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Is Alaska Airlines Prime For Purchase?  
User currently offlineAirlineReporter From United States of America, joined Jun 2010, 78 posts, RR: 0
Posted (3 years 3 months 2 weeks 6 days 16 hours ago) and read 10961 times:

I have been hearing rumors of a possible Alaska Airlines purchase in the next few years and wondering what others might think. It seems to me a purchase by Southwest Airlines or Delta Air Lines might make sense.

Delta currently works closely with Alaska to feed their international Asian flights from the west coast and they codeshare flights as well.

Southwest just took over AirTran and maybe they will be looking to take other airlines once AirTran is fully absorbed. Alaska has flights to Alaska, down the west coast and to Hawaii that Southwest doesn't currently have.

Jan 1st Horizon (which is owned by the Alaska Air Group) will start fully flying fully CPA. That would seem to make it easier to sell with Alaska, separately to another company or to just dissolve the airline completely.

Thoughts?

52 replies: All unread, showing first 25:
 
User currently offlineluv2fly From United States of America, joined May 2003, 12090 posts, RR: 50
Reply 1, posted (3 years 3 months 2 weeks 6 days 16 hours ago) and read 10936 times:

This topic comes up so often. AS is a code share whore and that works very well for them. All the airlines get the benifits withh out having to buy the cow.


You can cut the irony with a knife
User currently offlinergreenftm From United States of America, joined Jan 2008, 296 posts, RR: 0
Reply 2, posted (3 years 3 months 2 weeks 6 days 16 hours ago) and read 10923 times:

Is someone really going to bring this up again? I wish they would just develop a script that would close and delete any thread that dicusses Alaska being purchased by another airline. Every month for years now it seems, someone has to bring this up. Really a tired topic IMO.

User currently offlineAirlineReporter From United States of America, joined Jun 2010, 78 posts, RR: 0
Reply 3, posted (3 years 3 months 2 weeks 6 days 16 hours ago) and read 10896 times:

Well I was surprised not to find any other posts on this, but searched the forum before posting and nothing came up before I posted on the "are you sure you really want to do this"

But I also think the fact that Southwest has changed their game and Horizon has moved to CPA does change things a bit more.


User currently offlinergreenftm From United States of America, joined Jan 2008, 296 posts, RR: 0
Reply 4, posted (3 years 3 months 2 weeks 6 days 16 hours ago) and read 10867 times:

It doesn't seem to matter what the topic is, it could be talking about BA's fleet count in the 1980's and someone will bring up a rumor they heard about AS merging or buying HA/DL/AA/VX/B6/WN or US.

Doing a quick search, I found the following:

AS+merger&submit=" target="_blank">http://www.airliners.net/aviation-fo...field=datedesc&q=AS+merger&submit=

[Edited 2010-12-27 15:14:22]

User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12058 posts, RR: 52
Reply 5, posted (3 years 3 months 2 weeks 6 days 15 hours ago) and read 10787 times:

Quoting rgreenftm (Reply 4):
they heard about AS merging or buying HA/DL/AA/VX/B6/WN or US.

Really??????

What I heard was AS was buying CA, BA, AC, AF/KL, LH, NH, QF, SQ, and KE, as well as picking up the now defunct MX and was going to go head to head against EK and their A-380s with nothing but B-737NGs.

A friend of mine who works for AA and has a second cousin at DL, who said it was confirmed through a former girlfriend at UA who got it straight from the mouth of a baggage handler at US.

              


User currently offlinesxf24 From United States of America, joined Aug 2007, 1250 posts, RR: 0
Reply 6, posted (3 years 3 months 2 weeks 6 days 15 hours ago) and read 10785 times:

If an airline has ~$3.0B laying around to purchase AS and a plan to see a decent return on the purchase, they'd have already bought them.

Fortunately, neither AA or DL has cash to spare or any chance of successfully integrating AS.

AS has the 2nd strongest (by far) financial position after WN, according to the credit rating agencies. It less leveraged, has more cash (as a % of revenue) and has generally been more profitable than any other carrier outside of WN and Allegiant.


User currently offlinePlanesNTrains From United States of America, joined Feb 2005, 5266 posts, RR: 29
Reply 7, posted (3 years 3 months 2 weeks 6 days 15 hours ago) and read 10753 times:

Sadly, if and when that day finally does come, you can be sure that there will be a rush here to be the first to say "I called it!" Nevermind that people have been calling it for....well, forever. I remember being close to buying some stock around the beginning of 2000 on strong rumors that Delta was gonna make a bid. Then 261 happened and everything changed. Glad I didn't move forward on that rumor.

