Paaclipper707
Topic Author
Posts: 30
Joined: Thu Jan 05, 2006 7:05 pm

Alaska Airlines Merger

Thu Nov 23, 2006 12:57 am

I do believe this topic has been mentioned before, I apologize in advance if it irritates anyone, this is not my intention.

In light of the recent merger business, I'm wondering about Alaska Airlines?

Can anyone give some information or thoughts about an AS merger?
I would appreciate a proper discussion without volatile emotion.

Thank you most sincerely,
Your Friend
PAN AMERICAN -Dont Leave the Country Without Us-
 
Jaws707
Posts: 667
Joined: Mon Aug 06, 2001 10:45 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 2:36 am

We had a topic the other week about the possibility of AirTran and Alaska merging. You should find it if you do a search. Some people were saying Alaska and Continental might be a good fit, and many are saying an airline like Alaska tries to be distinctive and has no intention of merging. Just for speculation (and I realize their fleets are completely different) but Alaska and Frontier would create a dominent force in the Western US.
 
rampart
Posts: 1798
Joined: Sun Aug 07, 2005 5:58 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 3:00 am

Correct me if I'm wrong, but doesn't AS have a sizeable "poison pill" in place to discourage such takeovers? (unless they initiated something on their own)

-Rampart
 
HPRamper
Posts: 4588
Joined: Sat May 14, 2005 4:22 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 3:02 am

Alaska and Frontier would be a nice fit together, except for their commitment to totally separate aircraft types. AS may not want to merge, but as far as I know they've been hovering on the line in terms of profitability, not losing much but not making much. They also have an excellent regional, QX, that dominates the Pacific Northwest and has been expanding routes in California.

Before the US/HP merger I thought HP/F9 would be an interesting pair. Right now Alaska already rules the roost as far as north-south routes along the west coast; a Frontier merger would only add a maximum of around ten daily flights to even the largest airports so the result would be minimal. Still, a hub at DEN could be useful as well as F9's east-west routes.

I get a lot of disagreement but I think F9 and B6 would be excellent seeing as JetBlue needs a western hub and Frontier is ordering A320s (IIRC). A lot of people say SLC is a better fit...I just don't think the O&D there can support BOTH DL and B6 hubs - unless of course something happens with DL resulting in changes for SLC. There could of course be an LCC supermerger between Frontier, JetBlue and Spirit someday  Smile
 
User avatar
mariner
Posts: 18089
Joined: Fri Nov 23, 2001 7:29 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 3:18 am

Alaska is probably one of the most attractive airlines out there as a takeover candidate.

Generally well run, with a splendid west coast network, a lock on Alaska and some very valuable rights to Mexico that can't be duplicated.

Plus, they have about a billion dollars in cold, hard cash sitting in the bank.

The problem is that Wall Street knows this. Given that it is not a "huge" airline, the stock price is up there at $43, giving it a market cap not far shy of $2 billion.

Shareholders would expect a decent premium over the present stock price, so it would be a very expensive airline to buy.

Still, it is attractive, but I don't think Airtran would be in the market for it - too expensive. Would Alaska want Airtran? I'm not sure. If US/DL does succeed, it could turn the whole of the southeast into Fortress Delta.

Continental might be a buyer, but I'd guess that if Continental does enter the merger fray they'd be looking at something bigger in the first instance, another legacy carrier.

Quoting Jaws707 (Reply 1):
Alaska and Frontier would create a dominent force in the Western US.

This has been talked about for years, it is a favorite rumor among Alaska's pilots. When Alaska said they were "looking at" Airbus aircraft, the gossip about Frontier reached fever pitch. But Alaska was "just looking" and (to no one's surprise) stayed with Boeing.

Even so, everyone thought that when Horizon started flying for Frontier it was a sign it might happen, but now Horizon is dropping that, and there is no other evidence that Alaska is even interested.

