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CO & Southwest Merger Hypothesis  
User currently offlineContinentalEWR From United States of America, joined May 2000, 3762 posts, RR: 13
Posted (13 years 6 months 4 days 20 hours ago) and read 1761 times:

First of all, let me say that I am not advocating this!!!!
Although I think Southwest is a fine airline, I don't see
these two airlines (or any major US carriers for that
matter) merging. It is a logistical, labor, and customer
service nightmare. However, should US/UA go through,
I think CO and Southwest would not be such an awful
idea. Continental is starting to test its reputation by
offering point to point services, bypassing its hubs at
CLE, EWR, and IAH albeit in limited fashion. Example:
the recent expansion at LGA, the new flights to and
from Richmond, and the possibility of more.

Southwest is of course the king of point to point
flying on the cheap and does it very well. Has been
profitable for nearly every one of its operating years.

Southwest is an all 737 operator. Continental's US
domestic fleet is supported by a large number of
737's. There is virtually no overlap. Southwest is
strong in the west. Continental is not. Layoffs
would not be a real issue. Both carriers have a
strong management team guiding them.

If mergers do have to happen in the industry, I
would much rather see Continental paired off
with Southwest than with Delta or Northwest.
Delta is a fine airline but there is a lot of over-
lap between them and very different philosophies
about how an airline should be run. Northwest
is a run of the mill airline. It is nothing special,
and has gotten better but is no way near CO
or DL in terms of reliability, service levels, and
operational efficiency.

So, what do you all think?

ContinentalEWR

28 replies: All unread, showing first 25:
 
User currently offlineContinentalEWR From United States of America, joined May 2000, 3762 posts, RR: 13
Reply 1, posted (13 years 6 months 4 days 2 hours ago) and read 1664 times:

No one has any thoughts on this? C'mon?

User currently offlineFlashmeister From United States of America, joined Apr 2000, 2896 posts, RR: 6
Reply 2, posted (13 years 6 months 4 days 2 hours ago) and read 1662 times:
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It's simple: Southwest won't merge unless its with a "Southwest clone" of which there are few nowadays.

Name one US carrier that:
- Operates 737s exclusively, and
- Has a route structure designed to avoid crowded, congested, hub airports, and
- Is single-class, and
- Does not give seat assignments, and
- Does not code-share, and
- Does not interline, and
- Operates exclusively on ticketlesss travel

The only reason that Southwest bought Morris Air back in the mid-90s was that Morris did all of these things. (They had "business class", but that ended up just getting you an assigned seat - nothing more)

Southwest and Continental have firm business plans, but they both serve separate niches, and that would be disasterous to comibine them. Continental wants to be full-service, Southwest wants to be low-cost, and you do not get to have both.

My bet is that Southwest knows it still has room to grow and will do so independently.


User currently offlineAKelley728 From United States of America, joined Dec 1999, 2160 posts, RR: 5
Reply 3, posted (13 years 6 months 4 days 1 hour ago) and read 1655 times:

I do see the posibility of some sort of agreement, alliance, maybe even a merger, with WestJet of Canada. They are a self-professed Southwest clone, operate all 737s, etc., etc.


User currently offlineLoneStarMike From United States of America, joined Jul 2000, 3783 posts, RR: 34
Reply 4, posted (13 years 6 months 4 days ago) and read 1635 times:

Another problem would be Houston. Have you ever really looked closely a Southwest's non-stop service out of HOU? The majority of their flights are short to medium-haul, to places like MSY, DAL, AUS, SAT, HRL, CRP, etc. Southwest doesn't fly non-stop to California or Florida. They have only 1 daily non-stop departure to BWI, 3 to LAS, 2 to MDW, 5 to PHX, 7 to BNA, 9 to STL, and 1 to MCI. I think HOU is the better choice of airports for the shorter flights. Southwest wouldn't want to move those flights to IAH. Who wants to drive 45 minutes to IAH to take an hour-long flight?

Continental, OTOH, does have a lot of long-haul non-stops out of IAH, and they've no doubt spent a lot of money in expanding the facilities. I don't think they'd want to move back to HOU and besides, there's no room for them to do that anyway.

So if the 2 merged, you'd have a Continental-Southwest with heavy operations out of both IAH and HOU, and I just don't think it would work.

I could see an alliance between the two, maybe. From what I've read, Herb and Gordon get along pretty well. I think Southwest and Continental go out of their way to notcompete with each other too much. Look at CLE. Southwest has 4 gates there, yet they only have 23 departures a day. They could easily add another 15-20 departures a day but they haven't. At IAH, Southwest only flies 7 times a day to DAL. At DAL, Southwest has about 35 flights a day, but only 7 to IAH. Coninental has 12-14 flights per day from DAL-IAH and none to HOU. The two co-exist very nicely together, with each offering a different product. They don't fight with each other, they don't try to undercut each other's fares, and they don't sue each other in court at the drop of a hat. I have the utmost respect for Continental and Southwest for that very reason. It's too bad that some other AAirlines haven't learned how to do that.

