hiflyeras
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Re: Is consolidation over in the US ?

Sun Sep 01, 2019 11:32 pm

STT757 wrote:
I think AS buying VS really was strategic, it denied B6 what it really needed. They needed room for growth outside of the Northeast where its brand would work. LAX and SFO could have worked like JFK and BOS.


B6 should thank their lucky stars that they didn't win the bidding war for VX. Can you imagine if they were in the position they're in now in BOS, in the battle for their life at their main hub with DL, while trying to integrate VX? They didn't have the deeper pockets of AS and would probably be looking at bankruptcy today if they'd 'won'.
 
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CarlosSi
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Re: Is consolidation over in the US ?

Sun Sep 01, 2019 11:33 pm

The big 3 and WN will probably stick around and might actually be “too big to fail” at this point. This isn’t necessarily a bad thing if you’re working for one of these companies, if you’re concerned about job security.

JetBlue is the most likely to end up merging. There isn’t as much overlap with AS so this would make the two a pretty decent competitor with the big 3/WN, but it likely won’t happen anytime soon.

I think the ULCCs are all doing pretty well. Why would they need to/want to merge and what would get them approved?
 
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smithbs
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Re: Is consolidation over in the US ?

Sun Sep 01, 2019 11:34 pm

strfyr51 wrote:
Tailwinds wrote:
AA-AS is one I could see passing DOJ if American were firing on all cylinders, but they're not. Perhaps AS as an acquiring carrier, if AA continues to have major problems? The combined carrier would be the largest in LAX, and second largest by a large margin in SFO and SJC. AA isn't even top 5 in SEA, that should avoid anti-trust issues there.

AS take over AA? YGBSM! Really? They can't even merge US and AA!! What kind of "Cluster" would it BE to have AS run AA ?? Come on!!


Mergers can be strange things. Even though I'd have to run to the bathroom and vomit if AS and AA hooked up, I could see it happening if:
a). AA was out of cash
b). AS had cash and was drunk
Mergers have been done where either the junior or senior partner was broke and looking for someone vulnerable and holding cash, but it depends on circumstances and who can be talked into what. Case in point: MDD and Boeing. So unfortunately, it could work where AA has run out of cash and says to AS "hey, buy us" when they really mean "give us your cash" and the AS board was deep enough into a fifth of scotch to think they'd be calling the shots once the check clears.

History has great examples of the end-game of so many airlines. So many ways to die - Ansett style, Pan Am style, NW style...

Unfortunately for a.net, it doesn't really depend on fleet commonality.
 
strfyr51
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Re: Is consolidation over in the US ?

Sun Sep 01, 2019 11:55 pm

STT757 wrote:
Max Q wrote:
It seems like all the significant mergers
are done and I don’t see more on the horizon


A few maybes ?


Hawaiian / Alaska

Alaska / Jet Blue

Frontier / Spirit


And the big one would be United acquiring Jet Blue, this would at one stroke get UA
back into JFK, management has stated several times they would like to be back in that market and what a mistake it was to leave


A merged Jet Blue would also significantly beef up UA’s presence in the southeast US,
the only ‘weak area’ in their unparalleled
route system


Of course the trade offs are, as always
probably too high


With an acquisition of B6 United would completely monopolize the NY market
across EWR, LGA and JFK and regulators
would not allow it to proceed without significant divestitures at all three


And beefing up routes in Florida and the
SE would spark a fierce battle with AA
from their fortress hub in Miami


So I just don’t see that happening


I think UA would be wise to steer clear of B6, I think NK would be a much better acquisition for UA. It gets them the opportunity to build upon NK's large operations in FLL and MCO. It also gives UA some opportunities for focus cities. While it doesn't get them back into Kennedy airport, it does gives them more LGA slots and valuable gates at airports like LAX. Also NK's workforce is smaller and younger than B6.


