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Now Will WN Buy FL?  
User currently offlineIloveboeing From United States of America, joined Oct 2005, 798 posts, RR: 0
Posted (5 years 11 months 1 week 2 days ago) and read 6354 times:

I figured I'd start a new thread on this. Now that WN has said they will be moving into a major airport in Fall 2009, and many have been predicting ATL, couldn't they just buy FL now? By buying FL, they would gain 73Gs and they could probably swap the 717s with Boeing for more 73Gs.

If they bought FL, they would have access to many gates in ATL and then they could go head-to-head with DL.

FL's market cap is approximately $469 million and the share price is $4 even.

http://finance.yahoo.com/q?s=AAI

Maybe they could offer FL shareholders a 25% premium (around $5/share)? Would they go for that? Could this work?

Thoughts?

55 replies: All unread, showing first 25:
 
User currently offlineBreaker1011 From United States of America, joined Nov 2007, 938 posts, RR: 2
Reply 1, posted (5 years 11 months 1 week 2 days ago) and read 6321 times:

It's not out of the question. Buying FL means WN can no longer claim to be the non-hub carrier they tout today, cause with FL comes a GREAT hub at ATL that surely they'd make good use of. WN's been making many a philosophical corporate about face these days, that's for sure. If this were to happen, you'll see even bigger changes at WN that may ultimately change the face of the company as we know it today - maybe for the better, maybe for the worse.

One thing is for sure - while they are certainly a carrier with lower than average fares, they are no longer a carrier with lower than average costs. Thus - you are seeing some of these strategy changes.

Frankly, I'd rather see Southwest go it alone and maintain their heritage - but that might not be possible in the aviation world that's emerging right now. I actually believe, for the first time ever and this is my humble opinion - - Southwest Airlines is feeling a bit threatened.



Life's tough. It's even tougher if you're stupid. J. Wayne
User currently offlineSTT757 From United States of America, joined Mar 2000, 16890 posts, RR: 51
Reply 2, posted (5 years 11 months 1 week 2 days ago) and read 6311 times:



Quoting Iloveboeing (Thread starter):
they would gain 73Gs and they could probably swap the 717s with Boeing for more 73Gs.

As the previous poster mentioned it's not out of the question, neither would be WN keeping the 717s. I'm sure there are many current WN routes being flown by 737s that WN would love to move to a more economical aircraft like the 717, much of which would be intra Texas flying.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineQuickmover From United States of America, joined Mar 2004, 2494 posts, RR: 0
Reply 3, posted (5 years 11 months 1 week 2 days ago) and read 6297 times:

Absolutely right.

ATL will not support 2 hub carriers (FL and DL) and WN focus city. DL will survive because of their sheer size, international, etc. WN will prevail because they have never failed. FL will be the odd man out. FL has often given up on routes not profitable. How do you give up your hub?

As I said in the other thread, this is DEN all over again. DL, FL, WN instead of UA, F9, WN. I hope FL is smart enough to pursue a deal ahead of time. FL will be doomed if they come to ATL, just a matter of time.


User currently offlineCubsrule From United States of America, joined May 2004, 23194 posts, RR: 20
Reply 4, posted (5 years 11 months 1 week 2 days ago) and read 6267 times:



Quoting Quickmover (Reply 3):
FL will be doomed if they come to ATL, just a matter of time.

If there are no gates for WN, they cannot enter ATL.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineBreaker1011 From United States of America, joined Nov 2007, 938 posts, RR: 2
Reply 5, posted (5 years 11 months 1 week 1 day 23 hours ago) and read 6229 times:



Quoting Cubsrule (Reply 4):
If there are no gates for WN, they cannot enter ATL.

Exactly - that's why there's spec about buying FL - that's the only way to get any real gate real estate.

Quoting Quickmover (Reply 3):
As I said in the other thread, this is DEN all over again. DL, FL, WN instead of UA, F9, WN. I hope FL is smart enough to pursue a deal ahead of time. FL will be doomed if they come to ATL, just a matter of time.

The difference is, there were gates to be had at DEN, allowing WN to enter and go up against F9 live and in person, and win as the case appears to be playing out.

In ATL, no such opportunity. If FL doesn't want to be bought/merged, and successfully fends off a hostile WN bid (if one were made), WN has nowhere at ATL to park their first jet.



