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Alaska Airlines Merger  
User currently offlinePaaclipper707 From United States of America, joined Jan 2006, 50 posts, RR: 0
Posted (7 years 10 months 6 days 11 hours ago) and read 14574 times:

I do believe this topic has been mentioned before, I apologize in advance if it irritates anyone, this is not my intention.

In light of the recent merger business, I'm wondering about Alaska Airlines?

Can anyone give some information or thoughts about an AS merger?
I would appreciate a proper discussion without volatile emotion.

Thank you most sincerely,
Your Friend


PAN AMERICAN -Dont Leave the Country Without Us-
80 replies: All unread, showing first 25:
 
User currently offlineJaws707 From United States of America, joined Aug 2001, 708 posts, RR: 1
Reply 1, posted (7 years 10 months 6 days 10 hours ago) and read 14509 times:

We had a topic the other week about the possibility of AirTran and Alaska merging. You should find it if you do a search. Some people were saying Alaska and Continental might be a good fit, and many are saying an airline like Alaska tries to be distinctive and has no intention of merging. Just for speculation (and I realize their fleets are completely different) but Alaska and Frontier would create a dominent force in the Western US.

User currently offlineRampart From United States of America, joined Aug 2005, 3139 posts, RR: 6
Reply 2, posted (7 years 10 months 6 days 9 hours ago) and read 14430 times:

Correct me if I'm wrong, but doesn't AS have a sizeable "poison pill" in place to discourage such takeovers? (unless they initiated something on their own)

-Rampart


User currently offlineHPRamper From United States of America, joined May 2005, 4058 posts, RR: 8
Reply 3, posted (7 years 10 months 6 days 9 hours ago) and read 14423 times:

Alaska and Frontier would be a nice fit together, except for their commitment to totally separate aircraft types. AS may not want to merge, but as far as I know they've been hovering on the line in terms of profitability, not losing much but not making much. They also have an excellent regional, QX, that dominates the Pacific Northwest and has been expanding routes in California.

Before the US/HP merger I thought HP/F9 would be an interesting pair. Right now Alaska already rules the roost as far as north-south routes along the west coast; a Frontier merger would only add a maximum of around ten daily flights to even the largest airports so the result would be minimal. Still, a hub at DEN could be useful as well as F9's east-west routes.

I get a lot of disagreement but I think F9 and B6 would be excellent seeing as JetBlue needs a western hub and Frontier is ordering A320s (IIRC). A lot of people say SLC is a better fit...I just don't think the O&D there can support BOTH DL and B6 hubs - unless of course something happens with DL resulting in changes for SLC. There could of course be an LCC supermerger between Frontier, JetBlue and Spirit someday  Smile


User currently offlineMariner From New Zealand, joined Nov 2001, 25292 posts, RR: 85
Reply 4, posted (7 years 10 months 6 days 9 hours ago) and read 14363 times:
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Alaska is probably one of the most attractive airlines out there as a takeover candidate.

Generally well run, with a splendid west coast network, a lock on Alaska and some very valuable rights to Mexico that can't be duplicated.

Plus, they have about a billion dollars in cold, hard cash sitting in the bank.

The problem is that Wall Street knows this. Given that it is not a "huge" airline, the stock price is up there at $43, giving it a market cap not far shy of $2 billion.

Shareholders would expect a decent premium over the present stock price, so it would be a very expensive airline to buy.

Still, it is attractive, but I don't think Airtran would be in the market for it - too expensive. Would Alaska want Airtran? I'm not sure. If US/DL does succeed, it could turn the whole of the southeast into Fortress Delta.

Continental might be a buyer, but I'd guess that if Continental does enter the merger fray they'd be looking at something bigger in the first instance, another legacy carrier.

Quoting Jaws707 (Reply 1):
Alaska and Frontier would create a dominent force in the Western US.

This has been talked about for years, it is a favorite rumor among Alaska's pilots. When Alaska said they were "looking at" Airbus aircraft, the gossip about Frontier reached fever pitch. But Alaska was "just looking" and (to no one's surprise) stayed with Boeing.

Even so, everyone thought that when Horizon started flying for Frontier it was a sign it might happen, but now Horizon is dropping that, and there is no other evidence that Alaska is even interested.

Then again, we have no idea what the Alaska CEO thinks of mergers, they can be very difficult. Mr. Parker of US is clearly fond of them, he sees them as a way of increasing shareholder value. But what would improve Alaska's shareholder value?

mariner



aeternum nauta
User currently offlineN328KF From United States of America, joined May 2004, 6485 posts, RR: 3
Reply 5, posted (7 years 10 months 6 days 8 hours ago) and read 14258 times:

I do think CO and AS would be great. Not much route overlap, and you could just call pull an Air Mike and rename Alaska to "Continental Alaska" for the Alaska-only routes. And SEA would give CO a focus city in an area that they're geographically weak.


When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
User currently offlineGmcc From United States of America, joined Apr 2006, 190 posts, RR: 0
Reply 6, posted (7 years 10 months 6 days 8 hours ago) and read 14189 times:

Quoting Mariner (Reply 4):
Generally well run, with a splendid west coast network, a lock on Alaska and some very valuable rights to Mexico that can't be duplicated.

As was broght up in the thead last week, AA is weak on the west coast and codeshares with AS already so if there was a merger I would see them going to AA. I however would prefer them to stay independent.


User currently offlineCageyjames From United States of America, joined Nov 2006, 321 posts, RR: 0
Reply 7, posted (7 years 10 months 6 days 7 hours ago) and read 14062 times:

Quoting Gmcc (Reply 6):
As was broght up in the thead last week, AA is weak on the west coast

Why is it when I see that I am reminded about AirCal and Reno Air? How many west coast airlines must they destroy?


User currently offlineFewsolarge From United States of America, joined Dec 2004, 409 posts, RR: 0
Reply 8, posted (7 years 10 months 6 days 7 hours ago) and read 14047 times:

AS would be a really attractive match for anyone, with the possible exception of UA. Maybe one reason for not selling is that although they've got a great portfolio, the economic conditions to get the maximum price haven't been there for the last five years.

User currently offlineRampart From United States of America, joined Aug 2005, 3139 posts, RR: 6
Reply 9, posted (7 years 10 months 6 days 7 hours ago) and read 14033 times:

Quoting Gmcc (Reply 6):
AA is weak on the west coast and codeshares with AS already so if there was a merger I would see them going to AA. I however would prefer them to stay independent.

I agree with the independence vote. It was AA's fault for squandering AirCal and Reno Air, dooming them to futile oblivion rather than using them for West Coast ops. Why would AA not do the same to AS? Would they really care to operate intra-Alaska?

-Rampart


User currently offlineBriguy1974 From United States of America, joined Aug 2005, 133 posts, RR: 0
Reply 10, posted (7 years 10 months 6 days 7 hours ago) and read 14012 times:

AA leave all west coast airlines alone please.... do not screw anymore west coast cities out of good airline service. AS would work with just about every airlines hubs or lack of with there dominate positions in PDX and SEA. unfortunate this does not give CO anything that they have said the wanted...
like an Asian hub and LHR rights. They could develop either SEA or PDX as an Asian hub but CO or AS does not have the frames...


User currently offlineN328KF From United States of America, joined May 2004, 6485 posts, RR: 3
Reply 11, posted (7 years 10 months 6 days 7 hours ago) and read 13968 times:

Quoting Rampart (Reply 9):
Would they really care to operate intra-Alaska?

Many of the Alaska routes are subsidized, so I'm sure that any purchaser would have to guarantee operation of those routes.



When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
User currently offlineEA CO AS From United States of America, joined Nov 2001, 13609 posts, RR: 61
Reply 12, posted (7 years 10 months 6 days 7 hours ago) and read 13902 times:
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Quoting Mariner (Reply 4):
Then again, we have no idea what the Alaska CEO thinks of mergers

None of the officers are fans of mergers. Their plan is to keep Alaska Air Group as an independent entity, growing at anywhere from 3-8% per year.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineTravelin man From United States of America, joined Mar 2000, 3505 posts, RR: 0
Reply 13, posted (7 years 10 months 6 days 6 hours ago) and read 13860 times:

I still think that a CO/AS partnership makes the most sense, from a complementary route perspective, as well as a fleet compatibility perspective.

I'm sure AS would like to remain independent, but if it were to merge/be purchased, I think CO makes the most sense.

And please no discussion of AA. As mentioned, they've ruined enough West Coast airlines.


User currently offlineJetdeltamsy From United States of America, joined Nov 2000, 2987 posts, RR: 8
Reply 14, posted (7 years 10 months 6 days 6 hours ago) and read 13828 times:

I think American or Contiental are the two most likely to acquire Alaska, should that ever happen. Both need a stronger west coast presence and they'd get the best with Alaska.