Then again, we have no idea what the Alaska CEO thinks of mergers, they can be very difficult. Mr. Parker of US is clearly fond of them, he sees them as a way of increasing shareholder value. But what would improve Alaska's shareholder value?

mariner
aeternum nauta
 
User avatar
N328KF
Posts: 5806
Joined: Tue May 25, 2004 3:50 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 3:58 am

I do think CO and AS would be great. Not much route overlap, and you could just call pull an Air Mike and rename Alaska to "Continental Alaska" for the Alaska-only routes. And SEA would give CO a focus city in an area that they're geographically weak.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
gmcc
Posts: 135
Joined: Tue Apr 25, 2006 3:54 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 4:24 am

Quoting Mariner (Reply 4):
Generally well run, with a splendid west coast network, a lock on Alaska and some very valuable rights to Mexico that can't be duplicated.

As was broght up in the thead last week, AA is weak on the west coast and codeshares with AS already so if there was a merger I would see them going to AA. I however would prefer them to stay independent.
 
User avatar
cageyjames
Posts: 671
Joined: Fri Nov 03, 2006 2:08 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 4:57 am

Quoting Gmcc (Reply 6):
As was broght up in the thead last week, AA is weak on the west coast

Why is it when I see that I am reminded about AirCal and Reno Air? How many west coast airlines must they destroy?
 
fewsolarge
Posts: 398
Joined: Wed Dec 29, 2004 7:37 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 5:00 am

AS would be a really attractive match for anyone, with the possible exception of UA. Maybe one reason for not selling is that although they've got a great portfolio, the economic conditions to get the maximum price haven't been there for the last five years.
 
rampart
Posts: 1798
Joined: Sun Aug 07, 2005 5:58 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 5:03 am

Quoting Gmcc (Reply 6):
AA is weak on the west coast and codeshares with AS already so if there was a merger I would see them going to AA. I however would prefer them to stay independent.

I agree with the independence vote. It was AA's fault for squandering AirCal and Reno Air, dooming them to futile oblivion rather than using them for West Coast ops. Why would AA not do the same to AS? Would they really care to operate intra-Alaska?

-Rampart
 
briguy1974
Posts: 55
Joined: Fri Aug 26, 2005 5:47 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 5:08 am

AA leave all west coast airlines alone please.... do not screw anymore west coast cities out of good airline service. AS would work with just about every airlines hubs or lack of with there dominate positions in PDX and SEA. unfortunate this does not give CO anything that they have said the wanted...
like an Asian hub and LHR rights. They could develop either SEA or PDX as an Asian hub but CO or AS does not have the frames...
 
User avatar
N328KF
Posts: 5806
Joined: Tue May 25, 2004 3:50 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 5:19 am

Quoting Rampart (Reply 9):
Would they really care to operate intra-Alaska?

Many of the Alaska routes are subsidized, so I'm sure that any purchaser would have to guarantee operation of those routes.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
User avatar
EA CO AS
Posts: 13382
Joined: Wed Nov 14, 2001 8:54 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 5:46 am

Quoting Mariner (Reply 4):
Then again, we have no idea what the Alaska CEO thinks of mergers

None of the officers are fans of mergers. Their plan is to keep Alaska Air Group as an independent entity, growing at anywhere from 3-8% per year.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
travelin man
Posts: 3198
Joined: Tue Mar 14, 2000 10:04 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 5:57 am

I still think that a CO/AS partnership makes the most sense, from a complementary route perspective, as well as a fleet compatibility perspective.

I'm sure AS would like to remain independent, but if it were to merge/be purchased, I think CO makes the most sense.

And please no discussion of AA. As mentioned, they've ruined enough West Coast airlines.
 
jetdeltamsy
Posts: 2688
Joined: Tue Nov 14, 2000 11:51 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 6:02 am

I think American or Contiental are the two most likely to acquire Alaska, should that ever happen. Both need a stronger west coast presence and they'd get the best with Alaska.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
FLY777UAL
Posts: 4830
Joined: Tue May 18, 1999 3:49 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 6:03 am

To throw some more fuel on the fire:

why would the airline have to be mainland-based?  Smile

F L Y 7 7 7 U A L
 
QXatFAT
Posts: 2310
Joined: Fri Feb 24, 2006 3:51 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 6:09 am

AS is not going to merge with anyone. They are doing fine as it is. QX gives them so much as well with its amazing buisness and even here in California it is slowly taking over.