Life's tough. It's even tougher if you're stupid. J. Wayne
User currently offlineSANFan From United States of America, joined Aug 2006, 5542 posts, RR: 12
Reply 6, posted (5 years 11 months 1 week 1 day 23 hours ago) and read 6203 times:

I wouldn't rule out any possibility any more, by any airline, including WN. Everything is changing big time these days, including the always-consistant WN!

I think there's no doubt that WN has an eye on ATL and this would be one easy way to get in there quick -- gates included.

bb


User currently offlineQuickmover From United States of America, joined Mar 2004, 2494 posts, RR: 0
Reply 7, posted (5 years 11 months 1 week 1 day 23 hours ago) and read 6173 times:

Quoting Cubsrule (Reply 4):
If there are no gates for WN, they cannot enter ATL.

I live in DEN and I've seen how WN can work wonders with city government. When WN came to DEN, there were maybe at best 1 or 2 open city gates. F9 was begging for more gates. Through a little prodding, DIA convinced other carriers to consolidate or give up a gate here and there. A little over a year later, WN dominates the C concourse.

One or two gates, to grab a toe hold, and WN will do nothing but grow in a big market like ATL.

[Edited 2008-12-17 19:31:49]

User currently offlineCubsrule From United States of America, joined May 2004, 23194 posts, RR: 20
Reply 8, posted (5 years 11 months 1 week 1 day 23 hours ago) and read 6142 times:



Quoting Quickmover (Reply 7):
Through a little prodding, DIA convinced other carriers to consolidate or give up a gate here and there. A little over a year later, WN dominates the C concourse.

Who might consolidate or give up a gate at ATL?



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineBreaker1011 From United States of America, joined Nov 2007, 938 posts, RR: 2
Reply 9, posted (5 years 11 months 1 week 1 day 23 hours ago) and read 6110 times:

Quoting Quickmover (Reply 7):
One or two gates, to grab a toe hold, and WN will do nothing but grow in a big market like ATL

Could be right there Quickmover - but I things work a bit differently down South than they do out west.  

With FL hubbing at ATL and providing low fares to lots of places, there's just not much WN can offer the city/airport that it really doesn't have already - so the leverage is low for WN. ATL does not want an LCC "focus city" - they want an LCC "HUB" to counter balance lady Delta. FL gives them that. Atlanta likes it's sweet tea, it's Coca Cola, it's Peach Tree streets, and it's tidy balance of a huge legacy home office (DL) and a dedicated LCC hub carrier (FL) that actually seem to co-exist fairly well, just like DL and EA did. A Texan coming in an making demands? Molasses!

  

I truly think DEN worked out for WN the way it did only because F9 and UA both were already on shaky ground and the smell of blood tinged the air. They were busy eating each other alive. All you can smell in ATL are the peaches!

[Edited 2008-12-17 19:55:18]


Life's tough. It's even tougher if you're stupid. J. Wayne
User currently offlineSTT757 From United States of America, joined Mar 2000, 16890 posts, RR: 51
Reply 10, posted (5 years 11 months 1 week 1 day 23 hours ago) and read 6079 times:



Quoting Cubsrule (Reply 8):
Who might consolidate or give up a gate at ATL?

UA and CO, Fall '09 would be the right timing.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineQuickmover From United States of America, joined Mar 2004, 2494 posts, RR: 0
Reply 11, posted (5 years 11 months 1 week 1 day 23 hours ago) and read 6049 times:



Quoting Cubsrule (Reply 8):
Who might consolidate or give up a gate at ATL?

I'm not familiar with who has what gates in ATL, but I can tell you that where there's a will, there's a way with WN. They have a good enough reputation that the public will demand it and some politician will take up the fight like they did here. Our city turned their backs on F9s request for gates and they are headquartered and hubbed here not to mention United's political influence. Bringing Southwest to any politician's town is guaranteed election votes.

Both DL and US gave up gates here for WN. Other carriers, with very few flights, now share or they might use an international gate.


User currently offlineCubsrule From United States of America, joined May 2004, 23194 posts, RR: 20
Reply 12, posted (5 years 11 months 1 week 1 day 23 hours ago) and read 6012 times:



Quoting STT757 (Reply 10):
UA and CO, Fall '09 would be the right timing.

