Airlines Strategy
Alaska Air Group Secures Natixis Loan to Modernize Fleet Post Merger
Alaska Air Group partners with Natixis CIB to finance Boeing 787 and 737 MAX jets, supporting fleet growth after Hawaiian Airlines acquisition.
Alaska Air Group’s recent partnership with Natixis Corporate & Investment Banking (Natixis CIB) for the financing of Boeing 737 MAX 8 and Boeing 787-9 aircraft marks a pivotal step in the airline’s post-merger expansion strategy. Announced in August 2025, this senior secured term loan comes less than a year after Alaska completed its $1.9 billion acquisition of Hawaiian Airlines, creating the fifth-largest airline in the United States. The financing arrangement covers a Boeing 787-9 operated by Hawaiian Airlines and a Boeing 737 MAX 8 operated by Alaska Airlines, with Natixis CIB serving as both Mandated Lead Arranger and Lender.
This strategic financing underscores Alaska Air Group’s commitment to fleet modernization and network expansion as the company integrates two distinct airline operations. The transaction is emblematic of broader trends in the aviation industry, where carriers seek innovative financial solutions to support growth and adapt to evolving market demands.
As Alaska and Hawaiian integrate into a combined carrier, the Natixis CIB deal serves as a foundation for operational synergy, efficiency, and the pursuit of new international markets. The move is also a signal to the industry about the importance of robust financial partnerships in supporting ambitious transformation.
Alaska Air Group’s emergence as a major force in U.S. aviation accelerated with its acquisition of Hawaiian Holdings Inc. The merger, announced in December 2023 and completed in September 2024, was the product of years of speculation about the potential synergies between Alaska’s primarily domestic, narrow-body focused operation and Hawaiian’s international, wide-body network. The rationale centered on Alaska’s desire to expand beyond its West Coast stronghold and provide Hawaiian with the stability needed to compete in a consolidated industry.
Financially, Alaska agreed to pay $18 per share in cash for Hawaiian, for an equity value of about $1 billion, plus assumption of $900 million in debt, totaling $1.9 billion. This represented a substantial premium over Hawaiian’s pre-announcement valuation, which had dipped as low as $4 per share in late 2023. For Hawaiian, the deal was viewed as a financial lifeline after pandemic-driven losses and operational challenges.
Regulatory approval was a key hurdle, given the Biden administration’s scrutiny of airline consolidation. The U.S. Department of Justice’s review period expired in August 2024, effectively clearing the merger. The Department of Transportation subsequently approved the deal with conditions to protect consumer interests, such as maintaining service on key routes and honoring loyalty program rewards. The combined entity now operates under both brands, with integration led by Alaska CEO Ben Minicucci, who emphasized maintaining Hawaiian’s cultural identity while leveraging operational synergies.
“We are committed to preserving what makes both Alaska and Hawaiian unique while building a stronger, more competitive airline for the future.” — Ben Minicucci, CEO, Alaska Air Group
The integration process is expected to span several years, with the ultimate goal of achieving a single operating certificate from the FAA by late 2025. The merger not only expands Alaska’s network but also brings together two different operational models, requiring careful alignment of fleets, staff, and customer offerings.
The senior secured term loan from Natixis CIB, announced in August 2025, is tailored to support Alaska Air Group’s fleet modernization amid its integration with Hawaiian Airlines. Natixis CIB’s role as Mandated Lead Arranger and Lender highlights the bank’s confidence in Alaska’s strategic direction and its commitment to the aviation sector.
The financing covers two aircraft: a Boeing 787-9 for Hawaiian Airlines, supporting long-haul Pacific routes, and a Boeing 737 MAX 8 for Alaska Airlines, bolstering domestic and short-haul international operations. The 787-9 is critical for Hawaiian’s transpacific services, offering advanced fuel efficiency and range, while the 737 MAX 8 continues Alaska’s tradition of operating a standardized, fuel-efficient narrow-body fleet.
Cecilia Peteuil, Director of Aviation Americas at Natixis CIB, stated, “We are thrilled to support Alaska Air Group in financing one wide-body aircraft for Hawaiian Airlines and one narrow-body aircraft for Alaska Air. We look forward to continuing our partnership as they advance the integration with Hawaiian Airlines.” This suggests the financing is part of a broader, ongoing relationship.
“The senior secured structure provides collateral protection for the lender and competitive rates for Alaska Air Group, supporting operational flexibility and strategic growth.”
The loan’s secured structure means the aircraft themselves serve as collateral, a standard approach in aviation finance. This allows Alaska Air Group to access capital for strategic acquisitions while maintaining conservative debt metrics; as of mid-2024, the company’s debt-to-capitalization ratio was 45%, within its target range.
Alaska Air Group’s modernization strategy extends beyond the Natixis-financed aircraft, reflecting a comprehensive approach to optimizing both narrow- and wide-body operations. The company has exercised purchase options for five additional Boeing 787-9s, bringing its total firm commitment to 13 units. This marks a significant shift for Alaska, traditionally a narrow-body operator, and leverages Hawaiian’s international expertise.
The 787-9 expansion supports Alaska’s international ambitions, including the launch of its first transatlantic route from Seattle to Rome in May 2026. This service, to be operated with the 787-9, targets an underserved market and positions Seattle as a major hub for both Pacific and European travel. The aircraft’s fuel efficiency and range make it ideal for such long-haul routes, which are otherwise dominated by larger, less efficient planes.
On the narrow-body side, Alaska has committed to 12 additional Boeing 737 MAX 10s, the largest variant in the MAX family. The MAX 10 offers increased capacity and range, providing flexibility for high-density domestic routes. Alaska’s standardized fleet approach, currently operating six 737 variants, yields operational efficiencies in training, maintenance, and inventory.