-Dave



Totes my goats!
User currently offlineDocLightning From United States of America, joined Nov 2005, 18675 posts, RR: 58
Reply 8, posted (3 years 3 months 2 weeks 6 days 14 hours ago) and read 10575 times:

Quoting sxf24 (Reply 6):
If an airline has ~$3.0B laying around to purchase AS and a plan to see a decent return on the purchase, they'd have already bought them.

Not necessarily. AS needs to want to be bought, first. My guess is that they don't.


User currently offlineEA CO AS From United States of America, joined Nov 2001, 13252 posts, RR: 62
Reply 9, posted (3 years 3 months 2 weeks 6 days 14 hours ago) and read 10513 times:
Support Airliners.net - become a First Class Member!

Is Alaska Airlines Prime For Purchase?

No.

WN/FL will be sorting out their marriage for the next few years at least, and a buyout of AS doesn't solve any glaring deficiencies in their route network.

UA/CO will be sorting out their marriage for the next few years at least.

AA is a partner and already realizes substantially all the benefit of a purchase without the cost or headaches of one.

DL is a partner and already realizes substantially all the benefit of a purchase without the cost or headaches of one.

Neither AA nor DL would try purchasing AS because they'd lose the revenue the other partner brings in, making AS less attractive.

US would not solve any glaring deficiencies in their route network by purchasing AS, and it's highly debatable whether they'd be able to muster the resources to purchase AS.

As has been pointed out already, AS is financially VERY strong and could actually be in the position of an acquirer in the future, as they have no interest in being purchased.

[Edited 2010-12-27 16:37:24]


"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlinePlainplane From United States of America, joined Mar 2008, 832 posts, RR: 1
Reply 10, posted (3 years 3 months 2 weeks 6 days 14 hours ago) and read 10457 times:

Quoting EA CO AS (Reply 9):
As has been pointed out already, AS is financially VERY strong and could actually be in the position of an acquirer in the future, as they have no interest in being purchased.

One of my coworkers was discussing the possibility of AS actually taking over B6. Is this actually feasible?


User currently offlinetype-rated From United States of America, joined Sep 1999, 4841 posts, RR: 19
Reply 11, posted (3 years 3 months 2 weeks 6 days 14 hours ago) and read 10399 times:

Quoting PlanesNTrains (Reply 7):
Sadly, if and when that day finally does come, you can be sure that there will be a rush here to be the first to say "I called it!"

That's just the way a.net culture works! Just like being the first to point out a grammatical error in a posting,or a misspelled word. It empowers them!



Fly North Central Airlines..The route of the Northliners!
User currently offlinejeb94 From United States of America, joined Oct 2004, 588 posts, RR: 5
Reply 12, posted (3 years 3 months 2 weeks 6 days 14 hours ago) and read 10358 times:

Quoting Plainplane (Reply 10):
One of my coworkers was discussing the possibility of AS actually taking over B6. Is this actually feasible?

The question you should ask yourself is why? Why would AS attempt a purchase of B6? Does such a thing fit in with the current business model and plans of AS? Just from what I've seen I have to say no. Culturally they are very different. They operate differently from each other. They have different philosophies. Some of these differences are to the point of being totally opposite. Yes they are both airlines but from that point they tend to take different paths.


User currently offlinea340crew From United States of America, joined Jan 2008, 274 posts, RR: 0
Reply 13, posted (3 years 3 months 2 weeks 6 days 11 hours ago) and read 9823 times:

Republic? Merge it in with Frontier.

User currently offlineSuperDash From United States of America, joined Sep 2003, 574 posts, RR: 0
Reply 14, posted (3 years 3 months 2 weeks 6 days 11 hours ago) and read 9595 times:

Simply put...Yes.

Will Delta or American pay a premium?....Yes

Will an acquisition solidify an Alliance?....Yes - both SkyTeam or OneWorld.

Do either Delta or American have a big enough ego to acquire vs play together and share Alaska?....Yes, both have the Ego to take out the other

Is there an Alliance War going on?.....Yes

Prediction....Alaska will either be acquired after SkyTeam announces at least 2 new international routes from Seattle... OR... Alaska will be forced to join an Alliance and dump the other major partner.

Jet Blue merger thread....Same answers.


User currently offlineroadrunner165 From United States of America, joined Oct 2000, 861 posts, RR: 9
Reply 15, posted (3 years 3 months 2 weeks 6 days 11 hours ago) and read 9558 times:

I think another hurdle for any carrier that might consider buy AS is their Alaska operations. I'd guess a big portion of AS's profits are made flying intra-Alaska flights and flying Alaskans to and from the lower 48. For a big carrier like Delta or America is might just be too much hassle to put such a large emphasis and focus on the Alaska market which is a very hard place to operate in. Anchorage and Alaska is not like any other hub in the USA.