If they were in the same concourse, I'd be inclined to agree, but I don't believe that they can fit the combined operation in either carriers' gates

5x CLE
2x DEN
8x EWR
4x IAD
10x IAH
7x ORD

That makes 36 daily flights, for which they probably need 5 gates. CO has 4 gates (D 6, 8, 10, and 12), while UA has 3 (T 13 through 15). With the distance between them, it'll be tough to consolidate at all.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineAAflyguy From United States of America, joined Apr 2006, 362 posts, RR: 1
Reply 13, posted (5 years 11 months 1 week 1 day 22 hours ago) and read 5943 times:

Gate capacity @ ATL remains at an absolute premium. DL has T1-T8, all of A, all of B, half of C, and damn near half of D. The only available gates might be those on Conc D that NW's flights currently operate from (probably no more than 3-4 gates). As long as DL maintains whatever average level of operations is required to lease a gate, then I'm not sure there's any interest in relinquishing even a single one, especially if it is to open up the airport to more competition. Same goes for FL, which has grown @ ATL by adding dozens of flights operating from gates on Conc D. Those wanting WN service can drive west to BHM, though I'm not so sure why there would be many choosing to do that with FL operating more than 250 flights a day @ ATL to more than 50 cities. The situation @ DEN was far different from what is the current day ATL. Both UA & F9 were financially shaky, and still are. WN was easily able to convince the City/Airport to work on other carriers to reduce leased gates so it could grow its service. I'm not so sure that WN would do much damage @ ATL anyway, given the sheer size of DL there, and certainly FL has built a formidable operation of its own there. Nothing is impossible, but I'm just not seeing this one, unless it is through a merger w/FL.

User currently offlineDL767captain From United States of America, joined Mar 2007, 2539 posts, RR: 0
Reply 14, posted (5 years 11 months 1 week 1 day 22 hours ago) and read 5921 times:

Instead of seeing an actual merger, I could see WN moving in on FL cities until FL is crippled enough that WN can just buy them out and not mess with difficult merger details.

They would be a good match as FL would give WN a huge presence in ATL as well as many other cities


User currently offlineDurangoMac From United States of America, joined Dec 2006, 737 posts, RR: 0
Reply 15, posted (5 years 11 months 1 week 1 day 22 hours ago) and read 5890 times:



Quoting Breaker1011 (Reply 9):
All you can smell in ATL are the peaches!

I wouldn't say the smell of peaches but defiantly not blood. Big grin  box   duck 


User currently offlineEmSeeEye From United States of America, joined Jun 2006, 508 posts, RR: 0
Reply 16, posted (5 years 11 months 1 week 1 day 22 hours ago) and read 5851 times:

Ok, I think any talk of any kind of airline merger should just be shelved right about now. No matter who or what airline or what any kind of shape they are in are going to find it very tough if not impossible to get any kind of financing on the deal. No matter how sweet the deal may be I dont know of any banks or financial institutions (or private investors) that are willing to take any kind of a risk right now.

User currently offlineQuickmover From United States of America, joined Mar 2004, 2494 posts, RR: 0
Reply 17, posted (5 years 11 months 1 week 1 day 22 hours ago) and read 5821 times:

A WN stock deal would be easy. Say 1 share of WN for every 1.5 or 2 AAI shares. Maybe part cash part stock. The only hurdle to cross would be getting Boeing to start taking back the 717 early in exchange for more 73Gs. I also doubt WN would keep all of FL's destinations (wichita, Bloomington, Branson, Flint, HPN, etc. WN would not need all of those 717s.

User currently offlineQANTAS747-438 From United States of America, joined Jan 2001, 1981 posts, RR: 2
Reply 18, posted (5 years 11 months 1 week 1 day 20 hours ago) and read 5699 times:



Quoting Quickmover (Reply 17):
I also doubt WN would keep all of FL's destinations (wichita, Bloomington, Branson, Flint, HPN, etc. WN would not need all of those 717s.

Yeah, WN will not buy or merge with FL. How would it look if WN buys FL then puts thousands out of a job by pulling out of those cities? If it happened, gone would be RIC, ICT, DAY, Harrisburg, Rochester, Biloxi, Bloomington, Flint, Akron, etc, etc, etc..... and ESPECIALLY..... Branson, MO. GONE!



