KensukeAida
Topic Author
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WN To Take Over TZ?

Fri Oct 21, 2005 5:21 am

Call me crazy guys, but am I the only one that thinks WN will end up taking over TZ soon?

Yes. People have mentioned that WN didn't want TZ wholesale, but these same people also mentioned it would be a cold day in hell before WN goes to DIA. They're moving into a market that has been profitable for TZ, and they could use the gates.

If TZ trades in its 757s for 73Gs there will be nothing keeping the two from being incompatible (aside from the charter L-1011s), and there have been plenty of rumours here that TZ can't really hang on alone anymore.

BTW, what is TZ's fleet numbers now anyways?

- John
 
OPNLguy
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 5:29 am

You're crazy and the only one that thinks that way...  Smile

Seriously, I'd doubt it. Their -800s would be a new fleet type for us (requiring a 4th F/A), and after all the ones they returned, I don't think it'd be cost effective to have such a small number, the other "cons" aside. We certainly wouldn't want the 757/L1011 flying....

John Dennison is a sharp guy, so I wouldn't write TZ's obituary too soon....
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
jetdeltamsy
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 6:33 am

Quoting KensukeAida (Thread starter):
Call me crazy guys, but am I the only one that thinks WN will end up taking over TZ soon?

Not very likely. If the rumor-mill has any merit, TZ will soon perish.

Southwest will buy up the gate space at MDW, expanding service with its own equipment and personnel.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
DfwRevolution
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 6:46 am

Quoting KensukeAida (Thread starter):
Call me crazy guys, but am I the only one that thinks WN will end up taking over TZ soon?

A year ago I would have said maybe, now I would say no.

Quoting Jetdeltamsy (Reply 2):
Southwest will buy up the gate space at MDW

Gates aren't bought or sold, the rights to an MDW gate are given by the owner (the City of Chicago)

WN did buy an MDW maintenance facility previously owned by TZ
 
jetdeltamsy
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 7:46 am

Quoting DfwRevolution (Reply 3):
Gates aren't bought or sold, the rights to an MDW gate are given by the owner (the City of Chicago)

WN did buy an MDW maintenance facility previously owned by TZ

I may not understand the fine print of the deal, but Southwest paid ATA millions of dollars to gain control of gates used by ATA.

http://www.airportwire.com/2004/week50/index.html

AirTran: Southwest ATA Bid Is "Clever Trick"
More-notable-than-usual press releases:

Southwest is bidding $100 million on bankrupt ATA assets--

Southwest's bid includes the acquisition of six Chicago Midway Airport gates currently under lease to ATA. The addition of these six gates increases Southwest's capacity by 32 percent, supporting further expansion plans.As part of the bid, Southwest is willing to enter into a code share agreement with ATA, covering certain flights from Chicago Midway to approximately nine ATA domestic nonstop destinations....

AirTran, which already has bid around $90 million for assets including the use of 14 ATA gates, does not approve--

[AirTran] called the Southwest Airlines' bid for ATA Airlines' assets a "clever trick" to eliminate competition at Chicago Midway's Airport.

With direct lease of 25 of the 43 gates at Midway and a marketing arrangement over the use of ATA's remaining eight gates, Southwest Airlines would effectively control 80 percent of Midway Airport. Even if ATA Airlines were to eventually fail or sell rights to its eight gates, the deal with Southwest Airlines would shut out the potential for another hub carrier to operate there.

AirTran Airways has an agreement with ATA to acquire all 14 of ATA's Midway gates and use of some slots at Washington's Reagan National Airport and New York's LaGuardia Airport for $90 million in cash, plus a code share arrangement for its entire system that is valued at well over an additional $100 million....

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Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
typhaerion
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 7:53 am

Wow, this is like the fourth TZ thread today, it must be a record.

I know for a fact that WN will not be taking over TZ soon, that the rumor mill is full of crap again and TZ will not be going under.

See the other threads on this one, but the just is, the employees here care, and we will make this work, even though we are in a bit of a rough spot. The only thing that you guys dont know right now is that we are a hairsbreadth away from securing exit financing from bankruptcy. So keep that in mind when you speak badly of ATA.

We are coming back.
For some, the sky is the limit. For us, it is only the beginning... -- Jack Hunt
 
rumorboy
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 7:54 am

Mayor Daley will decide who gets the gates. Not LUV. Today in the conference call, the analyst's were asking the same question. Kelly said "technically we have some gates that were used as collateral for ATA's loan BUT ultimately it's up to the city of Chicago(mayor Daley) if we get those gates."