User currently offlineAirport From , joined Dec 1969, posts, RR:
Reply 16, posted (3 years 3 months 2 weeks 6 days 10 hours ago) and read 9413 times:

Here we go again! The weekly thread talking about who's going to buy AS. It's hilarious how so many members here see AS as this weak little carrier who has zero control over their destiny, just trying to stay afloat while these other carriers are circling them waiting to jump as if they are easy prey. This topic has been discussed to death and I'm done debating. Unless something absolutely drastic changes that no one could have possibly predicted, it's not going to happen.

Cheers,
Anthony/Airport


User currently offlinedl767captain From United States of America, joined Mar 2007, 2539 posts, RR: 0
Reply 17, posted (3 years 3 months 2 weeks 6 days 10 hours ago) and read 9231 times:

Alaska kind of sells itself out to a lot of airlines which seems to work pretty well. I think the best match would be DL just with the amount DL would get out of them. I'm sure WN might take a look at them if they weren't busy with Air Tran. But I just don't think Alaska is up for sale, they are kind of in a weird position which just works for them

User currently offlineSchweigend From United States of America, joined Jun 2010, 573 posts, RR: 2
Reply 18, posted (3 years 3 months 2 weeks 6 days 10 hours ago) and read 9101 times:

I remember a nice topic here recently about AS and HA getting together. Ahh, memories.

I'd've linked it if I could've found it.


User currently offlineburnsie28 From United States of America, joined Aug 2004, 7502 posts, RR: 8
Reply 19, posted (3 years 3 months 2 weeks 6 days 9 hours ago) and read 8732 times:

Quoting sxf24 (Reply 6):
If an airline has ~$3.0B laying around to purchase AS and a plan to see a decent return on the purchase, they'd have already bought them.

I don't think AS is worth near that much, considering NW which is quite a bit more sizable and had much more valuable routes was around 6 billion.

Quoting sxf24 (Reply 6):
Fortunately, neither AA or DL has cash to spare or any chance of successfully integrating AS.

AS would be easy to integrate with either company.



"Some People Just Know How To Fly"- Best slogan ever, RIP NW 1926-2009
User currently offlineHAL From United States of America, joined Jan 2002, 2529 posts, RR: 53
Reply 20, posted (3 years 3 months 2 weeks 6 days 8 hours ago) and read 8609 times:

Whoever had Monday, December 27th, 3pm PST, in the pool for the next AS merger thread, please step forward and collect your winnings.

The pool for the timing of the next thread is now open. No bids for a time later than 7 days from now will be accepted.  

HAL



One smooth landing is skill. Two in a row is luck. Three in a row and someone is lying.
User currently offline707lvr From United States of America, joined Jun 2004, 570 posts, RR: 2
Reply 21, posted (3 years 3 months 2 weeks 6 days 8 hours ago) and read 8557 times:

Well, Airline Reporter, now you know what happens when you bring up a topic that the old hands have seen before. They don't have to open and read it, but they do. They don't have to post a condescending comment, but they take the time to do so. Take heart, next time somebody brings up Alaska Airlines being sold, you can jump on them too! While I'm at it, the reason so many ridiculous, wasteful, destructive and narcissistic mergers happen is that too many companies have three people (Chmn, CEO, COO) as "boss" with nothing better to do. As for AS, there are always one or two successful airlines around that can be made worse by merging with somebody that will never make any money.

User currently offlineDocLightning From United States of America, joined Nov 2005, 18675 posts, RR: 58
Reply 22, posted (3 years 3 months 2 weeks 6 days 6 hours ago) and read 8125 times:

Quoting EA CO AS (Reply 9):


As has been pointed out already, AS is financially VERY strong and could actually be in the position of an acquirer in the future, as they have no interest in being purchased.

It might be an HP/US-style merger, though. If AS has expansion in its mind, then they have a branding problem. You can't be Alaska Airlines when Alaska is only a minor (and peripheral) part of your route network. As it is, they are running on brand recognition. So if they bought, say US, they might rebrand as US. If they bought AA they'd rebrand as AA.

Problems: 1) Doing so would mean that they would lose their traffic from DL, which is no small thing. 2) Of the airlines in the US that are "up for grabs" from a legal/regulatory standpoint, the only two left are AA and US. DL and UA have recently merged and regulators would balk if either one were to try to merge with AS. Both of these airlines are currently either in management or labor hell right now and nobody at AS wants the headaches.

But SEA is an interesting hub. AS basically serves as a primarily domestic/Canada feeder to a Seattle hub. Their code-share and interline agreements feed operations at two legacies, including international flights. In that market, neither legacy needs to operate very much in the name of regional/feeder flights. It's an interesting arrangement and I'm a bit surprised it hasn't popped up in other places yet. In a way, it's a swing back to the "way it used to be" where there was a combination of huge international carriers (PA, TW, etc.) and then domestic carriers (UA, CO, etc.).