Sent from my iPad using Tapatalk Pro

I have to ask, Exactly Why would UA need to steer clear of B6? Their Terminal and slots at JFK would really Help BOTH carriers. B6 could be decentralized to cover not only JFK bur EWR. IAD, ORD. IAH, DEN and FLL for a "Southern Corner" United doesn't already Have. United could establish a *A hub back at JFK and route 767's 777's and 787's in and out all over the world, along with EWR and IAD, The only real problem? would be ramping up EWR to support JFK initially because with operations comes People and Equipment to cover it. And the JBLU guys could cover all the Airbus work, But How much of the larger airplanes would they be able to cover initially? JFK has a LOT of facilities though we'd need something like Hangar 19 for all the possible work they'd be doing. It's actually a good Idea now that I think about it. So? Why exactly NOT in your opinion??
 
Cointrin330
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 12:02 am

Super80Fan wrote:
Not by a long shot. Of the major airlines, JetBlue is next on the chopping block. Don’t know who would take them over though, could be United, Alaska, Frontier, or Spirit.

Also many of the regionals I don’t think will be around in the future. Expect mergers/consolidation/shutdowns of Air Wisconsin, Mesa, CommutAir, and TSH Holding airlines (Compass, GoJet, and Trans States).


Agree, B6 is very much up for grabs, or will be. I think if any of the Big 3 make the move, it will be AA. It would have a lot less to give up across the NY Airports than UA and in South Florida, it would reduce B6's footprint at FLL in favor of MIA. Not much else overlap, really and plenty of fleet commonality across the Airbus fleet. The E190's are another story.
 
Busyboy2
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 12:25 am

joeblow10 wrote:
SY and B6 are definitely next on the chopping block. Quite frankly - how nobody has bought SY to this point given the shortage of MAXs is rather amazing

Sun Country doesn't have many assets. Their jets are leased.
 
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NameOmitted
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 12:29 am

Busyboy2 wrote:
joeblow10 wrote:
SY and B6 are definitely next on the chopping block. Quite frankly - how nobody has bought SY to this point given the shortage of MAXs is rather amazing

Sun Country doesn't have many assets. Their jets are leased.

It would be fascinating to see the Hubert Humphrey terminal become a Southwest mini-hub.
 
flyby519
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 12:42 am

Bluewho wrote:
I could see JetBlue go for spirit or even spirit go for JetBlue. That would be interesting.


^^^^This right here. Instant FLL fortress hub
 
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SierraPacific
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 1:05 am

I wouldn't be surprised to see the Big 4 we have today, a merged spirit and frontier, and Hawaiian being the sole airlines left in America.

I really doubt that Alaska and Jetblue are going to exist in 10-20 years
 
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NameOmitted
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 1:08 am

SierraPacific wrote:
I really doubt that Alaska and Jetblue are going to exist in 10-20 years


Who do you see taking over flying within the state if Alaska?
 
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SierraPacific
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 1:15 am

NameOmitted wrote:
SierraPacific wrote:
I really doubt that Alaska and Jetblue are going to exist in 10-20 years


Who do you see taking over flying within the state if Alaska?


That's the thing, I am not sure how a merger would work with that. I would be surprised if Alaska has a larger presence in the Lower 48 than they do now in 10 years.

HA and AS are in a unique position when it comes to their respective states but AS seems more vulnerable since the majority of their operations are outside of Alaska.
 
joeblow10
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 1:42 am

Busyboy2 wrote:
joeblow10 wrote:
SY and B6 are definitely next on the chopping block. Quite frankly - how nobody has bought SY to this point given the shortage of MAXs is rather amazing

Sun Country doesn't have many assets. Their jets are leased.


But that’s just it... you could almost argue that’s even more perfect - the buyer could take on the remaining leases and the few owned jets in the interim during the MAX crisis, and then be done with it. Seems perfect for WN
 
Tailwinds
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 2:02 am

strfyr51 wrote:
Tailwinds wrote:
AA-AS is one I could see passing DOJ if American were firing on all cylinders, but they're not. Perhaps AS as an acquiring carrier, if AA continues to have major problems? The combined carrier would be the largest in LAX, and second largest by a large margin in SFO and SJC. AA isn't even top 5 in SEA, that should avoid anti-trust issues there.

