kieso
Posts: 33
Joined: Thu Apr 22, 2004 1:13 pm

Could A Big Airline Buy A Low Fare Airline?

Thu Apr 29, 2004 2:00 pm

I was just wondering if there’s a chance a big airline like Delta would buy a low fare airline like America West? At one time there was a lot of talk about this happening. Now I never hear about it anymore.

I believe there should be less airlines but that’s just my opinion
Me is Kieso_I love to fly and it shows! YA
 
ScottB
Posts: 5447
Joined: Fri Jul 28, 2000 1:25 am

RE: Could A Big Airline Buy A Low Fare Airline?

Thu Apr 29, 2004 2:07 pm

It has happened before; AMR bought Reno Air and USAir bought PSA and Piedmont. It's not likely in the current environment, given that most of the network majors can't afford the outlay of cash these days. In the case of America West specifically, I can't see anyone at all being interested in buying them. While they're doing reasonably well with the business as they've restructured it, the fact remains that their two hubs are also Southwest's two largest operations -- and AWA only manages as well as it does by paying its employees less than Southwest pays its employees. None of the other network majors could make their cost structures work at the PHX and LAS hubs.
 
sccutler
Posts: 5568
Joined: Thu Jan 27, 2000 12:16 pm

RE: Could A Big Airline Buy A Low Fare Airline?

Thu Apr 29, 2004 2:24 pm

Well, if you look at market capitalization, Southwest is worth more than...

...well, not just more than any other airline...

...but, more than the whole rest of the airline industry. Combined.

So there is no airline which could manage to buy WN, and WN could buy pretty much anyone they wanted to.

Not that they would.
...three miles from BRONS, clear for the ILS one five approach...
 
kieso
Posts: 33
Joined: Thu Apr 22, 2004 1:13 pm

RE: Could A Big Airline Buy A Low Fare Airline?

Thu Apr 29, 2004 2:34 pm

If WN did try to buy another airline I believe they would fail. They're costs need to stay low in order to make the money they're making. Really, WN can't make hardly any moves because they have to stay cheap to make it. That's why I think they're holding off on any plans for PTV's.

I guess we'll all see what happens and who will win (low fare vs. Major) in the next few years. I can't wait to see what's in the future for them!
Me is Kieso_I love to fly and it shows! YA
 
doug_or
Posts: 3122
Joined: Sat Mar 18, 2000 9:55 am

Lcc

Thu Apr 29, 2004 2:41 pm

just a couple things. Wn did actauly buy Morris air a few years back. I don't know that Piedmont was really a low fare airline. At anyrate, you can add AA buying Aircal to the list, in addition to the people's express purchase by continental (although that, like everything lorenzo did, was complicated). what did all these aquisition have in common? Pointless wastes of money followed by trouble intigrating senority lists and a/c. weeeeeeee, fun.
When in doubt, one B pump off
 
A3192021
Posts: 20
Joined: Sat Apr 24, 2004 9:58 am

RE: Could A Big Airline Buy A Low Fare Airline?

Thu Apr 29, 2004 9:21 pm

British Airways used to own start-up LCC, Go. They eventually sold it to easyJet.
 
access-air
Posts: 1576
Joined: Thu Sep 21, 2000 5:30 pm

RE: Could A Big Airline Buy A Low Fare Airline?

Thu Apr 29, 2004 9:51 pm

Actually,
I think Ther thing with USair and Piedmont was justa merger but I am confident that of the two if it was abuyout Piedmont would have been buying USAir as from what I rememebr Piedmont was always in much better financial shape.
PSA and Air Cal (Origininally Air California) were NOT low cost carriers....they started their lives as INTRA-STATE Carriers long ago. They had their special niches but they both grey into forces to be reckoned with...then in the 80s AA and US decied that they wwere some kind of threat bought them out and well we all knwo whats left of those fine companies...NOTHING.
And as stated AA did the same thing to Reno Air and most mercilessly TWA!!!!
Oh well..

Access-Air
Remember, Wherever you go, there you are!!!!
 
richardw
Posts: 3136
Joined: Tue May 08, 2001 3:17 am

RE: Could A Big Airline Buy A Low Fare Airline?

Thu Apr 29, 2004 10:05 pm

BA did not sell Go Fly to easyJet. BA sold it to a consortium of Go Fly's management and funder 3i. 3i then got a good offer from easyJet and eventually it was sold to easyJet.
Full story is in the book 'Go an Airline Adventure' by Barbara Cassani with Kenny Kemp. I've read it and it is a very good read.
easyJet bought an airline, no aircraft were included.
 
desertjets
Posts: 7570
Joined: Fri Feb 18, 2000 3:12 pm

RE: Could A Big Airline Buy A Low Fare Airline?

Thu Apr 29, 2004 10:13 pm

As many have argued before the costs of buying another airline (LCC or otherwise) generally far outweight the benefits. Could Delta be able to buy America West and maintain its low cost structure (its competitive advantage), probably not. If an airline has a wad of cash burning a hole in its pocket, it can probably better spend it by expanding rather than buying.
Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
 
lauda777
Posts: 161
Joined: Sun Nov 09, 2003 9:17 pm

RE: Could A Big Airline Buy A Low Fare Airline?

Thu Apr 29, 2004 10:22 pm

I think the trend these days is leaning more towards the big airlines starting their own LCC's Like United - Ted, Qantas - Jetstar it works out cheaper for them to start from scratch than to buy an established LCC, and if it doesnt work they can always pull the plug before it gets too big and return the AC to the lessors.
If you can't buy em..... Join em!
We remind passengers all flights are non smoking, if you are caught smoking you will be asked to sit outside on the wing
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Could A Big Airline Buy A Low Fare Airline?

Thu Apr 29, 2004 10:46 pm

Ive heard endless rumors about NW trying aquire AA for some dumb reason, but those rumors were 1997-1999.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Could A Big Airline Buy A Low Fare Airline?

Fri Apr 30, 2004 9:49 pm

Ive heard endless rumors about NW trying aquire AA for some dumb reason, but those rumors were 1997-1999.

Let me correct myself: NW was TRYING to aquire AS, not AA. My mistake....
A Safe Flight Begins With Quality Maintenance On The Ground.
 
EAL757
Posts: 176
Joined: Mon Apr 12, 2004 9:58 pm

RE: Could A Big Airline Buy A Low Fare Airline?

Fri Apr 30, 2004 11:27 pm

Any lowcost carrier willing to be bought out by a larger deserves to go under, given the current financial state.

I might vouch for Continental swallowing up America West or Spirit or something, but if JetBlue, AirTran, Frontier or Southwest approved any kind of buyout, I'd say they deserve to go under (which will ultimately happen)