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Mergers! The Definitive Thread  
User currently offlineManfredj From United States of America, joined Mar 2007, 1132 posts, RR: 0
Posted (6 years 10 months 4 weeks 1 day ago) and read 3224 times:

How many more times do I have to log on to Airliners and find yet ANOTHER thread about mergers? Another speculation about whom will merge with whom, another conjecture about what airline is most compatible with another, miscellaneous rants and raves about which ones will succeed and which ones will ultimately fall to the wayside.

I think it's time to make ONE thread about ALL mergers, news, speculation, and so on. I hope everyone feels free to post in here regularly, and I certainly will make an effort to keep it going.

First and foremost, I have voiced my opinion on Airliners (see Cannibalism Of The Skies), but I feel it necessary to state it fresh so everyone knows where I come from on the issue.

I DON"T THINK THEY WORK; at least not in the sense that it will solve our competition and profit making ventures. Airlines merging, in the end, produce the SAME amount of aircraft in the air, and the same routing system among the two airlines involved. In essence, you have only compounded the issue and created one LESS airline...in some cases the NEW airline loses its beloved and nostalgic name which it has carried for generations.(TWA for example)

I have said time and time again that the only way to make our market more competitive is for one of the majors to GO BANKRUPT. I know this sounds horrible, but it is necessary to relieve market congestion, takes planes out of the skies, and allow the others to pick up the lost profits of the fallen airline. For example, if USAir went bankrupt today, the prospect of a merger among others would probably fall by 50%. There would be hundreds less aircraft in the skies, and the demand in the markets USAir serviced would increase, hence money would be made.

I read an article in USA TODAY that ranks an airlines compatibility with another, and simplifies what we on here have made into a un-ending story.

http://www.usatoday.com/travel/colum...n/2006-12-17-airline-mergers_x.htm

Basically, it states that the list below is who should and should not merge with one another based on overlapping route and aircraft structures or who would be a threat to competitiveness.

American
Continental: No
Delta: No
Northwest: Yes
United: No
US Airways: Yes

Continental
American: No
Delta: No
Northwest: Yes
United: Yes
US Airways: No

Delta
American: No
Continental No
Northwest: Yes
United: Yes
US Airways: No

Northwest
American: Yes
Continental: Yes
Delta: Yes
United: No
US Airways: Yes

United
American: No
Continental: Yes
Delta: Yes
Northwest: No
US Airways: Yes

US Airways
American: Yes
Continental: No
Delta: No
Northwest: Yes
United: Yes

Although my opinions may be controversial, I think they have merit. This is a black and white issue, a deal or no deal situation, a survive or perish industry. When one realises this, only then can you begin to understand exactly how volatile this issue is.

I hope this thread will be a good starting point before attempting to post a speculative thread about "who will merge with who." There are too many variables to consider, and too many laws to ponder before the merger actually happens.


757: The last of the best
36 replies: All unread, showing first 25:
 
User currently offlineKYNG2KPBI From United States of America, joined Jan 2008, 41 posts, RR: 0
Reply 1, posted (6 years 10 months 4 weeks 14 hours ago) and read 3035 times:

I think it's time to make ONE thread about ALL mergers, news, speculation, and so on. I hope everyone feels free to post in here regularly, and I certainly will make an effort to keep it going.




Good Luck!


User currently offlineSPREE34 From United States of America, joined Jun 2004, 2266 posts, RR: 9
Reply 2, posted (6 years 10 months 4 weeks 14 hours ago) and read 2993 times:



Quoting Manfredj (Thread starter):
There are too many variables to consider

That may be why there are so many threads. Every time someone sees a new twist, a thread will start. I don't think that is a bad thing. I also think this thread will hit 200 post fairly quickly.



I don't understand everything I don't know about this.
User currently offlineMariner From New Zealand, joined Nov 2001, 25712 posts, RR: 85
Reply 3, posted (6 years 10 months 4 weeks 14 hours ago) and read 2978 times:
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Quoting Manfredj (Thread starter):
I think it's time to make ONE thread about ALL mergers, news, speculation, and so on.

I guess this is fine for those who want it, but I enjoy all the other speculative threads, they can be quite entertaining.

I hope they don't stop.

mariner



aeternum nauta
User currently offlineBreaker1011 From United States of America, joined Nov 2007, 938 posts, RR: 2
Reply 4, posted (6 years 10 months 4 weeks 14 hours ago) and read 2976 times:

I like all the individual speculation - more fun that way and more narrow on topic. Good try though, some will like this better, but you'll miss out on the entertainment if you don't watch some of the other virtual pits!