AS take over AA? YGBSM! Really? They can't even merge US and AA!! What kind of "Cluster" would it BE to have AS run AA ?? Come on!!



YGBSM? AA was, in effect, bought by America West. Stranger things have happened.
 
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xms3200
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 2:16 am

Must be a really boring labor day weekend so ......"Let's speculate about airline mergers" ....see how many "suckers" chime in
 
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TWA772LR
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 4:28 am

F9/NK and AS/B6 make the most sense.

F9/NK for having the same business model and minimal overlap.

AS/B6 obviously have cohesive networks to make a solid combined carrier. Maybe even throw SY to have a midcon hub in MSP. A combined AS/B6/SY will have enough critical mass to establish their own TPAC/TATL network to major cities like London and Tokyo organically.

As far as the regionals, the current trend seems to be reshuffling of contracts and letting the individual regional die off while larger regionals like Skywest, Envoy and Expressjet absorb their flying and aircraft.
When wasn't America great?


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Adipocere
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 1:47 pm

A lot of the discussion has swiveled around the regionals or one of the smaller airlines. But we did see an approval of Sprint and T-Mobile in 3-4 player market, so why not a future merger amongst any pairing of AA, DL, WN and UA themselves to form the mother of all airlines??
 
bob75013
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 3:05 pm

Adipocere wrote:
A lot of the discussion has swiveled around the regionals or one of the smaller airlines. But we did see an approval of Sprint and T-Mobile in 3-4 player market, so why not a future merger amongst any pairing of AA, DL, WN and UA themselves to form the mother of all airlines??



possible in the event of threat of BKduring a future recession. However, Maybe AA, DL, and UA learned from the past. WN didn't need to learn how to run it's business in bad times.
 
Austin787
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 4:08 pm

At this time, I don't think the DoJ would approve mergers involving AA, UA, DL, or WN. However, in the next recession which brings potential bankruptcy filings I think all bets are off. We may see consolidation among the ULCC: Allegiant, Spirit, and Frontier. Which could create a nationwide ULCC.

I agree we likely will see consolidation in the regionals. As the US3 have consolidated the past decade, they will need to address how to manage their regional partners in the future.
 
rj1385
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 4:31 pm

I still believe that AA pulling back from the North East is strategic. If jetBlue is in play I do not see Doug Parker sitting back and watching. AA buys B6 selling off 30 slots to United if they want in to JFK along with terminal space in T5. Maybe United gives some at ORD (gates). 10% to 20% of flying at BOS would be eliminated with overlap easily. JFK/BOS to LAX/SFO would also cut frequency with JFK/BOS to DCA. Some slots given up at DCA and Florida would be adjusted over time. New A220s on order and old E190s could easily be drawn down faster.
 
afcjets
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 4:42 pm

Antarius wrote:
DWC wrote:
When the US abolished the Sherman Act, the US ceased to be a free market economy. That is not an opinion, it's a definition of economics : the US3 oligopoly is influencing fares, the central condition of market economy, "atomicity of actors", is no more. Big players are influencing prices.

Case in point : I was just looking at direct international flights to the US for the next months. Without going into my O/D, someone please explain to me why does ITA Matrix / Googleflights list me the same fares for AA, DL or UA, not to mention that connections differ greatly ( DFW, ATL, IAD, JFK ). Unless Google throws in some lambda correction, if that is not price collusion, I don't know what is.

Just to say that in a sound economic environment, the mergers should not only be over, but the US3 should be investigated & demerged. Same applies to LH & LATAM, their respective market shares control their local market, which is against the law.


That isn't a case in point at all. All that it means is that one airline is setting a price and others are matching it. Then airline 2 may drop the price, which leads to the others following. With instant price availability online, every airline knows what every other airline is selling their tickets for.

Big players always have influenced prices. if best buy puts a TV on sale, others tend to match or beat it. None of this amounts to collusion. Collusion requires the parties to knowingly and willingly price set. Correlation != Causation.


Airlines have known what other airlines are charging long before they had websites, via ATPCO (airline tariff publishing company) and their CRS (central reservations systems).

Back in the early 1990s, DOJ did in fact investigate collusion but not because they all charged the same price. Where they found the airlines guilty of collusion was with First Ticket Date. Airlines could still have First Travel Date, Last Travel Date, Complete Travel by Dates, and Last Ticket Date when they published a fare or a sale, but not could no longer have First Ticket Date. First Ticket Date allowed airlines to agree on a price before selling anything and exposing themself to risk. DOJ ruled even if airlines wants to retaliate against competitors by publishing ridiculoulsly low fares in a competitors hub to get them to raise prices in theirs, they totally can, but they have to actually offer it for sale (not just a first ticket date where they can cancel the fare once the other airline does what they want them to do and before anyone can purchase it), and they believe that is ultimately good for consumers. Many people often refer to these sometimes extremely low fares that disappear quickly as mistakes, but they are in fact the most intentional fares airlines publish.
 
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JBo
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 4:49 pm

alasizon wrote:
DL717 wrote:
bigb wrote:
The next round of consolidations are going to be at the regional level. There are a abundance of regional carriers whose contracts are coming up for renewal. As those contracts come up, they will either, be renewed, or not be renewed which will lead to said regional losing its flying. As a regional lose it flying, it will be force to shrink, shutdown, or merge with someone, or figure out a way to gain replacement flying. See Compass and GoJet for this example.


This. The big winner will be SkyWest unless the economy wrecks Alaska Airlines, they are doing about 15% of Alaska’s flying and that could hurt, but still leave them the biggest player. In alternate, they could absorb Horizon if Alaska is hurting and needs some cash which would wind up being a bonus. SkyWest and Republic will be the last man standing so to speak. SkyWest gobbling up the UA/DL regionals and Republic the AA regionals.


First off, the notion that the wholly owneds would disappear is crazy. Their flying is done 100% at cost and the internal synergies that have occurred already with those carriers are highly unlikely to ever be able to be achieved with an outside party.

Yes AX, G7 and CP are likely to go the way of the dodo and YV's flying will likely be absorbed by someone else (I believe it will be OO for AA, YX for UA) but with their own frames. That'll still leave you with OO, YX, OH, PT, MQ, EV, QX & 9E moving forward which is a pretty good setup that will still keep the market competitive but allow the carriers to better stand on their own.


I agree 100% that we'll see some consolidation/reduction among the regional operators in the coming years.

DL has already established the precedent by phasing out their operations with GoJet and Compass, leaving SkyWest, Republic, and Endeavor as the remaining Delta Connection operators.

For AA, they have three wholly-owned regionals with Envoy, Piedmont, and PSA. I wouldn't be surprised if AA eventually consolidates them down to two or even one to eliminate the in-house redundancy/overhead (as US did when they phased out Allegheny). For external contacts, Compass is easily the weakest link with the smallest contract. SkyWest and Republic aren't going anywhere long term. Mesa is a bit of a wild card since they still have a sizeable fleet on contact with AA, but my long term prediction for AA is that they'll eventually be down two 3-4 Eagle contracts: a consolidated in-house subsidiary (Envoy/PSA/Piedmont), SkyWest, Republic, and maybe Mesa.

UA has ExpressJet and SkyWest as their two largest partners; they aren't going anywhere. On the other end of the spectrum, CommutAir is easily the weakest link. They don't own any of the aircraft they're operating for UA — the E145s are either directly owned by UA or by Wells Fargo (and whether UA or C5 hold those leases, I don't know, but I'm guessing UA). UA could easily consolidate C5's operations into either ExpressJet or Trans States. Air Wisconsin is the second-weakest link in that they also exclusively provide 50-seat lift, but the key difference is that ZW directly owns their CRJs. So long as there is still a need/demand for 50-seat lift within the network, ZW is likely to stick around and fill that niche, even if the larger partners phase out their CR2s and 145s. I also wouldn't rule out the chance for ZW to get larger aircraft.