User currently offlinegoldenstate From United States of America, joined Feb 2010, 552 posts, RR: 5
Reply 23, posted (3 years 3 months 2 weeks 6 days 2 hours ago) and read 7489 times:
Support Airliners.net - become a First Class Member!

This thread is rife with factual inaccuracies, logical fallacies, and wishful thinking.

User currently offlineairliner777 From United States of America, joined May 2000, 493 posts, RR: 0
Reply 24, posted (3 years 3 months 2 weeks 6 days 2 hours ago) and read 7461 times:

Quoting sxf24 (Reply 6):
If an airline has ~$3.0B laying around to purchase AS and a plan to see a decent return on the purchase, they'd have already bought them.

"LAN Alaska" maybe?? hahahaha j/k ok  


25 JBo : Welcome to Airliners.net
26 bobnwa : Mergers hardly ever take place using cash. Instead they involve a transfer of stock, either the purchasing companies stock or a new stock offering. T
27 caljn : This is the merger CO should have gone after, not UA. What a fabulous airline that would have made!
28 Post contains images seabosdca : But not profitably. High-cost legacy carriers have repeatedly demonstrated that, try as they might, they simply can't compete in the brutal West Coas
29 isitsafenow : Business-wise, I don't see the advantage of this tie-up. Nice merger, but $$wise, I don't see it. safe
30 FURUREFA : I've said it before and I'll say it again, AA will never purchase AS - they're smarter than that. AA's costs are so high and AS's so low that the amou
31 hatbutton : It most certainly is worth that much. AS has plenty of valuable routes, including the state of Alaska that nobody can get into. As it stands, the sto
32 tistpaa727 : What is quite humorous about this thread is that so many are quick to complain and moan about how often this is discussed. Here's a thought...don't op
33 SolarFlyer22 : Its a well run airline with good cost structure, routes and planes. It reminds me a lot of Hawaiian which is similar in that its a local well run airl
34 seabosdca : Eliminate duplicative non-flying functions and rationalize fleet usage to some degree (e.g., you might see 767s on a few of AS's busiest core routes
35 bobnwa : The DL/NW merger has gone fairly smoothly hasn't it? Look at your own numbers. You show that the stock market believes that AS is worth $2.05 billion
36 hatbutton : Nobody buys another company at market value. They always pay a premium. That was my point. Even WN paid a 100% premium for FL. Just the stock value i
37 n53614 : Now that the age-old question regarding the retirement of Northwest DC-9s has been (somewhat) answered, it looks like we have to discuss Alaska Air's
38 Post contains images chrisair : It's talked about seemingly every week. In any event, the FAs on my Alaska flight last week mentioned they heard WN would be calling "soon." Since we
39 413X3 : More important than an AS purchase, when will DL get rid of their DC-9's???
40 Post contains images Tomassjc : That would be so cool... That's where my career started in 1978! I will have come full circle! LOL Tom AS SJC[Edited 2010-12-28 14:01:48]
41 Post contains images rwy04lga : Ah HA!
42 Post contains images Tango-Bravo : As I have maintained since 'way back when' with regard to rumors/speculations of an impending sale of Alaska Airlines... I can guarantee that Alaska A
43 413X3 : I would not be surprised if activist shareholders would be the reason for a merger, like they have demanded of other companies in the past.
44 EA CO AS : That only happens when shareholders aren't happy with their investment. Have you actually SEEN how ALK is performing? Didn't think so.
45 GlobalCabotage : If it "ain't broken, don't fix it!" But, if it is in the best interest of AS shareholders, all options are on the table. AA: Would be a nice fit, but
46 Post contains images stitch : AA would just close them up within a few years like they did Air Cal and Reno Air. Seriously, AS has carved out for itself a pretty protected and pro
47 Post contains images PlanesNTrains : Hey, it's better than him learning about it on the streets. Wow, the stock is really doing well! Cash on hand? I can't imagine them getting away with
48 bobnwa : If that is your opinion then fine, but there are no" numbers to look at to prove your point".
49 sxf24 : In addition to market cap, a common measure of a company's worth is Enterprise Value, which is market cap plus net debt. The current EV for ALK is ~$
50 hatbutton : It's not my opinion. sxf24 said it better than I did. There are more things at stake than just the stock price, in addition to most companies paying
51 bobnwa : Are you sure that AS has $1.3 billion in unencumbered cash on hand or does it have access to that amount vis loans from various financial institution
52 Post contains links hatbutton : Yes I am positive. A quick look at the financial statements will reveal that AS has $1.3+ billion worth of cash in the bank and marketable securities
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