So whats next now for these threads? I can only count how many are going to be started because of the US proposal to DL. Everyones asking about mergers? CO, DL, NW, UA, AS, F9, B6, FL, WN, AA, G4, did I miss any? Go ahead and everyone take an airline and start your thread for mergers. Gosh how many more of these things must we go threw!  Yeah sure
Don't Tread On Me!
 
DesertAir
Posts: 1255
Joined: Sat Jan 28, 2006 1:34 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 6:39 am

I would hate to see the demise of Alaska Airlines. It is one of the few surviving airlines of the west. All of our colorful west coast airlines have been merged into the drad mega carriers. AA did in AirCal and Reno Air, US destroyed PSA, Delta did in Western.
Alaska has carved out a unique market in the West, Baja California and Mexico mainland.
 
DesertAir
Posts: 1255
Joined: Sat Jan 28, 2006 1:34 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 6:39 am

I would hate to see the demise of Alaska Airlines. It is one of the few surviving airlines of the west. All of our colorful west coast airlines have been merged into the drab mega carriers. AA did in AirCal and Reno Air, US destroyed PSA, Delta did in Western.
Alaska has carved out a unique market in the West, Baja California and Mexico mainland.
 
cpw
Posts: 40
Joined: Sun Mar 26, 2006 12:55 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 6:58 am

Quoting DesertAir (Reply 17):
I would hate to see the demise of Alaska Airlines. It is one of the few surviving airlines of the west. All of our colorful west coast airlines have been merged into the drad mega carriers. AA did in AirCal and Reno Air, US destroyed PSA, Delta did in Western.
Alaska has carved out a unique market in the West, Baja California and Mexico mainland.

If anything, I think people have it the wrong way -- Alaska would be more likely to purchase another airline than merging/losing its identity. As was mentioned earlier in the thread, AS has almost $1B in the bank, is in strong financial condition, and making great strides toward consistently being profitable. Plus, fleet commonality will be a huge plus... I look forward to the day when the MD-80s are gone.

Would they actually acquire or be acquired? Highly unlikely. Consistant growth through an expansion of the network to areas previously unserved is the key. Plus (and many Alaskans will probably debate this, but it's at least partially true) Alaska's strength is providing mostly one-connection service to the continental US from metropolitan areas of Alaska (if you're in Adak, you might have 2 connections, but hey...).

Still, I think they'd be much more likely to acquire than be acquired.
 
fewsolarge
Posts: 398
Joined: Wed Dec 29, 2004 7:37 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 7:01 am

Quoting FLY777UAL (Reply 15):
why would the airline have to be mainland-based?

That's right ... JetBlue is on Long Island!  duck 
 
QXatFAT
Posts: 2310
Joined: Fri Feb 24, 2006 3:51 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 7:10 am

Quoting Cpw (Reply 19):
I look forward to the day when the MD-80s are gone.

Dont wait to long because they were just sold to G4  Wink Big grin
Don't Tread On Me!
 
sllevin
Posts: 3312
Joined: Wed Jan 30, 2002 1:57 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 7:22 am

Quoting Mariner (Reply 4):
Plus, they have about a billion dollars in cold, hard cash sitting in the bank.

The problem is that Wall Street knows this. Given that it is not a "huge" airline, the stock price is up there at $43, giving it a market cap not far shy of $2 billion.

From a takeover perspective it's only $1 billion, since if you borrow $2 billion to take over AS, you could then turn around and use the cash to pay off half the acquisition cost.

I've long advocated that AS get that cash tied up to some extent; it actually makes them a MORE attactive takeover target, not less.