ZW's future also depends on what I look at as the "gray areas" that are Mesa, GoJet, and Trans States. TSA operates fewer aircraft for UA than ZW, so that might put them on the chopping block sooner than ZW. However, TSA's sister airline GoJet will be receiving CR5s from UA to expand their contract. Mesa also still maintains a fairly sizeable operation for UA, larger than their fleet for AA.

So, making a prediction for the future of the UAX operation is a bit more challenging, but in the near-ish term I think CommutAir and Trans States are most likely to be phased out, with their E145 operations either being folded into EV or upgraded to larger aircraft from other carriers depending on the route.

Longer term, I can see UA making decisions on their operations with Mesa, GoJet, Repubic, and Air Wisconsin. If they wanted to phase out Mesa, they could fold the E175s into either YX or EV, and the CR7s into OO. Likewise, GoJet's operations could get folded into OO.

Air Wisconsin is harder to predict. I think as long as UA needs 50-seat lift, they'll be around, but what I cannot predict is whether or not ZW will get the chance to expand their operation and fly larger aircraft for UA or not.

SkyWest and ExpressJet aren't going anywhere, and I doubt Republic is going to leave the UA operation anytime soon, either.

-----

Oh, and as far as speculation on the mainline operators: I honestly wouldn't be surprised if AS, HA, and B6 were to form some kind of IAG-like ownership alliance where they all share the same corporate parent and financial resources, but maintain separate operations under the strength of their individual brands.
I'd take the awe of understanding over the awe of ignorance any day.
 
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ODwyerPW
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 4:55 pm

xms3200 wrote:
Must be a really boring labor day weekend so ......"Let's speculate about airline mergers" ....see how many "suckers" chime in



hmmm, baited you and I. we both wasted a bit of our labor day contributing to this thread.... lol!
learning never stops.
 
TYWoolman
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 5:06 pm

The major airlines are segmenting their product offerings to compete for the simple, cost-effective air traveler. But if this doesn't pan out as the majors have hoped, and given that most legacies attempted LLC's of their own signaling a desire to remain competitive and an acknowledgment of the low-cost threat, I think an opportunity may become ripe for each major to team-up with a regional low-cost carrier, which would then become a separate subsidiary under each legacy.

Just speculating here. Can't deny that the industry is quite dynamic. The possibility is there.
 
jumbojet
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 5:13 pm

I also think that the name JetBlue wont be around for very much longer. I think the likeliest of hookups is with Alaska, makes the most sense, not a whole lot of overlapping going on. Alaska is more synonymous with a better run, smoother operation so it keeps the Alaska name. Nothing else really works, it really cant be a dominant east coast airline with the exception of maybe...… AA.
 
DWC
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 8:26 pm

Antarius wrote:
All that it means is that one airline is setting a price and others are matching it. Then airline 2 may drop the price, which leads to the others following. With instant price availability online, every airline knows what every other airline is selling their tickets for.

So if I get your point right : there is no need to collude because as we have perfect & symmetric information on the Internet airlines match fares if they so wish, right ?

But since it is automated they are always matching each other and from what I observe, these price matching tend to be often on the high side relative to where there is international competition.
So, if they don't meet physically but get to similar results to each other, how is this any different to the consumer ?

Not to mention that with the unbundling of fares one is actually ending up paying more if one wishes the same level of service ?
At this rate, you will soon be charged for water, reclining permission, perhaps even for smiles, bathroom access & cover charge.
Seen from a decade ago, and from anearly ll other parts of the civilized world, having or pay for seats, preferred boarding, luggage, limited carry-ons ( I used to take two big carry-ons with me, was totally allowed ), no show fines, crappy food & not free, pay for spirits, etc, really look barbarian.
These people are very creative & on the cheapo side.
Theory has it that consumer opinion is the one force that can counter such asinine policies. Well I am speaking out loud & so should every flying citizen.
Last edited by DWC on Mon Sep 02, 2019 8:40 pm, edited 1 time in total.
 
KlimaBXsst
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 8:38 pm

As to the consolidation question.

Yes the airline industry will always have consolidations because it is a growing and thriving dynamic industry.
Aesthetically the A 340 got it right!
 