Tired of airline bankruptcies....EA/PA/TW and finally DL.
User currently offlineFLY777UAL From United States of America, joined May 1999, 4512 posts, RR: 3
Reply 15, posted (7 years 10 months 6 days 6 hours ago) and read 13824 times:

To throw some more fuel on the fire:

why would the airline have to be mainland-based?  Smile

F L Y 7 7 7 U A L


User currently offlineQXatFAT From Israel, joined Feb 2006, 2405 posts, RR: 5
Reply 16, posted (7 years 10 months 6 days 6 hours ago) and read 13799 times:

AS is not going to merge with anyone. They are doing fine as it is. QX gives them so much as well with its amazing buisness and even here in California it is slowly taking over.

So whats next now for these threads? I can only count how many are going to be started because of the US proposal to DL. Everyones asking about mergers? CO, DL, NW, UA, AS, F9, B6, FL, WN, AA, G4, did I miss any? Go ahead and everyone take an airline and start your thread for mergers. Gosh how many more of these things must we go threw!  Yeah sure



Don't Tread On Me!
User currently offlineDesertAir From Mexico, joined Jan 2006, 1462 posts, RR: 0
Reply 17, posted (7 years 10 months 6 days 6 hours ago) and read 13722 times:

I would hate to see the demise of Alaska Airlines. It is one of the few surviving airlines of the west. All of our colorful west coast airlines have been merged into the drad mega carriers. AA did in AirCal and Reno Air, US destroyed PSA, Delta did in Western.
Alaska has carved out a unique market in the West, Baja California and Mexico mainland.


User currently offlineDesertAir From Mexico, joined Jan 2006, 1462 posts, RR: 0
Reply 18, posted (7 years 10 months 6 days 6 hours ago) and read 13720 times:

I would hate to see the demise of Alaska Airlines. It is one of the few surviving airlines of the west. All of our colorful west coast airlines have been merged into the drab mega carriers. AA did in AirCal and Reno Air, US destroyed PSA, Delta did in Western.
Alaska has carved out a unique market in the West, Baja California and Mexico mainland.


User currently offlineCpw From United States of America, joined Mar 2006, 40 posts, RR: 0
Reply 19, posted (7 years 10 months 6 days 5 hours ago) and read 13664 times:

Quoting DesertAir (Reply 17):
I would hate to see the demise of Alaska Airlines. It is one of the few surviving airlines of the west. All of our colorful west coast airlines have been merged into the drad mega carriers. AA did in AirCal and Reno Air, US destroyed PSA, Delta did in Western.
Alaska has carved out a unique market in the West, Baja California and Mexico mainland.

If anything, I think people have it the wrong way -- Alaska would be more likely to purchase another airline than merging/losing its identity. As was mentioned earlier in the thread, AS has almost $1B in the bank, is in strong financial condition, and making great strides toward consistently being profitable. Plus, fleet commonality will be a huge plus... I look forward to the day when the MD-80s are gone.

Would they actually acquire or be acquired? Highly unlikely. Consistant growth through an expansion of the network to areas previously unserved is the key. Plus (and many Alaskans will probably debate this, but it's at least partially true) Alaska's strength is providing mostly one-connection service to the continental US from metropolitan areas of Alaska (if you're in Adak, you might have 2 connections, but hey...).

Still, I think they'd be much more likely to acquire than be acquired.


User currently offlineFewsolarge From United States of America, joined Dec 2004, 409 posts, RR: 0
Reply 20, posted (7 years 10 months 6 days 5 hours ago) and read 13649 times:

Quoting FLY777UAL (Reply 15):
why would the airline have to be mainland-based?

That's right ... JetBlue is on Long Island!  duck 


User currently offlineQXatFAT From Israel, joined Feb 2006, 2405 posts, RR: 5
Reply 21, posted (7 years 10 months 6 days 5 hours ago) and read 13612 times:

Quoting Cpw (Reply 19):
I look forward to the day when the MD-80s are gone.

Dont wait to long because they were just sold to G4  Wink Big grin



Don't Tread On Me!
User currently offlineSllevin From United States of America, joined Jan 2002, 3376 posts, RR: 6
Reply 22, posted (7 years 10 months 6 days 5 hours ago) and read 13576 times:

Quoting Mariner (Reply 4):
Plus, they have about a billion dollars in cold, hard cash sitting in the bank.

The problem is that Wall Street knows this. Given that it is not a "huge" airline, the stock price is up there at $43, giving it a market cap not far shy of $2 billion.

From a takeover perspective it's only $1 billion, since if you borrow $2 billion to take over AS, you could then turn around and use the cash to pay off half the acquisition cost.

I've long advocated that AS get that cash tied up to some extent; it actually makes them a MORE attactive takeover target, not less.