I say keep them separate, but maybe have an alliance. No merger, though, please. I'd rather be able to pick from 2 good airlines instead of 1.

LoneStarMike

User currently offlineBritishmidland From , joined Dec 1969, posts, RR:
Reply 5, posted (13 years 6 months 3 days 20 hours ago) and read 1612 times:

For the sake of throwing this out there ... consider this... RyanAir / Southwest. The key is the 737-700ERX with enough fuel to fly BWI-DUB/STN, MCO-DUB/STN, PVD-DUB/STN, MDW-DUB/STN etc. RyanAir is the Southwest of EuroLand, so why not merge these mofo's. It would be Southwest/RyanAir meet Laker (for the TA's). Think about it... what do you think?

Regards,
BD


User currently offlineContinentalEWR From United States of America, joined May 2000, 3762 posts, RR: 13
Reply 6, posted (13 years 6 months 3 days 20 hours ago) and read 1606 times:

That's ridiculous. Ryanair may be profitable, but it is a terrible airline but at
29 GBP per flight, you have no right to complain. Southwest is an excellent,
dependable, and consistently profitable airline whose formula everyonw would like to mimick. Many have tried, few have succeeded.



User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 17
Reply 7, posted (13 years 6 months 3 days 20 hours ago) and read 1600 times:

No Way, No How. Southwests strategy is low costs. One big way of accomplishing this is one aircraft type. Start throwing different aircraft into the mix and costs go up. Start serving meals or assigning seats on Southwest, costs go up. Try to operate them both as "separate entities" won't work either. Look at "CO Lite". CO has a great product. So does Southwest. But Flashmeister hit the nail on the head - they serve a different niche. You can't blend those in without one or the other, or most likely BOTH suffering.

User currently offlineAWA320 From , joined Dec 1969, posts, RR:
Reply 8, posted (13 years 6 months 3 days 19 hours ago) and read 1594 times:

Continental could use the aircraft to start another hub somewhere out west.

User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 17
Reply 9, posted (13 years 6 months 3 days 19 hours ago) and read 1581 times:

AWA320 - while that would delight America West because their low fare competitor just got taken out of the game, I think that the powers that be in Washington would take a reeeeaaaal close look at the prospect of letting go of the biggest low fare carrier in the US so that CO could start a hub.

User currently offlineFlashmeister From United States of America, joined Apr 2000, 2896 posts, RR: 6
Reply 10, posted (13 years 6 months 3 days 18 hours ago) and read 1574 times:
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Not gonna happen. No way...

They'd have to offer a gargantuan premium for WN to get them...


User currently offlineMls515 From United States of America, joined Jun 2000, 3076 posts, RR: 9
Reply 11, posted (13 years 6 months 3 days 18 hours ago) and read 1573 times:

>Name one US carrier that:
>- Operates 737s exclusively, and
>- Has a route structure designed to avoid crowded,
> congested, hub airports, and
>- Is single-class, and
>- Does not give seat assignments, and
>- Does not code-share, and
>- Does not interline, and
>- Operates exclusively on ticketlesss travel

Vanguard.
Vanguard. (some airports are, but so are some of Southwest's)
Vanguard.
they do give seat assignments.
Vanguard.
don't know what 'interline' is.
Vanguard.

5 out of 8 ain't bad.


User currently offlineTWAneedsNOhelp From , joined Dec 1969, posts, RR:
Reply 12, posted (13 years 6 months 3 days 18 hours ago) and read 1570 times:

Yeah, if anything it would be a CO buyout, but I don't expect it to happen. Its like National and Pan Am, the two are just so different. WN won't merge with anyone especially not RyanAir.

User currently offlineGreggj From , joined Dec 1969, posts, RR:
Reply 13, posted (13 years 6 months 3 days 18 hours ago) and read 1567 times:

Vanguard is another airline run by teenagers (the other being AmWest. It's not a serious contender in the airline field...

User currently offlineMls515 From United States of America, joined Jun 2000, 3076 posts, RR: 9
Reply 14, posted (13 years 6 months 3 days 18 hours ago) and read 1566 times:

How about you back up that statement with facts and tell us about all your experiences with Vanguard.

User currently offlineScottB From United States of America, joined Jul 2000, 6574 posts, RR: 32
Reply 15, posted (13 years 6 months 3 days 18 hours ago) and read 1560 times:

First of all, CO wouldn't be able to buy out Southwest - in fact, I don't think any of the other airlines could. Why? Because Southwest has the largest market capitalization of them all. Too expensive. Besides, CO is trying to cater to the upper end of the market, while WN goes for the lower end (along with business travelers who look for frequency and reasonable fares). Similar corporate culture and approach to employee relations, but trying to merge the business strategies would be a disaster.