Steve
 
as739x
Posts: 4992
Joined: Tue Apr 15, 2003 7:23 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 8:23 am

Ahhhh the weekly thread of us merging with someone! But this week there are 2.

Ladies and Gentleman. Not happening very soon!

QXatFAT, not all of them were sold yet!

ASLAX.
"Some pilots avoid storm cells and some play connect the dots!"
 
User avatar
mariner
Posts: 18089
Joined: Fri Nov 23, 2001 7:29 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 8:32 am

Quoting Sllevin (Reply 22):
if you borrow $2 billion to take over AS, you could then turn around and use the cash to pay off half the acquisition cost.

$2 billion is the market cap. It would cost a great deal more than that. You'd pay a premium to get the airline and then another premium for the billion in cash. So $3 billion to buy AS is a very conservative estimate.

And if the institutional investors - who effectively, if passively, control AS - had an inkling of that happening they would throw a sh*t fit like no tomorrow.

One reason why the institutions love AS is because it is a widows and orphans stock - their money is about as safe there as money can be.

The other widows and orphans airline stock is Southwest. Very few buy LUV stock to make quick money - the shares trade in a very narrow price range.

Quoting Sllevin (Reply 22):
it actually makes them a MORE attactive takeover target, not less.

I think that's what I said. But it also raises the price. Considerably.

mariner
aeternum nauta
 
cpw
Posts: 40
Joined: Sun Mar 26, 2006 12:55 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 9:29 am

Quoting AS739X (Reply 23):
Ladies and Gentleman. Not happening very soon!

I heard that Menzes was going to acquire Alaska, and in a rare move, F9Animal was going to be named President and CEO.  stirthepot   duck 
 
DesertAir
Posts: 1255
Joined: Sat Jan 28, 2006 1:34 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 9:54 am

Thanks CPW for a different perspective. Which carrier do you think AS would be interesting in acquiring? With their partner Horizon they cover a significant part of the West. Maybe, AS would like to own Horizon? Some suggest acquiring F9 for their Denver hub and selected Mexico routes.
 
domokun
Posts: 196
Joined: Sun Sep 24, 2006 5:46 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 10:56 am

Quoting QXatFAT (Reply 16):
So whats next now for these threads? I can only count how many are going to be started because of the US proposal to DL. Everyones asking about mergers? CO, DL, NW, UA, AS, F9, B6, FL, WN, AA, G4, did I miss any? Go ahead and everyone take an airline and start your thread for mergers. Gosh how many more of these things must we go threw! Yeah sure

OMG too many merger threads!
 
Chugach
Posts: 925
Joined: Wed Dec 01, 2004 10:18 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 11:04 am

Quoting EA CO AS (Reply 12):
None of the officers are fans of mergers. Their plan is to keep Alaska Air Group as an independent entity, growing at anywhere from 3-8% per year.

Ah, finally, the Voice of Reason.

Quoting DesertAir (Reply 26):
Maybe, AS would like to own Horizon?

Horizon is already owned by Alaska Air Group, which is the parent company to AS and QX.

Quoting AS739X (Reply 23):
Ahhhh the weekly thread of us merging with someone! But this week there are 2.

Ladies and Gentleman. Not happening very soon!

Ah, finally the other Voice of Reason.
GO ROCKETS
 
cpw
Posts: 40
Joined: Sun Mar 26, 2006 12:55 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 11:15 am

Quoting DesertAir (Reply 26):
Which carrier do you think AS would be interesting in acquiring?

My conclusion was "none of the above." They've shown over the past few years that a carrier can grow and still make great strides toward consistant profitability. Sure, they had a few hiccups, but who hasn't?

I don't see why they would want to - at this point in time - make a substantial change that could significantly impact the company. I think this is why we have these threads coming up so frequently... people are jealous that AS is doing so well.  Smile
 
User avatar
mariner
Posts: 18089
Joined: Fri Nov 23, 2001 7:29 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 11:41 am

I don;t understand this merger mania.

The more airlines the better, I say. Why would anyone want any airline to disappear?

???

mariner
aeternum nauta
 
MEACEDAR
Posts: 682
Joined: Wed Oct 11, 2006 1:57 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 12:05 pm

Is UA and AS a possiblity? You have hubs both on the west coast and on the east coast.

WEST- SEA ALASKA
LAX UNITED

EAST- ORD UNITED
IAD UNITED

United and Alaska have the B737.

What do you think?
 
HAL
Posts: 1740
Joined: Tue Jan 15, 2002 1:38 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 2:26 pm

Or this; a merger between Alaska and Hawaiian. HA flies to many of Alaska's largest cities (LAX, SFO, PDX, SEA, LAS, PHX, ANC etc). There could be a lot of feed from AS to HA through those cities, and would provide AS with widebodies for a few of their 'overloaded' routes, such as SEA-ANC. HA would gain a much more stable management/ownership group, and would make the combined company a strong force in the Pacific Rim.

The merged airline wouldn't have to combine operations, since AS could operate Hawaiian as a separate company under the Alaska Air Group banner, the same as it does with Horizon. That eliminates the equipment/seniority problems that come with integrated mergers.

HAL

[Edited 2006-11-23 06:29:49]
One smooth landing is skill. Two in a row is luck. Three in a row and someone is lying.
 
MEACEDAR
Posts: 682
Joined: Wed Oct 11, 2006 1:57 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 3:11 pm

Quoting HAL (Reply 32):

Not bad...except that they wouldn't really gain anything on the east United States, which is extremely important....MCO, ORD, IAD, JFK, EWR, ATL, BOS, PHL. All these airports need to see some HA and more AS. If this merger happens this is how I see some flights:

HNL-MCO B763
HNL-IAD B763
HNL-ATL B763
HNL-BOS B763
SEA-MCO B738 (more flights per day)
SEA-ATL B738
SEA-BOS B739
SEA-HNL B739

HA really needs to get some east coast destinations like MCO, JFK, IAD, etc. Now, the B763 can easily fly JFK-HNL and bit farther. If JFK can do it, then EWR and IAD can do it. I think it can for MCO as well. ORD is not a big factor because there is many, many flight with UA and AA from HNL and OGG to ORD.

I personally don't think this will happen, but it is a possibility.
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 3:55 pm

Ok, I got to add something to this. This whole merger thing is driving me crazy...expecially when it comes to AS. I have no idea as to why you guys think AS should be taken over. For what? AS is way too profitable to be taken over. The current officers in place will NOT support a merger, neither will the shareholders of the company AND AAG. There is NO chance in hell that AS will merge with anybody, sorry folks... AS is here to stay for a very, very long time. They are very good at what they do. Why change that?

Alaska Airlines is a codeshare whore...they are not stupid folks on International Blvd/Pacific Hwy South.

My advice is to let it be.

My two cents....
A Safe Flight Begins With Quality Maintenance On The Ground.
 
alaska737
Posts: 867
Joined: Sat Feb 18, 2006 11:19 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 4:01 pm

Quoting Cpw (Reply 25):
I heard that Menzes was going to acquire Alaska, and in a rare move, F9Animal was going to be named President and CEO

HAHAHAHAHA, where is he anyway, i honestly think the only possibility, and this aint happining either, is AS and F9. the west would be domminated.

Quoting MEACEDAR (Reply 31):
Is UA and AS a possiblity? You have hubs both on the west coast and on the east coast.

WEST- SEA ALASKA
LAX UNITED

EAST- ORD UNITED
IAD UNITED

United and Alaska have the B737.

What do you think?

no, AS WILL NOT MERGE WITH SOMEONE BIGGER WHO IS GOING TO TAKE THEIR NAME AND HERITAGE!!!!!
 
QXatFAT
Posts: 2310
Joined: Fri Feb 24, 2006 3:51 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 4:02 pm

Quoting AS739X (Reply 23):
QXatFAT, not all of them were sold yet!