Clear as mud now right?  Wink
 
wjcandee
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 8:00 am

Guys -- I don't see why ATA is consistently expected to "perish". While they're laboring under a mountain of debt and other obligations, the fact is that they have a core military charter business that would be sufficient to sustain them if that's all they did. Plainly, they don't want to do just military charter -- or just charter for that matter -- but before they just liquidate the thing, I don't see why their creditors wouldn't want them to try to sustain whatever cash-positive business that they can. Yes, they might have to shrink some more. Yes, they might have to shed even more assets and infastructure. But if we KNOW that they can shed in bankruptcy everything but certain aircraft and certain facilities sufficient to sustain a charter business, and be cash positive, then I assume that they'll be around, at least in that form, for a while.

I was intrigued to see that Southwest only took in 19 million in code-share revenue this quarter. That's a drop in the bucket and therefore very unlikely to give them any incentive to "acquire" ATA. They're much better off using ATA to extend their reach into a couple of markets into which we know they will never venture, coordinate their new DIA service with ATA's, which they are permitted to do, and call it a day. If ATA can provide the coordinating service profitably, then it will keep doing so. If not, then it should shut it down, as it did with BOS and MSP. But either way it should be able to survive in some form.

Just my 2 cents.
 
ouboy79
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 9:14 am

WN went out and did what was needed to be done to keep FL from setting up a hub in MDW and eventually be in line when TZ failed. They will nearly take over TZ anyone without having to go through the merger nightmares.

People really need to wake up and quite giving WN a free pass on everything. They are a cut throat company like any other...they will do what is needed to get ahead.
 
KensukeAida
Topic Author
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 9:26 am

Quoting OPNLguy (Reply 1):
Seriously, I'd doubt it. Their -800s would be a new fleet type for us (requiring a 4th F/A), and after all the ones they returned, I don't think it'd be cost effective to have such a small number, the other "cons" aside. We certainly wouldn't want the 757/L1011 flying....

Well, the 757 and L1011 going is a foregone conclusion.  Smile

However, WN doesn't put maximum seating on their aircraft. So even though the -300s and -700s can seat 149, they only have 137 seats. A 149/150 seat -800 would still put them under the limit. And let's face it...a couple of -800s aren't going to kill WN. It is still a 737NG afterall.

Quoting Ouboy79 (Reply 8):
People really need to wake up and quite giving WN a free pass on everything. They are a cut throat company like any other...they will do what is needed to get ahead.

WN did two mergers already and they were hardly "cutthroat". Herb is NOT Lorenzo.

- John
 
socalfive
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 9:40 am

I've said it before and I'll say it AGAIN, WN will wind up absorbing ATA through a BK deal a little like HP/US, or acquire all the assets in a liquidation. However, I think it's going to be the merger. Post BK, WN might keep ATA alive as a charter with the 752s and L10s and it be a subsidiary for awhile, but look at the rest of the strategies guys... The 753s are becoming 73Gs and all the rest of the network is merging into WN through their first-ever codeshare. Believe me, this is a whole lot of trouble molding this company into a WN clone during BK for WN to walk away from them. The DIA announcement might be nothing more than WN sticking their foot in the water.
 
wjcandee
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 9:53 am

I thought that the 753 to 73G deal was dead. When did it get resurrected?
 
redngold
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 10:37 am

Here's my solution to the 737-800 "problem"...

Pull out some seats. Give more room for each seat and bypass the fourth F/A requirement. Use the -800s on transcontinental routes.

Problem solved.
Up, up and away!
 
ChiGB1973
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 10:46 am

The problem with military charters and charters in general is that they are not "full-time" gigs. The military rarely gives out contracts for more than one year at a time. That is the reason TZ did not buy 767s during their hay-day. The military would not give them a contract for at least 5 years that would have given them the "guaranteed" money to pay for the planes, at least for the specified amount of time (may or may not have been 5 years, but an extended contract).

Mr. Mikelson's told a group of us himself that the charter business is up and down. Scheduled service was supposed to even out the valleys and ridges. The problem with only charter is that during the slow months, people would be laid off, then called back to fill in the busy season. Same thing applies to the jets. What are you going to do with jets during the slow season?

I am concerned about my friend's at TZ. I wish them the best. I am a furloughed ATA employee. I very much enjoyed my job there and hope Mr. Dennison can get them back to what they once were.

M
 
socalfive
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 10:48 am

Quoting Wjcandee (Reply 11):
I thought that the 753 to 73G deal was dead. When did it get resurrected?

Hell it might be, I don't know! I was inquiring about the progress of that deal in another thread but haven't checked for a response. I remember hearing that some of them had been traded, but it's been awhile.
 
ATA767
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 10:54 am

If WN was so bad they would of nailed ATA to the wall already for violating the loan agreement and would not have gone for so many extensions as they have.
 