As to Vanguard... Why would they ever buy Vanguard? Vanguard isn't currently profitable, and it looks to me like they're well on their way to the corporate equivalent of a controlled flight into terrain (Costs too high, load factors too low). They operate a bunch of 737-200's, which Southwest is phasing out of their fleet. And most of the places they fly are airports WN has assiduously tried to avoid - DEN, ATL, PIT, MSP, etc. Not to be the voice of gloom and doom, but were Vanguard to go under, Southwest could probably pick up the assets it wanted more cheaply in the Bankruptcy Court. I've not flown them, but I hope they turn things around!

Frontier *might* have been a possibility if they hadn't gone Airbus. I don't know if their profitable operation at DEN, based on SWA's model, would have made Herb go back there. Didn't he say something like Hell would freeze over first?


User currently offlineMls515 From United States of America, joined Jun 2000, 3076 posts, RR: 9
Reply 16, posted (13 years 6 months 3 days 18 hours ago) and read 1554 times:

I've flown Vanguard. They're a good airline as far as service goes, but you're right. They're not on the right business track. I'm afraid they'll phase out of existence in the next couple of years.

User currently offlineLoneStarMike From United States of America, joined Jul 2000, 3783 posts, RR: 34
Reply 17, posted (13 years 6 months 3 days 16 hours ago) and read 1544 times:

Herb said Southwest would return to DEN "When cows fly". If they ever do go back, I guess they'll have a new special livery jet called Bovine One

LoneStarMike

User currently offlineRepublic From Canada, joined Dec 2012, 0 posts, RR: 0
Reply 18, posted (13 years 6 months 3 days 15 hours ago) and read 1543 times:

Two major obstacles:

First, Northwest owns 14% of CO. More importantly, NW controls the voting shares of CO. Hence, NW controls any potential merger by CO. A CO/WN merger is not in NW's interests.

Second, a hypothetical CO/WN merger would face the same type of merger problems as DC is with a potential UA/US merger. CO/WN make up the majority of traffic out of Houston. Now they would have to create a new version of DCAir, a HouAirways or something of the like.

Interesting question though.

Republic


User currently offlineFjnovak1 From United States of America, joined Apr 2000, 600 posts, RR: 2
Reply 19, posted (13 years 6 months 3 days 15 hours ago) and read 1538 times:

One more interesting thing to note; a few, if not all of Vanguard's 737-200adv jets are ex-Southwest planes already.

Thus its unlikely they'd merge or be united in bankruptcy court. If WN had those planes once and got rid of them, why would they want them back?

I know this wouldn't likely happen because costs are too high, but Aloha Airlines and Southwest would be a good match fleetwise. It'd be cool to see the Southwest 737-700s flying across to Honolulu and short hopping to Maui! Maybe an alliance with Aloha and WestJet is possible years and years down the road....



Go Blue!!
User currently offlineFlashmeister From United States of America, joined Apr 2000, 2896 posts, RR: 6
Reply 20, posted (13 years 6 months 3 days 15 hours ago) and read 1533 times:
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Actually, Frontier is very profitable at DEN, but they also cater to business travellers - they have a first class now (I think), and they do all of the interlining, assigned seating, etc., that I mentioned in my previous post. They could have been a viable merger partner, but not now, especially because of the Airbus deal.

User currently offlineEVA744 From , joined Dec 1969, posts, RR:
Reply 21, posted (13 years 6 months 3 days 11 hours ago) and read 1509 times:

Speaking of Market Cap....

WN has the market cap of UA, AA and DL combined!

That's right boys and girls ... WN could in effect do a stock-swap buy-out with UA, AA and DL and own them all. Interesting huh?

EVA744


User currently offlineMls515 From United States of America, joined Jun 2000, 3076 posts, RR: 9
Reply 22, posted (13 years 6 months 3 days 10 hours ago) and read 1508 times:

Really.....

That reminds me of the movie Demolition Man, "Now all restaurants are Taco Bell."


"Now all airlines are Southwest Airlines."  


User currently offlineNY-JFK-LGA From United States of America, joined Jan 2000, 374 posts, RR: 1
Reply 23, posted (13 years 6 months 3 days 10 hours ago) and read 1501 times:

If there was to one airline in our skies, I most DEFINITELY would NOT want that one with the "shit colors."


Bring back McDonnell Douglas & T W A!!
User currently offlineMls515 From United States of America, joined Jun 2000, 3076 posts, RR: 9
Reply 24, posted (13 years 6 months 3 days 10 hours ago) and read 1499 times:

Colors, now that's a good measure of the quality of an airline!

25 AWA320 : Just letting you know, that my response on this thread earlier was just because I was bored. There are hundreds of reasons why this would NEVER happen
26 Post contains images ScottB : Actually I thought Vanguard was getting its 732's from USAirways - the ones they decided they wouldn't need for MetroThreat. I looked at the 737-100/2
27 747-451 : I don't think CO is going to do anything, since Northwest owns a chunk of them. What may happen is Northwest may purchase CO, since it would enhance N
28 EVA744 : If CO were to buy Frontier, that would be interesting, because CO could still operate them seperately, ie: feed. Frontier would be itself a self-suppo
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