Cheers  Smile



Life's tough. It's even tougher if you're stupid. J. Wayne
User currently offlineBOStonsox From United States of America, joined exactly 7 years ago today! , 1995 posts, RR: 0
Reply 5, posted (6 years 10 months 4 weeks 13 hours ago) and read 2934 times:



Quoting Manfredj (Thread starter):
How many more times do I have to log on to Airliners and find yet ANOTHER thread about mergers?

Another common thread is everything regarding hubs and focus cities and the like. I think maybe DL/CO or DL/AA may work out, but it would be bad for some people. Let's throw in a few LCCs to your list as well.

AIRTRAN
American: No
Continental: Yes
Delta: Yes
Frontier: Yes
jetBlue: Yes
Midwest: Yes
Northwest: Yes
Southwest: Yes
Spirit: Yes
United: No
USAir: Yes

FRONTIER
AirTran: Yes
American: No
Continental: Yes
Delta: Yes
jetBlue: Yes
Midwest: Yes
Northwest: No
Southwest: Yes
Spirit: No
United: Yes
USAir: Yes

JETBLUE
AirTran: Yes
American: No
Continental: No
Delta: Yes
Frontier: Yes
Midwest: Yes
Northwest: Yes
Southwest: No
Spirit: Yes
United: Yes
USAir: No

MIDWEST
AirTran: Yes
American: No
Continental: Yes
Delta: No
Frontier: Yes
jetBlue: Yes
Northwest: Yes
Southwest: Yes
Spirit: No
United: No
USAir: Yes

SOUTHWEST
AirTran: Yes
American: No
Continental: No
Delta: No
Frontier: Yes
jetBlue: No
Midwest: Yes
Northwest: No
Spirit: Yes
United: No
USAir: Yes

SPIRIT
AirTran: No
American: Yes
Continental: Yes
Delta: Yes
Frontier: No
jetBlue: Yes
Midwest: No
Northwest: Yes
Southwest: Yes
United: No
USAir: Yes

Of course, this goes for vice-versa, so if you want to see if American and Spirit are compatible just look at where American is under Spirit (it says Yes). Let's all agree to disagree though and these are just my thoughts.



2013 World Series Champions!
User currently offlineManfredj From United States of America, joined Mar 2007, 1132 posts, RR: 0
Reply 6, posted (6 years 10 months 4 weeks ago) and read 2707 times:



Quoting BOStonsox (Reply 5):
Of course, this goes for vice-versa, so if you want to see if American and Spirit are compatible just look at where American is under Spirit (it says Yes). Let's all agree to disagree though and these are just my thoughts.

Interesting point, the article does talk about SMALLER mergers. These may be easier to chew as the smaller airlines do not have the complex structer that larger ones have. Therefore, there is less risk of creating a monopoly in the market. In short, smaller airlines have a better chance of merging than larger ones do. This still begs the question...does this solve anything in the long run? One could speculate that merging two small airlnes like Alaskan and Frontier would only compound the issue.

Quoting SPREE34 (Reply 2):
That may be why there are so many threads. Every time someone sees a new twist, a thread will start. I don't think that is a bad thing. I also think this thread will hit 200 post fairly quickly.

Agreed, but wouldn't you like to understand exactly how mergers work before speculating on them?...otherwise, it's just wasted space.



757: The last of the best
User currently offlineSPREE34 From United States of America, joined Jun 2004, 2266 posts, RR: 9
Reply 7, posted (6 years 10 months 3 weeks 6 days 21 hours ago) and read 2586 times:



Quoting Manfredj (Reply 6):
wouldn't you like to understand exactly how mergers work before speculating on them?

I do. Perhaps you do as well. Some don't. Sometimes someone else says something nobody thought of. Some of them met here to make and pay off bets.

I think this may also be where some are learning something about how mergers work.



I don't understand everything I don't know about this.
User currently offlineMadameConcorde From San Marino, joined Feb 2007, 10938 posts, RR: 37
Reply 8, posted (6 years 10 months 3 weeks 6 days 20 hours ago) and read 2523 times:

It looks obvious that Tilton is trying all he can to sell off United any chance he will get. Only the pilot's and cabin crew's unions and share holders might not let him do it.