Jamake1
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 10:58 am

TZ is on their deathbed. No reason for WN to merge, acquire, buy, TZ. The strategy is working just as WN had intended: A strong hold on TZ gates at Midway to lockout a competitor. WN has their own fleet plan and has no interest in MAC charters, TZ's fleet, or other assets. Southwest is brilliantly mangaged and their arrangement with ATA (disguised as a long-term code share relationship) is playing out true to Southwest form. In a few months' time, Southwest will have successfully knocked out a competitor and, at best, TZ will be a shell of its former self flying a few MAC charters with a handful of 757's. Plain and simple....
United's B747-400. "She's a a cruel lover."
 
wjcandee
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 11:14 am

Quoting ChiGB1973 (Reply 13):
The problem with military charters and charters in general is that they are not "full-time" gigs.

Right. Which leads to a different organizational structure and pricing structure. A pure charter airline is a different animal. But there are successful ones (World, Omni, Pace, Ryan, North American, etc.). And the advantage of charter is that you can build fuel into the equation to protect to some degree against price fluctuations. (Military, of course, you get basically 100% protection against it.) Sked service can "even out the valleys", but it can also create its own valleys.

As to bitching about the military not giving a 5 year contract, hey, everyone else deals just fine with that. One way to handle it is to have staggered lease expiration dates so that you're regularly retaining or turning over aircraft. That way you don't get stuck with them in a major downturn. Another is to have a portion of the fleet leased on a PBTH (power by the hour) basis. It costs you more dollars per hour of use than an optimally-used aircraft, but you only pay for the hours you use. You make less money per hour, but it's a buffer against the situation where there's a downturn and you don't get to use the aircraft. Another method is to have low-capital-cost aircraft (like the L1011s, for example). (The offset of that, of course, is that low cap cost aircraft tend to be less reliable and less efficient; that's why the capital cost is lower: they're not as in demand.)

Also, ATA's problem right now isn't that the military business has too many valleys -- right now they are losing money for every day that that L1011 is at GAMCO getting its D check. Valleys in the charter business, if scheduled for properly, can actually be an opportunity to get some maint done.
 
wjcandee
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 11:18 am

Quoting Jamake1 (Reply 16):
WN has their own fleet plan and has no interest in MAC charters

Jeeeeeez the stuff that gets posted here. WN is one of the LARGEST providers of domestic military charter if not THE largest today. (They haven't published the domestic stats anywhere I have been able to see recently.) Over a period of a few years, they went from doing basically none to doing an enormous amount of it. No, they don't do the Long Range International CRAF segment -- but they don't have the aircraft for it. And I'm not saying that they're going to buy ATA to start doing long-range military charters.

But it's simply wrong to say that they don't have any interest in AMC charters. Just totally wrong.
 
7e72004
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 11:22 am

you may be close to exiting bankruptcy...but you still DO NOT have the financing...i don't see why any investors would want to invest in an airline that has shrunk greatly and is still shrinking. Many people here in Indianapolis really could give a rat's ass about ATA...their headquarters may be here but other than that...so what. ATA is no longer the "hometown airline" here.
The next generation of aircraft is just around the corner!
 
7e72004
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 11:28 am

I would like to see AirTran take over the rest of ATA...unfortunately the prior deal between the two did not work out...i think that deal would have been much better for ATA and AirTran.
The next generation of aircraft is just around the corner!
 
socalfive
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 11:41 am

Quoting Jamake1 (Reply 16):
Southwest is brilliantly mangaged and their arrangement with ATA (disguised as a long-term code share relationship) is playing out true to Southwest form.

Perhaps, but I don't think so. There's a lot more factors involved and WN is indeed a brilliantly conceived and managed company but it's not true to their "form" to deep six ATA. What's true to their form is to acquire. There's a lot more left to ATA than meets the eye.
 
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Aloha717200
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 12:36 pm

Quoting KensukeAida (Thread starter):
Call me crazy guys, but am I the only one that thinks WN will end up taking over TZ soon?

Yes.

I think you answered your own question.  bigthumbsup 
 
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flying_727
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 2:27 pm

Quoting OPNLguy (Reply 1):
Seriously, I'd doubt it. Their -800s would be a new fleet type for us (requiring a 4th F/A), and after all the ones they returned, I don't think it'd be cost effective to have such a small number

Not really sure what the number of -800s has to do w/ it, being that WN only has a few -500s.

flying_727

edited for spelling

[Edited 2005-10-21 07:29:42]
On ATA, You're On Vacation
 
OPNLguy
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 2:35 pm

Quoting Flying_727 (Reply 23):
Not really sure what the number of -800s has to do w/ it, being that WN only has a few -500s.

If the number of -800s is less than the 25 -500s we have, it just might be more trouble than it's worth as far as training and spares (commonality aside).
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
Tbird
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RE: WN To Take Over TZ?