I sure would love to see a WN 717! Maybe just keep one at HDQ on the front lawn??????



My posts/replies are strictly my opinion and not that of any company, organization, or Southwest Airlines.
User currently offlineVulindlela744 From United States of America, joined Jan 2000, 525 posts, RR: 0
Reply 19, posted (5 years 11 months 1 week 1 day 17 hours ago) and read 5595 times:

In the Q3 conference call Bob Fornaro stated that he would be willing to talk to Southwest about a full blown code share. That would put SWA in Atl without actually having to fly there. Stay tuned.

User currently offlineEMB170 From United States of America, joined Nov 2007, 649 posts, RR: 0
Reply 20, posted (5 years 11 months 1 week 1 day 14 hours ago) and read 5488 times:

I've always wondered if WN buying FL would give WN what they've been chasing for a while now...business travelers.

FL routinely operates into (slot-controlled) airports that J class passengers prefer (DCA, BOS, LGA) that WN doesn't currently serve (though that will change with the introduction of LGA)

FL offers a premium product (dedicated J cabin), and seat assignments with higher fare-class purchases

WN might have to operate FL as a separate company, but it's an interesting idea to ponder...



Can passenger jets fly as fast as my feet do? Let's find out...
User currently offlineGSPSPOT From United States of America, joined Sep 2003, 3090 posts, RR: 2
Reply 21, posted (5 years 11 months 1 week 1 day 12 hours ago) and read 5354 times:



Quoting Quickmover (Reply 11):
They have a good enough reputation that the public will demand it and some politician will take up the fight like they did here.

Possibly, but what would the city or airport gain? What would WN bring that they don't already have? I really, REALLY like FL's business model. A LCC WITH a front cabin! It would be a really sad day if FL went away, and I think ATL, the city, and everyone else should fight such a thing.



Finally made it to an airline mecca!
User currently offlineEMB170 From United States of America, joined Nov 2007, 649 posts, RR: 0
Reply 22, posted (5 years 11 months 1 week 1 day 12 hours ago) and read 5301 times:



Quoting Cubsrule (Reply 12):
If they were in the same concourse, I'd be inclined to agree, but I don't believe that they can fit the combined operation in either carriers' gates

5x CLE
2x DEN
8x EWR
4x IAD
10x IAH
7x ORD

That makes 36 daily flights, for which they probably need 5 gates. CO has 4 gates (D 6, 8, 10, and 12), while UA has 3 (T 13 through 15). With the distance between them, it'll be tough to consolidate at all.

Only way that that would happen would be two scenarios:

Scenario One: UA Moves to D

DL/NW cede gate D13 to UA/CO
UA/CO keep gates D6, D8, D10, D12
AA gets T13, T14, T15; keeps T12
DL/NW get T9, T10, T11


Scenario Two: CO Moves to T

AA cedes T11 and T12 to CO/UA; T9 and T10 to DL
AA gets CO's current gates (D6, D8, D10, D12) in exchange



Can passenger jets fly as fast as my feet do? Let's find out...
User currently offlineQuickmover From United States of America, joined Mar 2004, 2494 posts, RR: 0
Reply 23, posted (5 years 11 months 1 week 1 day 11 hours ago) and read 5210 times:



Quoting GSPSPOT (Reply 21):
Possibly, but what would the city or airport gain? What would WN bring that they don't already have? I really, REALLY like FL's business model. A LCC WITH a front cabin! It would be a really sad day if FL went away, and I think ATL, the city, and everyone else should fight such a thing.

You're right and I like FL too, but we thought the same thing about Frontier here in DEN. Everyone loved the hometown airline, the animal commercials, the new jets, and direct tv, but when WN came to town, people flocked to them. The mayor suddenly found or built gates for WN that F9 had been requesting for years. WN doesn't have all the bells and whistles, but they run a very good airline and the fares are cheap. I hope I'm wrong, but I doubt F9 survives.


User currently offlineKarlB737 From United States of America, joined Mar 2004, 3130 posts, RR: 10
Reply 24, posted (5 years 11 months 1 week 1 day 11 hours ago) and read 5133 times:

Buying AirTran outright -- absolutely not. We know they don't want another type of aircraft no matter what because of the increase in costs. Personally I think the only way this suggestion could occur is if it was handled in a similar fashion as Southwest dealt with ATA.