Quoting Manfredj (Thread starter):
United
American: No
Continental: Yes
Delta: Yes
Northwest: No
US Airways: Yes




There was a better way to fly it was called Concorde
User currently offlineEXAAUADL From , joined Dec 1969, posts, RR:
Reply 9, posted (6 years 10 months 3 weeks 6 days 20 hours ago) and read 2500 times:

you should make a little matrix

User currently offlineFlagshipAZ From United States of America, joined Jan 2001, 3419 posts, RR: 14
Reply 10, posted (6 years 10 months 3 weeks 6 days 20 hours ago) and read 2496 times:



Quoting Manfredj (Thread starter):
American
Continental: No
Delta: No
Northwest: Yes
United: No
US Airways: Yes

Strictly from a fleet compatibility viewpoint, there's no way that either NW or US could mesh
with American's fleet. Northwest has lots of PW engines & US has lots of Airbuses.
AA has the A300, which NW & US does not. And the only PW motors AA has, are on the
MD-80s, which NW & US do not fly anymore.
So from that list above, again only from a fleet standpoint...AA can work with mostly Continental,
and to a lesser degree, Delta. Northwest & United could work well together as well, fleet-wise.
One of the ideas of merging, is keeping costs down...and the 2 biggest overheads are fuel & labor.
Now we have more different types of aircraft, with more different types of engines, equals into more
specialized techs (labor) on those unique engines and different aircraft models. And not to mention
having more aircraft in the fleet than you really need.
Again this is strictly from my fleet compatibility point of view. Regards.



"Beer is living proof that God loves us and wants us to be happy." --Ben Franklin
User currently offlineManfredj From United States of America, joined Mar 2007, 1132 posts, RR: 0
Reply 11, posted (6 years 10 months 3 weeks 6 days 20 hours ago) and read 2496 times:

And folks, I'm happy to say that even the economists are happy to join the bandwagon on my conclusions! Please don't lump the media's beliefs on airline mergers with their not so knowledgable articles on travel, comfort, or accidents. They may not know what they are talking about when it comes to on time records and accident reports, but the ecnomomists speculating on mergers are true and tries industry experts.

http://news.enquirer.com/apps/pbcs.d...0316/1076/BIZ&loc=interstitialskip



757: The last of the best
User currently offlineMKE22 From United States of America, joined Nov 2007, 1149 posts, RR: 2
Reply 12, posted (6 years 10 months 3 weeks 6 days 20 hours ago) and read 2461 times:



Quoting BOStonsox (Reply 5):
MIDWEST
AirTran: Yes
American: No
Continental: Yes
Delta: No
Frontier: Yes
jetBlue: Yes
Northwest: Yes
Southwest: Yes
Spirit: No
United: No
USAir: Yes

Again interesting how you included the smaller airlines into this, I like it  Smile . I think that a bad idea for YX would be US though. US would tear YX apart! Why would they want a hub in MKE? I think a good match would be F9 or FL (although they probably won't make another run obviously). F9 may pose a problem with fleet, but adding DEN with MKE and MCI would give F9 the expansion they need besides having DEN.
Just my  twocents 



If Your not pissed, your not trying
User currently offlineMariner From New Zealand, joined Nov 2001, 25712 posts, RR: 85
Reply 13, posted (6 years 10 months 3 weeks 6 days 20 hours ago) and read 2451 times:
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Quoting MKE22 (Reply 12):
would give F9 the expansion they need besides having DEN.

There would be some argument - from me - that they need that expansion.  Smile

mariner



aeternum nauta
User currently offlineMKE22 From United States of America, joined Nov 2007, 1149 posts, RR: 2
Reply 14, posted (6 years 10 months 3 weeks 6 days 20 hours ago) and read 2420 times:



Quoting Mariner (Reply 13):
There would be some argument - from me - that they need that expansion. Smile

mariner

They do rely too much on DEN. UA and WN (more likely) may run F9 into the ground. UA will survive in DEN most likely with or without WN there. F9 isn't as big of a factor in DEN nowadays though, and if WN continues to expand, which indications are they will, you get the picture. DEN doesn't need 3 airlines. Thats why I think F9 needs to find another hub in case the worst should happen in DEN.



If Your not pissed, your not trying
User currently offlineMariner From New Zealand, joined Nov 2001, 25712 posts, RR: 85
Reply 15, posted (6 years 10 months 3 weeks 6 days 19 hours ago) and read 2383 times:
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Quoting MKE22 (Reply 14):
They do rely too much on DEN. UA and WN (more likely) may run F9 into the ground.

I guess you didn't see last night's traffic report. A system load factor 8 points higher than Southwest, a yield improvement and a double digit RASM improvement. Very few airlines if any, had a double digit RASM improvement last month.

The changes already made by Mr. Menke are starting to bite, and he he hasn't done it by cutting much DEN flying - but by cutting a lot of non-DEN flying. It is United that is reducing capacity at DEN - not Frontier.

DEN is Frontier's core - the heart and soul of the airline. It may take Mr. Menke a couple of quarters to achieve his goal, consistent profitability, but that is partly because Frontier made some mistakes in expanding beyond DEN.

Once DEN is sorted out then, as Mr, Menke says, they can look to "other opportunities", but what Frontier "needs" right now is an acceptance by others that their fundamental core is DEN.

mariner

[Edited 2008-02-06 12:30:50]


aeternum nauta
User currently offlineMKE22 From United States of America, joined Nov 2007, 1149 posts, RR: 2
Reply 16, posted (6 years 10 months 3 weeks 6 days 19 hours ago) and read 2370 times:



Quoting Mariner (Reply 15):
It is United that is reducing capacity at DEN - not Frontier.

Hmm... So maybe UA is the odd man out. I still think after F9 gets things sorted out, it might not be a bad idea to expand out of DEN a bit.



If Your not pissed, your not trying
User currently offlineFlyASAGuy2005 From United States of America, joined Sep 2007, 7004 posts, RR: 7
Reply 17, posted (6 years 10 months 3 weeks 6 days 19 hours ago) and read 2352 times:



Quoting MKE22 (Reply 14):
They do rely too much on DEN. UA and WN (more likely) may run F9 into the ground. UA will survive in DEN most likely with or without WN there. F9 isn't as big of a factor in DEN nowadays though, and if WN continues to expand, which indications are they will, you get the picture. DEN doesn't need 3 airlines. Thats why I think F9 needs to find another hub in case the worst should happen in DEN.

Just a question. you (or anyone) mind listing a few routes that WN competes directly with F9 on?



What gets measured gets done.
User currently offlineMKE22 From United States of America, joined Nov 2007, 1149 posts, RR: 2
Reply 18, posted (6 years 10 months 3 weeks 6 days 19 hours ago) and read 2330 times:



Quoting FlyASAGuy2005 (Reply 17):
Just a question. you (or anyone) mind listing a few routes that WN competes directly with F9 on?

DEN-SLC
DEN-SEA
DEN-SJC
DEN-SAN
DEN-LAX
DEN-LAS
DEN-AUS
DEN-SAT
DEN-MCI
DEN-STL
DEN-MDW
DEN-BNA
DEN-OKC
DEN-PHX
DEN-PHL
DEN-TPA
DEN-MCO



If Your not pissed, your not trying
User currently offlineMariner From New Zealand, joined Nov 2001, 25712 posts, RR: 85
Reply 19, posted (6 years 10 months 3 weeks 6 days 19 hours ago) and read 2323 times:
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Quoting MKE22 (Reply 16):
I still think after F9 gets things sorted out, it might not be a bad idea to expand out of DEN a bit.

"After"? Yes.

The great problem facing Frontier is the Conventional Wisdom that against United and now Southwest, Frontier must lose.

How do you fight a legend?

But since Southwest came to DEN, Frontier's market share has gone up. It was about 20%. It is now just under 25%.

Once DEN is returned to consistent profitability, then yes, Frontier can look around.

mariner



aeternum nauta
User currently offlineMKE22 From United States of America, joined Nov 2007, 1149 posts, RR: 2
Reply 20, posted (6 years 10 months 3 weeks 6 days 19 hours ago) and read 2307 times:



Quoting Mariner (Reply 19):
How do you fight a legend?

I'm not sure that many people have an answer to that question. F9 certainly is right now though. And by what you have said, they aren't doing too bad. Will it continue? Not sure, but thats why F9 should eventually "look around".



If Your not pissed, your not trying
User currently offlineTCT From United States of America, joined Jan 2008, 205 posts, RR: 0
Reply 21, posted (6 years 10 months 3 weeks 6 days 19 hours ago) and read 2275 times:

Since this thread is about all mergers I think Jetblue would make a great match with Spirit, They'll have both north and south America in a bag with Spirit's hub in FLL to the Caribbean, central and south America, and with JetBlue's great north American service as well as to the Caribbean. When it comes to fleet it's also a great combination with Jetblue needing some 319's. There both known for there ultra low fares, and great product(well mostly Jetblue.) If this was gonna happen Jetblue would most likely keep their name, and their product will be the one that is most likely kept, being that many people are not a fan of paying for inflight beverage's and snacks, as well as paying for their checked bags from what I have heard. Any thoughts on this?

User currently offlineMariner From New Zealand, joined Nov 2001, 25712 posts, RR: 85
Reply 22, posted (6 years 10 months 3 weeks 6 days 19 hours ago) and read 2275 times:
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Quoting MKE22 (Reply 20):
Will it continue? Not sure, but thats why F9 should eventually "look around".

I feel like I'm flogging a dead horse.  Smile

Try this - Frontier's slogan used to be "The Spirit of the West". Without that - without DEN - there isn't a whole lot of point. It is Mr. Menke's intention that when they do "look around" it will be their choice, not something they are forced, by others, to do.

But - he has already said that he stands ready to take advantage of any opportunity that presents itself, by way of gates (somewhere else) or aircraft, if airline mergers happen.

So to try and drag this thread back on-topic, if Delta did merge with United, that changes the landscape. SLC might get down-graded in favor of DEN, which could be a small opportunity for Frontier. SLC is "the west".

If Delta merges with Northwest, then (I guess) SLC and DEN would - probably - stay as they are and "other opportunities" arise. MEM might get downgraded - but I doubt Frontier would want to go back there.

But if United merges with Continental - say - that changes everything again. They might try and make DEN what it used to be - UA's most profitable hub - but isn't anymore. In which case, Southwest - in self-defense - might decide to try and buy Frontier.

In which case, a few other airlines might go ballistic, see DEN as a great opportunity for themselves and make a better offer.

Who knows? It is all too fluid.

mariner



aeternum nauta
User currently offlineMKE22 From United States of America, joined Nov 2007, 1149 posts, RR: 2
Reply 23, posted (6 years 10 months 3 weeks 6 days 18 hours ago) and read 2242 times:



Quoting Mariner (Reply 22):
Try this - Frontier's slogan used to be "The Spirit of the West". Without that - without DEN

Wasn't saying without DEN. I think DEN and F9 in it will survive. I just think they should look at expansion eventually.

Quoting Mariner (Reply 22):
SLC might get down-graded in favor of DEN, which could be a small opportunity for Frontier. SLC is "the west".

Indeed, and SLC is also an attractive option for other airlines as well (WN o boy  boggled  B6? FL? ). It would make sense for F9 if it went down.

Quoting Mariner (Reply 22):
WN might decide to try and buy Frontier.
Who knows? It is all too fluid.

That would be interesting, but you are right about everything being too fluid right now. F9 could be a merger partner in the future for someone.



If Your not pissed, your not trying
User currently offlineCALPSAFltSkeds From United States of America, joined Dec 2006, 2731 posts, RR: 9
Reply 24, posted (6 years 10 months 3 weeks 6 days 18 hours ago) and read 2224 times:

Based on the original thread starter's logic, the only way the six legacies can merge into three mega carriers is if AA merges with US, leaving CO and DL mergers with either NW or UA.

While US merging with NW makes some sense with Airbus equipment, it would leave AA without a partner (assuming all six would consolidate and AA wouldn't fit with CO, DL or UA). It would also pit DL vs. CO on the UA merger.


25 MKE22 : I say this is how this should look. NW: No CO: Maybe DL: No UA: No US: No F9: No B6: No NK: Maybe? FL: No WN: No The reason I say NK maybe, is if AA
26 Manfredj : I think this is a great question, as the answer is an old fashioned one. Good service, a shrewd maketing plan, and a CEO who puts his employees befor
27 BOStonsox : I sort of figured since they have the East Coast hubs in PHL and CLT with the west coast hubs in PHX and LAS, MKE would fill the area in between. If
28 TCT : Yeaaaaa, that would be awesome, I still think B6 would keep their name in that type of merger, but if that happened it would be unbelievable.
29 Post contains links Manfredj : Good morning everyone, more news on the DL NW merger. http://www.ajc.com/business/content/...stories/2008/02/06/delta_0207.html More of the same, and
30 Bobnwa : We must be reading between different lines, if that is the conclusion you come to. The investors are going to decide everything , not the CEO's, and
31 Manfredj : "The companies appear to have worked past a snag hit last month: how Delta Chief Executive Richard Anderson and Minneapolis-based Northwest's CEO, Do
32 MKE22 : Well not too bad of an idea based on hubs, maybe, but the fleet remains a problem. YX is all Boeing plus the gas sucking MD-80s. If they got more pla
33 MKE22 : They have 2 secondary hubs at JFK and LGA.
34 BOStonsox : Yeah, but that's New York. There is a lot more O&D for New York than anywhere else. I know there is a lot of leisure travel and O&D in the MIA/FLL/PB
35 MKE22 : What about CO then? Similar fleets is one thing they have in common.
36 BOStonsox : CO and NK, or CO and AA? I doubt CO and AA would happen as there are conflicts with DFW/IAH, CLE/ORD, and EWR/JFK/LGA. CO and NK however, makes sense
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