Fri Oct 21, 2005 11:24 pm

It wouldn't shock me to see TZ drop all of its domestic service concentrate more on its former core business of doing charters and operate the international flights with Southwest feeding them at MDW, LAX, and perhaps IND. The rumor of TZ's demise really has no merit, nothing has been said not even a hint of their demise. Southwest is also an airline that's not about to throw over 100 million away watching their investment perish. I think ATA will live on just in a form close to what they use to be.
 
FI642
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RE: WN To Take Over TZ?

Sat Oct 22, 2005 1:05 am

The military would love to have more lift right now. LOVE. While requirements have changes for lower payload aircraft, they still need heavy lift. TZ could still do well if they could do more AMC flying.

WN loves flying for AMC too. They have been able to do a lot of back of the clock flying, so a plane that would normally sit, is flying making $$$$$.
737MAX, Cool Planes for the Worlds Coolest Airline.
 
william
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RE: WN To Take Over TZ?

Sat Oct 22, 2005 2:41 am

SWA does do its fair share of Military charters. I was suprised to see how many flying into GRK.
 
Cubsrule
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RE: WN To Take Over TZ?

Sat Oct 22, 2005 3:12 am

Let's ask this question, though. What if TZ does liquidate or is on the brink of liquidation? What assets do they have that WN would really be interested in? Their only significant chunk of gates is at MDW, and they don't even technically belong to TZ. If TZ goes away, WN's actions with regard to TZ do not determine if they get those gates. The city does. TZ does have some facilities (a training facilty IIRC) in Chicago that WN might be interested in. The number of 738s on property is dwindling, and WN would not, I wouldn't think, be interested in the 737 classics. There are some Mexico route authorities and perhaps a couple of others, but WN has shown no interest in international flying. Their initial investment in TZ is a sunk cost. WN is smart enough to know that. If the demise of TZ happens or is imminent, WN gains nothing from acquiring them.
I can't decide whether I miss the tulip or the bowling shoe more
 
ouboy79
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RE: WN To Take Over TZ?

Sat Oct 22, 2005 5:19 am

Quoting KensukeAida (Reply 9):
WN did two mergers already and they were hardly "cutthroat". Herb is NOT Lorenzo.

Perhaps you need to read up on the TranStar merger. That scenerio was more so out of AA's playbook than most other mergers. Buy a competitor, gut it and close it.
 
KensukeAida
Topic Author
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RE: WN To Take Over TZ?

Sat Oct 22, 2005 7:21 am

Quoting Ouboy79 (Reply 29):
Perhaps you need to read up on the TranStar merger. That scenerio was more so out of AA's playbook than most other mergers. Buy a competitor, gut it and close it.

Yes. And maybe you need to read up on the circumstances surrounding Muse Air's (TranStar's name pre-merger) creation. It was created by Lamar Muse to kill WN. It was even called "Revenge Air" in the press. And WN did not close TranStar immediately. They tried to make it work as an upscale WN.

Overall, all of WN's actions in that matter were VERY justified.

- John
 
aseem
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RE: WN To Take Over TZ?

Sat Oct 22, 2005 7:22 am

Quoting KensukeAida (Thread starter):
Call me crazy guys, but am I the only one that thinks WN will end up taking over TZ soon?

at first glance I thought WS is taking over TSBig grin
cheers!!
VT-ASJ
ala re ala, VT-ALA ala
 
ScottB
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RE: WN To Take Over TZ?

Sat Oct 22, 2005 4:20 pm

Quoting Ouboy79 (Reply 29):
Perhaps you need to read up on the TranStar merger.

Perhaps you would benefit from a better understanding of what happened with TranStar at the time. It's a bit ironic that you were responding to a post invoking Frank Lorenzo given that he was much of the reason TranStar was shut down. Lorenzo started a bloody fare war in Houston as a response to TranStar hubbing at HOU. Southwest's decision to shut down TranStar ended the fare war and they were able to salvage part of their investment in MC by selling some of the fleet to CO. Back in 1987, Southwest was far smaller than they are today and continuing to pour money into TranStar wouldn't have been a good decision.
 
N1120A
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RE: WN To Take Over TZ?

Sat Oct 22, 2005 4:39 pm

Quoting KensukeAida (Reply 9):
A 149/150 seat -800 would still put them under the limit.

It would also be a CASM nightmare. They are 12 seats under max capacity on the 73G. 149 seats on a 738 would be 40 seats under max. It is not a staffing issue so much as it is a utilization and costs issue

Quoting 7E72004 (Reply 20):
I would like to see AirTran take over the rest of ATA...unfortunately the prior deal between the two did not work out...i think that deal would have been much better for ATA and AirTran.

FL doesn't have the same financial position as WN do try and do such a thing. Yes, FL is profitable, but they aren't sitting on $3 billion in cash and an spotless credit rating to try and nurse TZ's wounds.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss