User avatar
STT757
Topic Author
Posts: 13227
Joined: Tue Mar 28, 2000 1:14 am

Could / Should G4 Consider Merging/acquiring F9?

Tue Apr 02, 2013 9:12 pm

Would G4 acquiring F9 be something that might be a solution for both carriers? F9 has been headed away from the traditional services, DEN hub, and more towards the G4 mode (TTN). F9 and G4 merging would give G4 some newer aircraft to replace the MD-80s. They are starting to bump up against each other in some markets, combining would give them a leg up on their next competitor NK.

(According to Wikipedia)

G4 has 61 MD-80s, F9 has 50 Airbuses. Seems to me G4 gets a chance to totally reorganize to a younger fleet.

In addition to the existing G4 vacation markets in Arizona, Nevada, California, Hawaii and Florida G4 would be able to capitalize on F9's history in Colorado to perhaps start marketing Ski vacations. Similar to their other destinations, weekly services to Colorado ski resorts. Seems like good opportunities to further promote their vacation packages.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
Jerseyguy
Posts: 2027
Joined: Sun Oct 30, 2005 12:05 pm

RE: Could / Should G4 Consider Merging/acquiring F9?

Tue Apr 02, 2013 9:35 pm

I find with most of these true ULCC airlines, you think your saving money but when you add in all the services that you need, it ends up costing almost the same price as an LCC. G4 has seat-assignment at time of booking fees of up to $75!!!, credit card surcharges and a carrier usage fee (which is kind of like NKs charge, for use of the website only way to avoid is to go to the airport)

That being said, it does make sense in the business sense. F9 employees hate the outsourcing of their airport staff just wait till they work for G4)

[Edited 2013-04-02 14:42:01]
Webmaster of an unoffical TTN page see profile for details
 
EricR
Posts: 1223
Joined: Mon Jul 26, 2010 4:15 pm

RE: Could / Should G4 Consider Merging/acquiring F9?

Tue Apr 02, 2013 9:45 pm

One thing to consider is that while both G4 and F9 are ULCC's, they operate different types of business models. G4 does not offer connections, G4 does not fly international routes, and G4 focuses on selling combined travel packages as opposed to just airfare.

NK would be a better match followed by B6.
 
ScottB
Posts: 5458
Joined: Fri Jul 28, 2000 1:25 am

RE: Could / Should G4 Consider Merging/acquiring F9?

Tue Apr 02, 2013 9:56 pm

Quoting STT757 (Thread starter):
Would G4 acquiring F9 be something that might be a solution for both carriers? F9 has been headed away from the traditional services, DEN hub, and more towards the G4 mode (TTN). F9 and G4 merging would give G4 some newer aircraft to replace the MD-80s.

In short: Not really. Using the F9 fleet to "replace the MD-80s" would imply a much, much smaller combined carrier. And G4 doesn't really need to buy F9 to acquire aircraft; there are plenty of A319's available at attractive prices for G4 to pick up on its own. In fact, G4 management said so much when they announced the addition of the Airbus to their fleet. As the NEO's start to roll off the line, values of the OEO A32X aircraft in service will decline more rapidly (as will happen with the 737NG-to-737MAX transition), so G4 will have further opportunities to acquire good-quality used Airbuses at advantageous prices.

As things currently stand, G4 would be well-served by putting their A319's into high-utilization lines of flying and using the MD-80's primarily on shorter routes and peak-flying days. The lease costs of the A319's are significantly higher than G4's ownership costs for the MD-80's, but this is counterbalanced by the A319's lower block-hour cost (also keeping in mind that there is higher revenue potential with the MD-80, since it has more seats).
 
stlgph
Posts: 9060
Joined: Tue Oct 12, 2004 4:19 pm

RE: Could / Should G4 Consider Merging/acquiring F9?

Tue Apr 02, 2013 10:14 pm

Allegiant doesnt want an airline in its portfolio.
Allegiant's focus and main model is a travel company operating its own air services.
if assumptions could fly, airliners.net would be the world's busiest airport
 
Bobloblaw
Posts: 1680
Joined: Fri Jan 13, 2012 1:15 pm

RE: Could / Should G4 Consider Merging/acquiring F9?

Tue Apr 02, 2013 11:35 pm

What for???? Another a.net question.
 
DesertAir
Posts: 1270
Joined: Sat Jan 28, 2006 1:34 am

RE: Could / Should G4 Consider Merging/acquiring F9?

