Alaska Airlines and Hawaiian Airlines have received the green light for their planned merger, as announced by the U.S. Department of Transportation on Tuesday. However, the merger comes with certain conditions that the carriers must adhere to. These conditions include the preservation of the value of their airline reward systems and the maintenance of key routes.

This approval from the U.S. Department of Transportation follows last month's clearance from the U.S. Justice Department's review of the airlines' $1.9 billion merger agreement. The DOT now holds the authority to review airline mergers and has set forth specific conditions for Alaska Airlines and Hawaiian Airlines.

As part of the approval, the DOT has mandated that the airlines guarantee the ongoing value of miles earned in their respective loyalty programs, HawaiianMiles and Alaska Mileage Plan. Existing miles must be protected from expiration, and their transfer should be maintained at a 1:1 ratio upon the implementation of the combined loyalty point system.

Furthermore, the DOT emphasized the importance of preserving "essential air support" for rural areas, ensuring that these regions continue to receive adequate services. Additionally, the airlines are expected to uphold the current levels of passenger and cargo routes between the Hawaiian islands.

U.S. Secretary of Transportation Pete Buttigieg highlighted these requirements during a press call, emphasizing the need to sustain connectivity and service across the region. He also noted that while the airlines can proceed with the process of closing the merger, they still await approval for a transfer application that would allow them to operate international routes under a unified certificate.

The announcement of the planned merger, made by Alaska Airlines and Hawaiian Airlines in December, stated that the two carriers would retain their respective brands. However, they would operate under a single platform, combining a fleet of over 360 aircraft and offering passengers access to more than 130 destinations.

In addition to the aforementioned conditions, Hawaiian Airlines will also need to adopt Alaska Airlines' practices with regards to family seating, ensuring that families are seated together without any additional charges. Moreover, they will need to provide compensation in cases where significant flight delays or cancellations occur as a result of the airline's actions.

Following the news of the merger approval, Hawaiian Airlines' stock saw an increase of nearly 4% during afternoon trading.

The next steps for Alaska Airlines and Hawaiian Airlines will involve obtaining the necessary approvals for the transfer application, allowing them to begin operating international routes under a single certificate.