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Southwest CEO: Looking To Buy Another Airline  
User currently offlineJawake From United States of America, joined Sep 2007, 284 posts, RR: 0
Posted (5 years 1 month 2 days ago) and read 12635 times:

I guess since they lost their bid for F9, the CEO suggested recently that they are still on the hunt for an acquisition.

http://www.reuters.com/article/innovationNews/idUSTRE57J0LE20090820

Any ideas? I would think Airtran, Spirit, Sun Country, Alaska, would be potential targets.

[Edited 2009-08-20 04:34:31]

64 replies: All unread, showing first 25:
 
User currently offlineNetjetsINTL From United States of America, joined Jul 2009, 593 posts, RR: 0
Reply 1, posted (5 years 1 month 2 days ago) and read 12599 times:

I read the article on the wall street journal (WSJ.com)..... basically the reason why Frontier looked so appelling to Southwest was its Denver hub, and its several routes to Mexico and San Jose, Costa Rica...

the CEO said " those routes were not worth risking management-employee relations"....

Something tells me SWA its finally set to make an international push with its own metal


User currently offlineDesertAir From Mexico, joined Jan 2006, 1462 posts, RR: 0
Reply 2, posted (5 years 1 month 2 days ago) and read 12520 times:

In many ways, I hope WN does not go the route of acquiring another airline but spend their time and effort into expanding according to their style. I recall when PSA expanded into Los Cabos; this greatly enhanced their frequent flyer program. I benefited from a trip to Los Cabos on PSA. This could work for WN. They could Las Vegas or Los Angeles as the base for their Mexican operation.

User currently offlineLHCVG From United States of America, joined May 2009, 1577 posts, RR: 2
Reply 3, posted (5 years 1 month 1 day 23 hours ago) and read 12411 times:

Given WN's model of sticking (strictly) to one a/c type and a couple sub-types of the 737, doesn't it make the most sense for them to acquire someone else? I'm thinking along the lines of what I assume they had in mind with F9-- that at least in the short term you take advantage of the separate ops and a/c types to expand your corporate network and then down the line gradually homogenize the branding. For instance, buy someone with int'l routes and get a foothold in Mexico/Latin America/Caribbean/maybe Canada and then fold them in to the "greater SWA" company.

User currently offlineEBJ1248650 From United States of America, joined Jun 2005, 1932 posts, RR: 1
Reply 4, posted (5 years 1 month 1 day 23 hours ago) and read 12331 times:



Quoting DesertAir (Reply 2):
In many ways, I hope WN does not go the route of acquiring another airline but spend their time and effort into expanding according to their style. I recall when PSA expanded into Los Cabos; this greatly enhanced their frequent flyer program. I benefited from a trip to Los Cabos on PSA. This could work for WN. They could Las Vegas or Los Angeles as the base for their Mexican operation.

I agree. With so many airlines suffering financially and gates opening where they once did business, I'd think Southwest would do well to expand its own business rather than absorbing another one. Personally, I think Southwest buying another airline might mean the end of Southwest.



Dare to dream; dream big!
User currently offlineSunking737 From United States of America, joined Feb 2005, 2045 posts, RR: 8
Reply 5, posted (5 years 1 month 1 day 23 hours ago) and read 12263 times:

I would rule out SY too small of an airline would be of no benefit to help WN grow like F9 would have.


Just an MSPAVGEEK
User currently offlineJoeljack From United States of America, joined Feb 2005, 937 posts, RR: 0
Reply 6, posted (5 years 1 month 1 day 23 hours ago) and read 12200 times:

Airtran would provide a lot of advantages for them.

-major ATL operations (biggest city in US they don't serve) CLT is second I believe
-increase presence in Southeast
-major increase in pricing power because Airtran is cheaper much of the time.
-partially the same fleet...Would keep all of Airtran's 737-700's and dump the 717's.


User currently offlineNetjetsINTL From United States of America, joined Jul 2009, 593 posts, RR: 0
Reply 7, posted (5 years 1 month 1 day 23 hours ago) and read 12163 times:



Quoting Joeljack (Reply 6):
Airtran would provide a lot of advantages for them.

-major ATL operations (biggest city in US they don't serve) CLT is second I believe
-increase presence in Southeast
-major increase in pricing power because Airtran is cheaper much of the time.
-partially the same fleet...Would keep all of Airtran's 737-700's and dump the 717's.

Well everybody says Airtran is good for them..... the problem is Airtran is doing well and not for sale


User currently offlineSWABrian From United States of America, joined Nov 2007, 299 posts, RR: 2
Reply 8, posted (5 years 1 month 1 day 23 hours ago) and read 12095 times:



Quoting Jawake (Thread starter):
I guess since they lost their bid for F9, the CEO suggested recently that they are still on the hunt for an acquisition.

http://www.reuters.com/article/innovationNews/idUSTRE57J0LE20090820

Any ideas? I would think Airtran, Spirit, Sun Country, Alaska, would be potential targets.

Whoa, you are taking the article way out of context. You make it seem like an acquisition is likely and that WN is actively looking. First paragraph says "may" look for another carrier to buy and that the same restrictions would apply. He then told the paper he would likely limit any future attempt to an airline in bankruptcy restructuring, and that is all it says.

Out of that how do you get that WN would look at Alaska or AirTran?


User currently offlineJawake From United States of America, joined Sep 2007, 284 posts, RR: 0
Reply 9, posted (5 years 1 month 1 day 21 hours ago) and read 11837 times:



Quoting SWABrian (Reply 8):
Whoa, you are taking the article way out of context. You make it seem like an acquisition is likely and that WN is actively looking. First paragraph says "may" look for another carrier to buy and that the same restrictions would apply. He then told the paper he would likely limit any future attempt to an airline in bankruptcy restructuring, and that is all it says.

Out of that how do you get that WN would look at Alaska or AirTran?

Total speculation on Alaska and Airtran, as well as the other carriers mentioned. I have heard nothing mentioned about a specific airline. I just looked at airlines that might be of interest.

As far as how I make it sound like an acquisition is likely, reread the title of the article.

"Southwest CEO says still eyeing acquisitions: report"

That maybe the interpretation of the reporter, but it was what caught my eye and why I wonder what other folks thought.


User currently offlineJoeljack From United States of America, joined Feb 2005, 937 posts, RR: 0
Reply 10, posted (5 years 1 month 1 day 21 hours ago) and read 11743 times:



Quoting NetjetsINTL (Reply 7):
Well everybody says Airtran is good for them..... the problem is Airtran is doing well and not for sale

If you were familiar with the stock market, any publicly traded company can be purchased at anytime (with restrictions of course but I don't have enough days to write about that)

If they want to buy them, just make an offer and the board has to act in the best interest of the stock holders and voila...it's sold.

Look at the Airtran's bid for Midwest. If a competitor wouldn't have made an offer, Midwest would be Airtran right now.


User currently offlineSWABrian From United States of America, joined Nov 2007, 299 posts, RR: 2
Reply 11, posted (5 years 1 month 1 day 21 hours ago) and read 11668 times:



Quoting Jawake (Thread starter):
Southwest CEO says still eyeing acquisitions: report"

That maybe the interpretation of the reporter, but it was what caught my eye and why I wonder what other folks thought.

Well that's the problem with a lot of reporting, they take a sensational sounding headline even if it is totally out of context


User currently offlineDLPMMM From United States of America, joined Apr 2005, 3592 posts, RR: 10
Reply 12, posted (5 years 1 month 1 day 21 hours ago) and read 11618 times:



Quoting SWABrian (Reply 8):
Whoa, you are taking the article way out of context. You make it seem like an acquisition is likely and that WN is actively looking. First paragraph says "may" look for another carrier to buy and that the same restrictions would apply. He then told the paper he would likely limit any future attempt to an airline in bankruptcy restructuring, and that is all it says.

Out of that how do you get that WN would look at Alaska or AirTran?

I'm glad somebody actually takes time to read the article before speculating wildly.

No Airtran, No Alaska....

In fact, I can't think of another carrier that is the right size for a takeover that will likely be in Chapter 11 in the near future. Sounds to me like WN is a day late and a dollar short.

Frontier and Midwest are already gone.

Do any of the airlines in Hawaii fit the bill? Spirit, Airtran, Allegient, and Alaska are all profitable. How is Jet Blue doing? I don't think B6 is likely for Chapter 11 in the near future.

Quoting Jawake (Reply 9):
"Southwest CEO says still eyeing acquisitions: report"

But later says "out of Chapter 11".


