 24, 2026)).

Background. A group of regular airline passengers brought a private antitrust action against two airline companies seeking to undo a merger of Alaska and Hawaiian Airlines. The district court dismissed the initial complaint for failure to allege Article III standing but provided the passengers the opportunity to amend their complaint.

The U.S. Court of Appeals for the Ninth Circuit found the district court was correct to dismiss the complaint for not identifying "sufficiently imminent" injury from the merger, and that it didn't abuse its discretion in denying a temporary restraining order or ruling without holding a scheduled hearing on the motion to dismiss. However, The Ninth Circuit panel also found the district court erred in dismissing the complaint without leave to amend for reasons of futility. It remanded the case with instructions to grant Plaintiffs leave to amend the complaint.

Remand. On remand, the airlines moved to dismiss the first amended complaint (FAC) which alleged that the merger resulted in anticompetitive effects, alleging violations of section 1 of the Sherman Act and section 7 of the Clayton Act. It sought a declaratory judgment that the merger agreement was unlawful, a permanent injunction against the continued acquisition, and divestiture and disgorgement of any profits earned since the acquisition. The passengers requested an immediate temporary restraining order. Examples of the allegations included that the passengers experienced increased fees, reduced services, and fewer available flights on key routes between Hawaii and the U.S. mainland. In addition, they alleged that the guardrails that had been put in place provided temporary assurances only and were effective for six years from the acquisition. Among the allegations, the passengers contended that the acquisition eliminated a competitor in the airline industry, giving Alaska 40 percent of the Hawai’i US-mainland market and allowed Alaska to buy its way into the interisland market that was taken over Hawaiian’s share of more than 60 percent.

Article III standing. The FAC rectified the deficiencies in the original complaint by alleging that each of the six named passengers who brought the action had regularly traveled on Hawaiian and some on Alaska both within Hawai’i and between Hawai’i and the continental United States.

Divestiture or injunctive relief. Because the record did not support the requested relief of divestiture and because the passengers abandoned the issue by failing to address Alaska’s arguments, the court dismissed the FAC’s requested relief of divestiture with prejudice. Although the passengers did not abandon their request for injunctive relief, they did not offer a persuasive argument to salvage it. They must show “threatened loss or damage of the type the antitrust laws were designed to prevent.” They merely offered conclusory assertions that they continued to be threatened with future loss without offering any factual basis to support the argument.

Claim for relief. The court concluded that the FAC failed to adequately allege a geographic market, which alone was sufficient to dismiss the FAC. This failure stemmed from a failure to offer sufficient factual support for the allegation which supports the case for granting further leave to amend. Although a court must accept all factual allegations in a complaint as true, it is not required to accept as true mere conclusory allegations.

The court also concluded that the FAC failed to plausibly allege that the merger would probably lead to anticompetitive effects in relevant geographic markets. In the two geographic markets of relevance, the FAC acknowledged that the airline group did not compete in those markets at all prior to the merger. Because the airline group’s purchase of the second airline did not decrease its market share or the concentration of competitors in that market, the airline passengers failed to plausibly allege that the transaction was anticompetitive in those markets. Although the passengers generically asserted that all airlines have the theoretical ability to compete anywhere in the United States, they did not offer any factual allegations to plausibly show that Alaska was threatening to enter the ”Interisland in Hawai’i” market or the “Hawai’i to Pacific and Asia” market.” The analysis with respect to this market was a bit more complex as both airlines competed in twelve identified routes before the merger, Alaska holding 17 percent of the market and Hawaiian holding 23 percent of the market, resulting in a single airline that enjoyed 40 percent of the seat capacity of that market. However, because the passengers asserted that airlines were free to compete anywhere in the United States, they precluded themselves from arguing that the current market share of these two airlines combined would vest them with undue market power within that market.

There were certain allegations that the merger may threaten the Hawaii economy and the wellbeing of the state’s people, but the court did not find that these allegations alone supported a private antitrust action. The FAC did reference various “economic readjustments” as being harmful and continuing to impose harm but failed to provide any factual allegations that showed that those readjustments had anticompetitive effects. Therefore, the FAC failed to adequately allege anticompetitive effects in the proposed geographic markets.

Leave to amend. The court dismissed a request for divestiture with prejudice and without leave to amend. However, it reserved decision on whether to grant further leave to amend with respect to plaintiffs’ failures (1) to allege an adequate factual basis for their requested injunctive relief; to allege a valid geographic market; and (3) to allege anticompetitive effects within any proposed geographic market.

The court provided an opportunity to the passengers to file a letter explaining how, if given further leave, they would amend the FAC to sufficiently state a claim in light of this court’s ruling. The letter must be filed with the court no later than May 22, 2026, and must meet several requirements set out by the court.

Because the court dismissed the complaint, a motion for a temporary restraining order and Alaska’s counter-motion to strike Plaintiff’s expert report were denied as moot.

The Case is No. 1:24-cv-00173-MWJS-WRP.

Judge: Smith, M.

Attorneys: Andrew James Lautenbach (Starn O'Toole Marcus & Fisher) for Warren Yoshimoto. Brian P. Quinn (O'Melveny & Myers, LLP) for Alaska Airlines, Inc. and Alaska Air Group, Inc.

Companies: Alaska Airlines, Inc.; Alaska Air Group, Inc.

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