Sorry about that AS. I thought that they were all sold already. I guess its just a matter of time. Thanks for the correction though.
Don't Tread On Me!
 
User avatar
EA CO AS
Posts: 13382
Joined: Wed Nov 14, 2001 8:54 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 4:25 pm

Quoting MEACEDAR (Reply 31):
United and Alaska have the B737.

Since that's all WN has, does that automatically mean they must want to merge with AS, too?  duck 

The officers of Alaska Air Group know that historically, mergers are a bad idea - they cost a LOT of money and kill employee morale. Besides, by codesharing with someone (or in the case of AS, multiple carriers) much larger than you, you can realize most of the revenue benefit of a merger without all the headache and cost that comes with it.

AAG will continue to be an independent entity growing both the Alaska Airlines and Horizon Air brands through controlled, intelligent, disciplined "organic" growth - mergers are not a part of the future for AirGroup.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 4:38 pm

Quoting EA CO AS (Reply 37):
The officers of Alaska Air Group know that historically, mergers are a bad idea - they cost a LOT of money and kill employee morale

 checkmark  Look no further than the USAirways EAST employees. They are still very upset people.

Quoting EA CO AS (Reply 37):
Besides, by codesharing with someone (or in the case of AS, multiple carriers) much larger than you, you can realize most of the revenue benefit of a merger without all the headache and cost that comes with it.

 checkmark  Anyone with a high school diploma should know this. Codesharing is a HUGE HUGE money maker!
A Safe Flight Begins With Quality Maintenance On The Ground.
 
Paaclipper707
Topic Author
Posts: 30
Joined: Thu Jan 05, 2006 7:05 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 4:50 pm

Thank you for your help. I have the information I need for my project at the airline.

For those of you who made comments regarding your weariness of this subject I can fully appreciate your feelings.
However your comments are not useful to me in my current endeavors. (Refer to my original post)

At this time I encourage an end to this post. If you would like to send me comments personally, I welcome that.

Thank you again with Respect,

PaaClipper707
-Post Creator  praise 
PAN AMERICAN -Dont Leave the Country Without Us-
 
User avatar
EA CO AS
Posts: 13382
Joined: Wed Nov 14, 2001 8:54 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 5:03 pm

Quoting QXatFAT (Reply 21):
Quoting Cpw (Reply 19):
I look forward to the day when the MD-80s are gone.

Dont wait to long because they were just sold to G4

That's where, in the 3Q06 financials, you'll see a charge taken against earnings for the "purchase" of 5 MD-80s. These were planes that were being leased, but made more sense to buy outright and sell as a package with 15 other MDs instead of just paying off the rest of the lease and giving them back to the lessor.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
sllevin
Posts: 3312
Joined: Wed Jan 30, 2002 1:57 pm

RE: Alaska Airlines Merger

Thu Nov 23, 2006 6:16 pm

Quoting Mariner (Reply 24):
$2 billion is the market cap. It would cost a great deal more than that. You'd pay a premium to get the airline and then another premium for the billion in cash. So $3 billion to buy AS is a very conservative estimate.

While there would clearly be a premium, I don't believe it would be that much.

Not to mention that with 50% + 1 share, you control the airline and the cash. So even taking your figures for a premium, you can acquire AS for $1.5 billion, strip the $1 billion in cash, and be out of pocket a mere $500 million.

Steve
 
User avatar
mariner
Posts: 18089
Joined: Fri Nov 23, 2001 7:29 am

RE: Alaska Airlines Merger

Thu Nov 23, 2006 7:42 pm

Quoting Sllevin (Reply 41):
While there would clearly be a premium, I don't believe it would be that much.

Then we believe different things and clearly have different standards when it comes to business ethics.

I would guess the instutional investors would require an extremely attractive premium - there is no other reason for them to sell.

Quoting Sllevin (Reply 41):
you can acquire AS for $1.5 billion, strip the $1 billion in cash, and be out of pocket a mere $500 million.