User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5438 posts, RR: 7
Reply 13, posted (5 years 1 month 1 day 21 hours ago) and read 11584 times:



Quoting Joeljack (Reply 10):
just make an offer and the board has to act in the best interest of the stock holders and voila...it's sold.

That's the theory anyway. The trouble is boards often take into account the "long term interests" of the stockholders as grounds to reject takeover proposals offering immediate gains. Sometimes they get sued over these choices, and sometimes they lose those suits; but, when it comes to survival, entrenched boards have many options.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineJawake From United States of America, joined Sep 2007, 284 posts, RR: 0
Reply 14, posted (5 years 1 month 1 day 21 hours ago) and read 11584 times:



Quoting SWABrian (Reply 11):
Well that's the problem with a lot of reporting, they take a sensational sounding headline even if it is totally out of context

I would totally agree.

Personally, I just do not see Southwest going this route of buying another airline. Too risky and nothing out there at the moment seems like it would benefit Southwest.

Airtran seems like an interesting prospect, but the 2 airlines are so different. Not sure that would work.


User currently offlineEA CO AS From United States of America, joined Nov 2001, 13602 posts, RR: 61
Reply 15, posted (5 years 1 month 1 day 20 hours ago) and read 11283 times:
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Quoting Jawake (Thread starter):
I would think Airtran, Spirit, Sun Country, Alaska, would be potential targets.

Why? Cite specific reasons supporting each you've listed.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3409 posts, RR: 4
Reply 16, posted (5 years 1 month 1 day 20 hours ago) and read 11280 times:

They may want another "airline" so that they can run international separate from domestic. Easier to keep the unique requirements for one type of flying from being affected by the other.

User currently offlineTravelExec From Spain, joined Dec 2007, 449 posts, RR: 0
Reply 17, posted (5 years 1 month 1 day 19 hours ago) and read 11182 times:

How about Allegiant?

Quoting Joeljack (Reply 10):
If they want to buy them, just make an offer and the board has to act in the best interest of the stock holders and voila...it's sold.

That is how it should work... that said, it didnt work that way when Ryanair bid € 2.80 less than two years ago when the shares were around €2.40 and everybody knew they were on a downward trend... Aerlingus management has done an amazing job in leading the shareprice down to € 0.51. Management pride/hubris and superiority complex wrt Ryanair led them to spurn what was an astonishingly good offer.
In the US, I would expect to see the Board of that company under threat of all sorts of legal problems... unfortunately, in Ireland, this is really unlikely...


User currently offlineJakeOrion From United States of America, joined Oct 2005, 1253 posts, RR: 2
Reply 18, posted (5 years 1 month 1 day 19 hours ago) and read 10995 times:



Quoting XT6Wagon (Reply 16):
They may want another "airline" so that they can run international separate from domestic. Easier to keep the unique requirements for one type of flying from being affected by the other.

Well, what type of international are we talking about? Staying in North America or actually flying over the pond?

If its staying in North America wouldn't it just be easier to use their own metal?



Every problem has a simple solution; finding the simple solution is the difficult problem.
User currently offlineJeffrey1970 From United States of America, joined Apr 2001, 1336 posts, RR: 12
Reply 19, posted (5 years 1 month 1 day 19 hours ago) and read 10929 times:

I think it would be kind of interesting if they bought US considering all the trouble they have given Usairways over the years. I doubt that would happen though.


God bless through Jesus, Jeff
User currently offlineAvconsultant From United States of America, joined Feb 2006, 1360 posts, RR: 3
Reply 20, posted (5 years 1 month 1 day 19 hours ago) and read 10870 times:



Quoting NetjetsINTL (Reply 7):
the problem is Airtran is doing well and not for sale

All companies are For Sale.

Quoting DLPMMM (Reply 12):
How is Jet Blue doing? I don't think B6 is likely for Chapter 11 in the near future.

No idea on their performance; although, I was surprised they did not make a move for F9. I remember LH pumping $300M into B6 in 2007. Has LH increased their stake?

Quoting TravelExec (Reply 17):
How about Allegiant?

G3 has a $769M Market Cap once you combine the business plan to replace the G3 fleet. More than likely, it would not be feasible.


User currently offlineRampart From United States of America, joined Aug 2005, 3138 posts, RR: 6
Reply 21, posted (5 years 1 month 1 day 19 hours ago) and read 10844 times:



Quoting EA CO AS (Reply 15):
Why? Cite specific reasons supporting each you've listed.