Steve


User currently offlineAS739X From United States of America, joined Apr 2003, 6151 posts, RR: 24
Reply 23, posted (7 years 10 months 6 days 4 hours ago) and read 13478 times:

Ahhhh the weekly thread of us merging with someone! But this week there are 2.

Ladies and Gentleman. Not happening very soon!

QXatFAT, not all of them were sold yet!

ASLAX.



"Some pilots avoid storm cells and some play connect the dots!"
User currently offlineMariner From New Zealand, joined Nov 2001, 25292 posts, RR: 85
Reply 24, posted (7 years 10 months 6 days 4 hours ago) and read 13436 times:
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Quoting Sllevin (Reply 22):
if you borrow $2 billion to take over AS, you could then turn around and use the cash to pay off half the acquisition cost.

$2 billion is the market cap. It would cost a great deal more than that. You'd pay a premium to get the airline and then another premium for the billion in cash. So $3 billion to buy AS is a very conservative estimate.

And if the institutional investors - who effectively, if passively, control AS - had an inkling of that happening they would throw a sh*t fit like no tomorrow.

One reason why the institutions love AS is because it is a widows and orphans stock - their money is about as safe there as money can be.

The other widows and orphans airline stock is Southwest. Very few buy LUV stock to make quick money - the shares trade in a very narrow price range.

Quoting Sllevin (Reply 22):
it actually makes them a MORE attactive takeover target, not less.

I think that's what I said. But it also raises the price. Considerably.