Wed Apr 03, 2013 2:33 am

Both airlines seem to be very different creatures (pardon the pun). Frontier functions as a traditional airline, hub and spoke and some point to point. Allegiant functions has a scheduled (frequencies) in response to demand airline. I think with the merger and creation of mega carrier, there is and will be room for smaller nitch players and start/ups.
 
PlanesNTrains
Posts: 5494
Joined: Tue Feb 01, 2005 4:19 pm

RE: Could / Should G4 Consider Merging/acquiring F9?

Wed Apr 03, 2013 4:58 am

I see it a little differently, though I'm not sure it matters as how I see it doesn't mean it would work.  

F9 operates hub-and-spoke, point-to-point, and Apple Vacations-type scheduled/charter services. Quite a blend of operations, and a pretty decent mix of each. AFAIK, blending the vacations-oriented G4 with the more tradionally-weighted F9 might give a really nice hybrid mix for the combined system. I don't think you'd need to eliminate one or the other necessarily either - G4 could keep doing what G4 does, with F9 transitioning some of the Apple-type stuff to G4 perhaps.

I can see a lot of synergies between the two in station costs/staffing, fleet training/maintenance (Airbus), and sharing of the vacation services and expertise of G4 but morphed onto the F9 system as well.

With fleet, I'd imagine F9 taking on the 80 NEO's, with their existing CEO's (all owned anyhow) moving over to G4. This woud keep the newer, more efficient (and expensive) fleet flying higher-frequency schedules at Frontier, while the older, more maintenance driven and less efficient (but less expensive to own) fleet would fly the lower utilization schedules of G4.

The travel arm that currently sells G4 itineraries could just as easily sell Frontier itineraries. At select airports, there could be a limited option of interlining, at least as a trial. I see this as limited - perhaps a few cities would have G4 service to DEN in the winter for vacations, but offering connections to F9 onward points.

I've pondered these things before so I'm not saying anything new or original. I think one big impediment would be the $150M (or whatever it is) judgment against F9 by Republic that they have deferred due to acquiring F9. Unless Bedford wants to explain to the shareholders of Republic why he is writing that off, he will need to get at least get that plus change for Frontier, and that doesn't include any Frontier debt assumptions, repaying Republic for the NEO delivery positions or any deposits, etc. Those could be even more insurmountable obstacles than the logistical questions.

-Dave
-Dave
 
User avatar
mariner
Posts: 18263
Joined: Fri Nov 23, 2001 7:29 am

RE: Could / Should G4 Consider Merging/acquiring F9?

Wed Apr 03, 2013 5:08 am

Quoting PlanesNTrains (Reply 7):
I've pondered these things before so I'm not saying anything new or original. I think one big impediment would be the $150M (or whatever it is) judgment against F9 by Republic that they have deferred due to acquiring F9. Unless Bedford wants to explain to the shareholders of Republic why he is writing that off, he will need to get at least get that plus change for Frontier, and that doesn't include any Frontier debt assumptions, repaying Republic for the NEO delivery positions or any deposits, etc. Those could be even more insurmountable obstacles than the logistical questions.

I'm glad someone else understands that - especially the $150 million.  

mariner
aeternum nauta
 
PHX787
Posts: 7881
Joined: Thu Mar 15, 2012 7:46 pm

RE: Could / Should G4 Consider Merging/acquiring F9?

Wed Apr 03, 2013 5:32 am

Lets also look at who these airlines attract-
F9 seems to attract many of the general public, including business pax.

G4 is for leisure travelers, and many times travelers who have little in the way of cash.

I don't see this as a good merger either. Two very different business models.
Follow me on twitter: www.twitter.com/phx787
 
PlanesNTrains
Posts: 5494
Joined: Tue Feb 01, 2005 4:19 pm

RE: Could / Should G4 Consider Merging/acquiring F9?

Wed Apr 03, 2013 5:57 am

Quoting mariner (Reply 8):
I'm glad someone else understands that - especially the $150 million.

Well, to be fair, I get that line of thought from you.  

-Dave
-Dave
 
User avatar
mariner
Posts: 18263
Joined: Fri Nov 23, 2001 7:29 am

RE: Could / Should G4 Consider Merging/acquiring F9?

Wed Apr 03, 2013 5:59 am

Quoting PlanesNTrains (Reply 10):
Well, to be fair, I get that line of thought from you.

Fair enough. Good memory, though.  

mariner

[Edited 2013-04-02 23:00:15]
aeternum nauta