What is this, a college term paper? It's just doing what A.net does best, ruminate and speculate.

-Rampart


User currently offlinePar13del From Bahamas, joined Dec 2005, 7220 posts, RR: 8
Reply 22, posted (5 years 1 month 1 day 19 hours ago) and read 10781 times:

If WN really wants to buy an airline I would say they should buy something befitting their size and strength, that is buy up not down. WN is the lagest domestic carrier in the USA with a fleet of over 500 737 a/c if they want to buy something look at carriers like US, UA, CO and heaven forbid, a takeover / merger of AA, ok lost it mentally on the AA option, but the others are doable, WN would feed the domestic traffic and the other the international feed, in time they can change the name to WN, if they were really interested, could they have made a play for NW before DL?
Note that these are financial transactions, when you consider the size of F9 and its operations, it was up for bid at less than $200 mill, what does WN have in the bank and what are those other carriers really worth - financially -.


User currently offlineManfredj From United States of America, joined Mar 2007, 1132 posts, RR: 0
Reply 23, posted (5 years 1 month 1 day 18 hours ago) and read 10496 times:

Quoting DesertAir (Reply 2):
In many ways, I hope WN does not go the route of acquiring another airline but spend their time and effort into expanding according to their style.

Is that really what we want, more cheap airfares to flood the industry? I don't think wn business plan has been healthy for any other airline wanting to offer good 'ol fashioned service. Whenever wn arrives, other's are forced to cut costs (food, clean airplanes, etc) in order to compete. That's not good for the consumer, and certainly isn't what I want. Their "style" isn't mine, so I personally want nothing to do with them. That’s just me, I'm sure many of you disagree. Yes it may be profitable, but at the vast expense of others.

Quoting EBJ1248650 (Reply 4):
Personally, I think Southwest buying another airline might mean the end of Southwest.

This is what a good lean company does in financially rough times. They acquire others cheaply. When the market goes back up, they have a good investment on their hands. This is a smart move on wn part.

Unfortunately, the best airline for wn to acquire would be CO. They need to take over a larger airline that has broad business across the world. CO and wn are related in that they are well run and aren't apt to make sketchy business decisions. Additionally, they both run on Boeing aircraft.

They are vastly different in that CO has that "old fashioned" service with a smile. This is what a majority of old school customers want. wn is less liberal with their service and may appeal to the younger more money conscious crowd. Again, this is the last acquisition I would like to see, but makes the most sense if wn wanted to grow large in the healthiest manner possible.

[Edited 2009-08-20 10:37:49]


757: The last of the best
User currently offlineSPREE34 From United States of America, joined Jun 2004, 2248 posts, RR: 9
Reply 24, posted (5 years 1 month 1 day 18 hours ago) and read 10466 times:



Quoting Jeffrey1970 (Reply 19):
I think it would be kind of interesting if they bought US considering all the trouble they have given Usairways over the years. I doubt that would happen though.

The two employee groups could never be merged. SWA are Team Players interested in seeing their company, and themselves prosper. USA are all about getting everything they can for "Me", screw the company, screw the passenger, and screw those guys we merged with.

Kelly wouldn't even think it.