“Fleet standardization and fuel-efficient aircraft are key to Alaska Air Group’s cost control and operational reliability.”
Hawaiian Airlines’ fleet, which includes Boeing 787-9s, Airbus A330s, Boeing 717s, and Airbus A321neos, presents both opportunities and challenges for integration. The diversity reflects Hawaiian’s unique operational needs, especially for inter-island service. Alaska’s management has indicated that rationalization will be a long-term process, given the specialized requirements of Hawaiian’s network.
In June 2025, Alaska added its 300th Boeing 737, underscoring its commitment to Boeing and operational efficiency. The combined group’s modernization efforts are not only about expanding capacity but also about ensuring sustainability and competitiveness in a rapidly changing industry.
Alaska Air Group’s financial health provides a solid foundation for its ongoing integration and fleet expansion. In Q2 2024, the company reported net income of $220 million ($1.71 per share) under GAAP, down slightly from the previous year. Adjusted net income, excluding special items, reached $327 million ($2.55 per share), demonstrating strong underlying performance.
Operationally, Alaska achieved a completion rate of 99.5% in Q2 2024, among the highest in the domestic industry. The adjusted pretax margin was 15.8%, outpacing most competitors. Total operating revenue for the quarter was $2.9 billion, with passenger revenue accounting for $2.65 billion. The Mileage Plan loyalty program contributed $174 million, highlighting the importance of frequent flyer engagement.
The company’s liquidity remains robust, with $2.5 billion in unrestricted cash and marketable securities as of June 2024. Operating cash flow of $580 million supports both debt service and capital investments. The integration with Hawaiian is beginning to show benefits, with Q2 2025 adjusted earnings per share of $1.78 (beating analyst expectations) and total revenue of $3.7 billion on a pro forma basis.
“Alaska Air Group’s conservative financial management and strong liquidity position it well for continued investment and resilience amid industry volatility.”
However, integration has brought near-term cost pressures, especially from union labor agreements and higher maintenance costs due to fleet diversity. Wages and benefits increased 49% year-over-year, and maintenance costs rose 86%, partially offset by lower fuel prices. These challenges are expected to moderate as integration progresses and synergies are realized.
The aircraft financing market in 2025 is shaped by production constraints, delivery delays, and evolving capital market conditions. As Boeing and Airbus ramp up deliveries, airline financing needs are projected to rise significantly. Interest rates and credit market shifts influence the cost and structure of aircraft finance deals.
Lease rates for new Boeing 737 MAX 8 aircraft have stabilized around $400,000 per month, with market values near $55 million. The recovery in MAX 8 values reflects renewed confidence after previous safety and certification issues. For wide-bodies, Boeing 787-9s command lease rates of roughly $1.05 million per month, slightly below the Airbus A350-900, reflecting both demand and supply dynamics.
Financing structures like the senior secured loan used by Alaska and Natixis remain popular, offering competitive rates and asset-backed security. As airlines pursue fleet renewal and expansion, strong relationships with global financial institutions are increasingly important. Environmental considerations also play a role, as newer aircraft offer substantial emissions reductions compared to older models.
“Aircraft financing is evolving to meet the demands of a changing industry, balancing cost, flexibility, and sustainability.”
The Alaska-Natixis transaction exemplifies how carriers and financiers are collaborating to navigate supply chain constraints, regulatory shifts, and competitive pressures, all while positioning for future growth.
Alaska Air Group’s senior secured term loan with Natixis CIB is more than a simple financing arrangement, it is a strategic enabler for the airline’s modernization and expansion in the wake of its transformative merger with Hawaiian Airlines. The deal supports the acquisition of advanced, fuel-efficient aircraft that will underpin the group’s network growth and operational efficiency for years to come.
As the combined carrier continues to integrate operations, expand internationally, and invest in its fleet, the partnership with Natixis CIB highlights the critical role of innovative financial structures in supporting airline transformation. The industry will be watching closely as Alaska Air Group navigates integration challenges, pursues new market opportunities, and sets a course for sustainable, profitable growth in a complex aviation landscape.
Q: What aircraft are included in the Natixis CIB financing for Alaska Air Group?
Q: Why did Alaska Air Group acquire Hawaiian Airlines?
Q: What are the benefits of the senior secured loan structure?
Q: How is Alaska Air Group’s fleet strategy changing post-merger?
Q: What is the significance of the Seattle-to-Rome route?
Alaska Air Group’s Strategic Aircraft Financing: Natixis CIB Supports Fleet Modernization Amid Hawaiian Airlines Integration
Strategic Background and Merger Context
Natixis CIB Financing Transaction Analysis
Strategic Fleet Modernization and Expansion
Financial Performance and Market Position
Industry Context and Aircraft Financing Trends
Conclusion
FAQ
A: The financing covers one Boeing 787-9 for Hawaiian Airlines and one Boeing 737 MAX 8 for Alaska Airlines.
A: The acquisition aimed to expand Alaska’s network beyond the West Coast, provide Hawaiian with financial stability, and create operational synergies for both carriers.
A: This structure offers collateral protection for the lender (the aircraft serve as security) and allows Alaska Air Group to access capital at competitive rates while maintaining balance sheet flexibility.
A: Alaska is expanding its wide-body fleet for international routes, standardizing narrow-body operations, and integrating Hawaiian’s diverse fleet over time.
A: It marks Alaska’s first transatlantic service, leveraging the new 787-9 fleet and positioning Seattle as a global hub.
Sources
Photo Credit: Alaska Airlines – Montage