Stripping the $1 billion would, in part at least, be a considerable sticking point.

It would leave the company with no cash to pay the very high cost of merging two airlines. It would weaken AAG's credit rating and limit its ability to borrow money at reasonable rates.

The potential for asset stripping - which is what this would be - would make any offer even less attractive to the present shareholders. It is hard to imagine that the BOD would agree or that those careful, clever, conservative institutions that value AAG would willingly be party to such dubious corporate games.

And it would probably have a deleterious effect on the stock price of the acquiring raiders, so any share swap involved would be based on false assumptions.

It has happened, of course. Frank Lorenzo comes to mind.

mariner
aeternum nauta
 
sjot
Posts: 24
Joined: Tue May 28, 2002 11:42 am

RE: Alaska Airlines Merger

Fri Nov 24, 2006 1:35 am

Alaska should by Aloha ... similar fleets ... and the route systems would mesh quite well
 
Tango-Bravo
Posts: 2887
Joined: Sun Jun 17, 2001 1:04 am

RE: Alaska Airlines Merger

Fri Nov 24, 2006 3:06 am

It can be predicted with certainty that Alaska Airlines/Horizon Air will be acquired by another airline... IF and when someone offers a price that is too good for the shareholders of Alaska Air Group to refuse.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: Alaska Airlines Merger

Fri Nov 24, 2006 3:13 am

Quoting AirframeAS (Reply 34):
AS is way too profitable to be taken over.

Actually that is the reason why they would be taken over... Wink
"Up the Irons!"
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Alaska Airlines Merger

Fri Nov 24, 2006 4:05 am

Quoting Jacobin777 (Reply 45):
Actually that is the reason why they would be taken over...

Negative. I disagree.

So now you are going to say WN should be taken over in a hostile way too because they very profitable? Whatever it is that you are smoking, you gotta get off of, man.

AS IS NEVER GOING TO BE MERGING WITH ANYBODY!!! CODESHARING IS THE WAY TO GO!!! Its a money maker, why fix something that is NOT broken?
A Safe Flight Begins With Quality Maintenance On The Ground.
 
User avatar
Stitch
Posts: 22920
Joined: Wed Jul 06, 2005 4:26 am

RE: Alaska Airlines Merger

Fri Nov 24, 2006 4:18 am

Quoting Paaclipper707 (Thread starter):
In light of the recent merger business, I'm wondering about Alaska Airlines? Can anyone give some information or thoughts about an AS merger?

AS' strength is they partner with just about everyone in OneWorld and SkyTeam. They funnel a great deal of West Coast traffic for AA and NW, plus a goodly portion of CO and DL. As such, they're in no hurry to merge with anyone.

AS and UA will not merge because UA already has a very strong presence on the West Coast. Adding AS would be superfluous, plus AA (and probably NW) would enter into a bidding war as they need AS' traffic feed into and out of their own.

[Edited 2006-11-23 20:20:52]
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: Alaska Airlines Merger

Fri Nov 24, 2006 4:31 am

Quoting Stitch (Reply 47):

I think you summed it up better than I could, Thanks man.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: Alaska Airlines Merger

Fri Nov 24, 2006 5:16 am

Quoting AirframeAS (Reply 46):
Quoting Jacobin777 (Reply 45):
Actually that is the reason why they would be taken over...

Negative. I disagree.

Er, I think you need to review as to why one of the reasons a company takes over another company.

I will ask you this..would you rather buy a good company with a healthy balance sheet and growing revenues or a company which is on its way to being finished off?
"Up the Irons!"

Who is online

Users browsing this forum: 717atOGG, 817Dreamliiner, ACDC8, Bing [Bot], BobbyPSP, Cory6188, eicvd, FlyCaledonian, flydia, flyingclrs727, gennadius, Google Adsense [Bot], mafaky, mxaxai, NZdsgnr, rutankrd, Triple7s, Tristarsteve, United1, vv701, Wingtip1005, Yahoo [Bot] and 289 guests