I don't understand everything I don't know about this.
25 FrmrCAPCADET : My suspicion is that WN wants slots in certain markets, particularly the East. One could do an analysis of what Frontier had in slots at restricted ai
26 Adent : Alaska has international operations, similair fleet and Horizon. If looking for a deal they could pick up a division of UA - say DEN. But those assets
27 USAirALB : I can see them merging just because it seems they both care about the customer. I have a feeling that if they did merge of bought one another, the WN
28 BooDog : I don't see WN going after anybody else in the near future. Even if they tried to buy AirTran, etc, they would run into the EXACT same problems that t
29 1337Delta764 : I wonder, if WN acquires FL, I wonder who will pick up FL's 717s. DL could acquire them on the cheap to replace the NW DC-9-30s.
30 EA CO AS : Just asking for reasons supporting such wild thoughts, that's all. It's no different than if I'd pointed out ALK's cash on hand and then said, "Who w
31 ScottB : What's good for the consumer is what they choose to purchase with their own money. Clearly the "good ol' fashioned service" provided on other airline
32 Post contains images Mariner :    Mr. Kelly says that. This is not a reporter's interpretation, Mr. Kelly is quoted directly. He gives three criteria. 1. Not too big. 2. In Chapt
33 2travel2know : Could it be a non-U.S. airline? Would Canadian Westjet be of any interest for Southwest?
34 Jawake : Thanks. That is exactly what was intended. To get the ball rolling and see what folks thought. It is a forum, I am interested in other's opinions. Th
35 Atomsareenough : Yeah, but SY has a tiny fleet, most of which are 738s, which is a type WN doesn't fly... Why would WN want a small subfleet like that? What would the
36 Mariner : I dunno. I read what Mr. Kelly said, listed the criteria and could only find one airline that suited. I think it's a valid idea. It wouldn't be expen
37 1337Delta764 : The reason why WN does not want the 738 is because it would require a fourth FA in a one-class layout as it would have over 150 seats. This is simply
38 Mariner : Is that a deal killer? I would have thought the chance of increased revenue negated that cost, as with Frontier swapping up to A320's, where the same
39 GentFromAlaska : I doubt it would be AS. There appears to be to much bad blood after the BFI issue I realize all is fair in love and war and business. I recall reading
40 Par13del : May have been the case 20 years ago, since UA showed the way to use Chpt.11 all carriers who used that tool have lower cost than WN, if they lower se
41 Alias1024 : WN has plenty of 73Gs on order, which could replace the SY fleet. The 738s are a desirable aircraft for many airlines around the world, and would pro
42 Mariner : Again, I dunno. I read what he said yesterday, and toyed with starting a thread on it here. But finally, I didn't think he was talking about the shor
43 Atomsareenough : Sure, like I said, they could liquidate them. But then it doesn't really matter that they are 737s A320s, or widebodies, if they would not be incorpo
44 Post contains images KGAIflyer : Off the top of my head, I can see a combination with SY doing a few things. First, look at the SY route map. Okay -- some potential benefits for WN m
45 MSP7378 : I wouldn't rule them out. I think it would give them a nice foothold (small yes) in MSP and I think most of the people of Minnesota would love it. Ju
46 MSP7378 : "Kelly told the paper that Southwest would likely limit any potential future acquisition to an airline going through a bankruptcy restructuring, and w
47 Rampart : And, FINALLY, that much coveted toe-hold into DFW that they've craved! With a link to Branson, no less! -Rampart
48 Viscount724 : Not permitted due to foreign ownership restrictions.
49 QANTAS747-438 : Ugh... getting so tired of this one. Having a 4th FA would not be some earth shattering event for WN. It would require a minor tweak to the schedulin
50 Silver1SWA : Only at airliners.net...
51 Co757 : They should aquire US Airways and park all the airbus.
52 KGAIflyer : Why would anyone who wanted to *make* money buy USAirways? Now -- if you wanted to *lose* money, USAirways is a pretty good sinkhole for cash.
53 DL767captain : SY would be good. WN can go a couple ways, acquire and airline for more 737s, acquire an airline for their route structure (think Frontier), or acquir
54 EA CO AS : They're free to start ANC service anytime they wish, though - they don't need to buy anyone to do it. Problem is the ANC market is already very well-
55 TheCol : Even if there wasn't any foreign ownership restrictions, hell would freeze over before we see WS sell out anytime in the near future. Even if Air Can
56 KGAIflyer : If I'm reading Planespotters correctly -- SY has gone from a onetime total of 41 airframes down to 10 current frames -- and one of those -- a 738 --
57 Nwarooster : Southwest wants to cherry pick apart any airline it may acquire. That includes the employees and any other assets. The employees be damned. Pinnacle p
58 DL752 : Why can't WN worry about their own operations instead of being after other airlines?
59 William : Thats funny, thats what the NWA employees said too of Delta.
60 FX1816 : I think you meant G4 but yeah I don't see any added benefit by adding Allegiant as that would not really help WN with anything. SY could be possible
61 UAL757 : Go away Southwest! Nobody wants you...just because AS has only 737's, it doesn't mean you are a match. I feel like WN is the creepy guy in high school
62 KGAIflyer : I don't think that's going to be a problem. WN is *already* in Seattle -- and Spokane -- and Portland -- and Boise. And they're already filling plane
63 Silver1SWA : Wait...when did WN announce they are acquiring AS?
64 UAL757 : They didn't. I just overreacted because even the thought of WN taking over AS makes me a tit crazy. However, nothing wrong with WN. They do business
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