25 Bagpipes : I hope not, The WN employees dont deserve some of the FL employees attitudes, ATL gate agents come to mind, When i worked for FL, I have heard gate ag
26 DCA-ROCguy : A WN stock deal would be easy. Say 1 share of WN for every 1.5 or 2 AAI shares. Maybe part cash part stock. The only hurdle to cross would be getting
27 GSPSPOT : I'm always confounded when stuff like that happens. I mean, I can see that happening in a captive market, or one where there are currently no LCC's t
28 Quickmover : Remember Midway airlines in RDU? Same type of deal when WN arrived.
29 PHLBOS : If WN ever did come to ATL (WITHOUT either merging with or buying FL), I wonder if FL would drop its first checked-bag fee? Right off the bat and far
30 Post contains images Luckyone :   Priceless. Either that or GREAT BALLS OF FIRE, maybe followed by Fiddle-dee-dee??? The question is how many people are screaming for Southwest in
31 Acey559 : Hmmm, WN gets rid of the 717s and DL picks them up to replace the DC-9s. Sounds perfect to me.
32 GSPSPOT : But, I don't think that particular iteration of Midway was very entrenched, as FL is at ATL.
33 Quickmover : You might be surprised. Frontier was in great financial shape in 2004-2005 and firmly entrenched. They were not that much smaller than Airtran. Front
34 Axio : A more fundamental question. Does Southwest have to grow? People keep talking about how WN is changing - moving into bigger cities that they once avoi
35 Cubsrule : Of course, in either one of your scenarios, someone is relinquishing the best gates at the airport.
36 EMB170 : It's the only way to put CO and UA together that I can think of (going by your theory of needing 5 gates) unless they were to actually build out conc
37 PBIflyguy : OK, question.... why is the assumption of a "Major Airport" immediately ATL ? Couldnt DFW be defined the same? ( but we know it isnt DFW ) Maybe LGA?
38 ScottB : That's a bit of revisionist history. Before WN entered DEN, there were empty gates on the C Concourse. F9 wasn't begging for more gates; they simply
39 0NEWAIR0 : I guarantee you that FL and DL have first dibbs on any gate that becomes available.
40 Enilria : I could not agree more. The only reason to think otherwise is the DEN experience, but it would have been smarter/cheaper then to buy F9 and it would
41 Swatpamike : Hello All How many gates does NW have in Atlanta? Why couldn't WN get those gates? Cheers swatpamike
42 Cubsrule : DL will acquire them, just like all of NW's other assets. Provided DL meets the utilization requirements in the lease, there wouldn't be any basis fo
43 Quickmover : Two. The former TWA gate and one city gate. Everything else came from other carriers giving up gates.
44 Post contains images Mariner : Not anymore. mariner[Edited 2008-12-18 21:30:26]
45 Mariner : It was also 'fortuitous' for Southwest that when Frontier was negotiating for - and expecting to get - gates on C, the airport suddenly change their
46 DeltaL1011man : I must not get your math. IF WN go into Atlanta, big if, they would have to use the CUTE gates on D so they would a few flights (no more than 10) at
47 FlyASAGuy2005 : Come on, you know everywhere in Atlanta and Georgia it's spelled Peachtree Love it! LOL And has a larger cachement. Not to mention loyal FF base. But
48 STT757 : [/quote] They're not allowed to lease them to WN?..
49 FlyASAGuy2005 : 3 as far as I know, and they are right across from DCI ops (seperated by the spine). If anything, we'll probably see more use from these gates as ATL
50 USPIT10L : They have four gates. D13, D14, D15, and D16.
51 Enilria : Despite the comments about DEN, there were several occasions where WN simply added more flights from DEN 90 days out and forced the airport to find a
52 Cubsrule : With FL and DL undoubtedly agitating against it, what incentive would the airport have to find a solution?
53 EMB170 : We already know about LGA...and as has been said, WN was speaking about a new airport, so that rules LGA out. I suppose EWR must be considered, but t
54 GSPSPOT : Agreed. I mean, if ATL were hurting for "business", I could see them scrambling to get gates or whatever for WN. But, they're bursting at the seams a
55 FlyASAGuy2005 : The question is, will the corrupt city called Atlanta and equally corrupt Atlanta Aviation Administration cede them to WN, or any other carrier for t
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