mariner



aeternum nauta
25 Post contains images Cpw : I heard that Menzes was going to acquire Alaska, and in a rare move, F9Animal was going to be named President and CEO.
26 DesertAir : Thanks CPW for a different perspective. Which carrier do you think AS would be interesting in acquiring? With their partner Horizon they cover a signi
27 Domokun : OMG too many merger threads!
28 Chugach : Ah, finally, the Voice of Reason. Horizon is already owned by Alaska Air Group, which is the parent company to AS and QX. Ah, finally the other Voice
29 Post contains images Cpw : My conclusion was "none of the above." They've shown over the past few years that a carrier can grow and still make great strides toward consistant p
30 Mariner : I don;t understand this merger mania. The more airlines the better, I say. Why would anyone want any airline to disappear? ??? mariner
31 MEACEDAR : Is UA and AS a possiblity? You have hubs both on the west coast and on the east coast. WEST- SEA ALASKA LAX UNITED EAST- ORD UNITED IAD UNITED United
32 HAL : Or this; a merger between Alaska and Hawaiian. HA flies to many of Alaska's largest cities (LAX, SFO, PDX, SEA, LAS, PHX, ANC etc). There could be a l
33 MEACEDAR : Not bad...except that they wouldn't really gain anything on the east United States, which is extremely important....MCO, ORD, IAD, JFK, EWR, ATL, BOS
34 AirframeAS : Ok, I got to add something to this. This whole merger thing is driving me crazy...expecially when it comes to AS. I have no idea as to why you guys th
35 Alaska737 : HAHAHAHAHA, where is he anyway, i honestly think the only possibility, and this aint happining either, is AS and F9. the west would be domminated. no
36 QXatFAT : Sorry about that AS. I thought that they were all sold already. I guess its just a matter of time. Thanks for the correction though.
37 Post contains images EA CO AS : Since that's all WN has, does that automatically mean they must want to merge with AS, too? The officers of Alaska Air Group know that historically,
38 Post contains images AirframeAS : Look no further than the USAirways EAST employees. They are still very upset people. Anyone with a high school diploma should know this. Codesharing
39 Post contains images PAAClipper707 : Thank you for your help. I have the information I need for my project at the airline. For those of you who made comments regarding your weariness of t
40 EA CO AS : That's where, in the 3Q06 financials, you'll see a charge taken against earnings for the "purchase" of 5 MD-80s. These were planes that were being le
41 Sllevin : While there would clearly be a premium, I don't believe it would be that much. Not to mention that with 50% + 1 share, you control the airline and th
42 Mariner : Then we believe different things and clearly have different standards when it comes to business ethics. I would guess the instutional investors would
43 Sjot : Alaska should by Aloha ... similar fleets ... and the route systems would mesh quite well
44 Tango-Bravo : It can be predicted with certainty that Alaska Airlines/Horizon Air will be acquired by another airline... IF and when someone offers a price that is
45 Post contains images Jacobin777 : Actually that is the reason why they would be taken over...
46 AirframeAS : Negative. I disagree. So now you are going to say WN should be taken over in a hostile way too because they very profitable? Whatever it is that you
47 Stitch : AS' strength is they partner with just about everyone in OneWorld and SkyTeam. They funnel a great deal of West Coast traffic for AA and NW, plus a g
48 AirframeAS : I think you summed it up better than I could, Thanks man.
49 Jacobin777 : Er, I think you need to review as to why one of the reasons a company takes over another company. I will ask you this..would you rather buy a good co
50 AirframeAS : Thats not the point, man. We are discussing AS here. The AS officers and shareholders will NOT allow a merger, period. It will never happen. And no,
51 Mariner : They cannot stop someone making a hostile take-over bid. They may succeed in stopping them from achieving it, but that depends on how much is offered
52 Post contains images Jacobin777 : Thank you very much Mariner....
53 AirframeAS : Like I said, its not going to ever happen. Im not taking sides with anybody here, but it does seem that people on here is just jealous (which is prett
54 Post contains links Mariner : Jealous - of what? As previously stated, Alaska is a fine, successful airline. If someone wants to try and take it over, nothing can stop them. They
55 AirframeAS : Success. Oh god...do I HAVE to remind you?! Dude, I used to work there. I know the history.
56 Mariner : Why would I (for example) be jealous of the success - I don't even live in the US. I think you should re-read post #4, assuming you bothered to read
57 AirframeAS : Then why do you care? See no further than US (pre-merger), DL and NW..... I think Indoc. training served its purpose sir. It did cover the history qu
58 Mariner : Why do you ask? FYI - I am interested in aviation. I own shares in several US airlines, including - yes - Alaska. But, for the record, I care about t
59 Post contains images Jacobin777 : So does that mean anyone who doesn't live in Dubai shouldn't care or discuss EK? I don't live in the United Kingdom, should I not bother to discuss V
60 AirframeAS : You failed to mention the latter part. Who said they were my rules? I never said they were my rules. Arn't we supposed to be following A.net rules??
61 Alaska737 : yes AS has been through its share of mergers but none since the mid-late 1980's. it is an entirely different airline now, and a merger is not in the
62 Post contains images Mariner : Why should I need to? This is airliners.net, I assume that anyone here has an interest in aviation. So all those constant rumors that Alaska might bu
63 Post contains images Jacobin777 : Why bring this up then? Calling someone in their 50's-60's "dude" is a bit rude..don't you think? I'm not...
64 Alaska737 : well there are "rumors" and there are "A-net rumors". its like playing the dating game, well i think QF and BA would make a nice couple or how about
65 Post contains images AirframeAS : Finally, somebody makes sense!! Thank you, Alaska737!! Lets play this game: I think that NW and Airbus would make a great merger, just for the hell o
66 Mariner : There are also the Alaska Airlines pilots rumors. And AS rampers. And AS F/A's. You want to pass the word to them that AS/F9 isn't going to happen. T
67 Alaska737 : well i know several AS pilots and have never heard this, i have heard some different rumors but never a merger with F9. their fleets dont match at al
68 Post contains images Planemaker : how about WestJet and B6.
69 Mariner : We move in different circles. A number of AS pilots (and F/A's) have bought Frontier shares because of it. F9Animal s not alone - I would go crazy, t
70 AirframeAS : I think that is a fair statement.
71 Alaska737 : i think it is the only reasonable match for AS, however i agree with you, i dont like the idea of AS mergeing with anyone either. as i said before th
72 Mariner : Both are "interesting" - for different reasons. The statement in reference to Frontier is that I believe it to be "one of the more interesting" airli
73 Alaska737 : yeah got that, edited my post right as you posted i agree, as a hopeful future employee, i hope they take advantage of opportunites as well, however
74 Post contains images Mariner : Only in a very general sense. The problem with all these merger scenarios is that they tend to ignore the powerful personalities that run airlines, a
75 Sllevin : I've seen few situations (especially with established and non-speculative businesses) where merger/acquisitions bring premiums of 50%. Virtually all
76 Bobnwa : If the owners of AS (Shareholders) are offered the right price to sell their stock, the managers of AS will have no say in a merger. It will just hap
77 Mariner : As I said before, we have a different view of things. I think that in itself would be a considerable task, especially if any share swap were involved.
78 AirframeAS : That is pretty much the case on this thread.
79 Jacobin777 : ...but you still haven't given any arguments as to why AS can't be taken over....which you have stated won't happen..
80 Alaska737 : your right in saying AS cant, not, be taken over, however it is highly doubtful. AS is a very expensive airline to buy and how many airlines want rou
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