DWC
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 8:44 pm

KlimaBXsst wrote:
Yes the airline industry will always have consolidations because it is a growing and thriving dynamic industry.

That is an economic fallacy.
If the market is indeed growing, then there is room for organic growth thriving in healthy competition.

In fact that is exactly was is happening in China & south-East Asia. That also happens in the US, though less so as it is a mature market with very high barriers : Virgin America (now gone alas), JetBlue, Moxy. Also in a growing market you can have new entrants : case in point of all LCCs, specially in Europe, but also the ME3 - nowhere up on the radar really before the turn of the century.
 
KlimaBXsst
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 9:03 pm

As to consolidation in general.

We are down to so few “non regional” players now in the US, that consolidation will likely take the shape of particular operational divestitures, and rebranding of others.

Example would be for the still very tarnished Spirit to be rebranded as JetBlue as United takes JetBlues JFK international routes, in a divestiture. Delta might get JetBlues BOS hub, in an outright purchase divestiture,

as a fully financially unencumbered and strengthened and RICH JetBlue name and Corporation remains but merged with Spirit and utilizing a refined JetBlue Spirit ULCC operating business model and ULCC management.
Aesthetically the A 340 got it right!
 
KlimaBXsst
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 9:12 pm

Side bar the US 3 may see one very strong ULCC as less hassle to deal with than an:

- increasingly desperate number 6,
- an uncaged WN gorilla, and
- 4 pesky but not huge ULCC’s

A very strong ULCC as a chess checkmate as such to WN, and yield and planning tampering ULCCs.
Aesthetically the A 340 got it right!
 
Antarius
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 9:12 pm

DWC wrote:
Antarius wrote:
All that it means is that one airline is setting a price and others are matching it. Then airline 2 may drop the price, which leads to the others following. With instant price availability online, every airline knows what every other airline is selling their tickets for.

So if I get your point right : there is no need to collude because as we have perfect & symmetric information on the Internet airlines match fares if they so wish, right ?

But since it is automated they are always matching each other and from what I observe, these price matching tend to be often on the high side relative to where there is international competition.
So, if they don't meet physically but get to similar results to each other, how is this any different to the consumer ?

Not to mention that with the unbundling of fares one is actually ending up paying more if one wishes the same level of service ?
At this rate, you will soon be charged for water, reclining permission, perhaps even for smiles, bathroom access & cover charge.
Seen from a decade ago, and from anearly ll other parts of the civilized world, having or pay for seats, preferred boarding, luggage, limited carry-ons ( I used to take two big carry-ons with me, was totally allowed ), no show fines, crappy food & not free, pay for spirits, etc, really look barbarian.
These people are very creative & on the cheapo side.
Theory has it that consumer opinion is the one force that can counter such asinine policies. Well I am speaking out loud & so should every flying citizen.


My point is that you can have the same fares without collusion. Collusion would be, instead of fare matching, multiple parties set fares. Big big big difference, especially since people rarely collude to set prices lower than the market.

All the rest is histrionics. Flying is cheaper than it has ever been and more accessible. We can easily go back to the regulated market of decades ago, but that's a mighty elitist position for one to take.
2019: SIN HKG NRT DFW IAH HOU CLT LGA JFK SFO SJC EWR SNA EYW MIA BOG LAX ORD DTW OAK PVG BOS DCA IAD ATL LAS BIS CUN PHX OAK SYD CVG PHL MAD ORY CDG SLC SJU BQN MHT YYZ STS BIS DOH BLR KTM MFM MEX MSY BWI DEN
 
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BMWdrvr75
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 9:26 pm

I’m just wondering why everyone thinks Southwest is out of the realm of possibility for merging/purchasing JetBlue there’s been a lot of speculation of a Southwest and Hawaiian marriage at Southwest in recent months. With Max debacle and Southwest not growing for the last year, Canceling upgrade classes, canceling the flight attendant new hire classes, and having 84 Max’s parked in Victorville maybe the company is not completely married to a 737 anymore and is looking for a little bit diversity... This would open JFK slots maybe look at doing some trans Atlantic flying as well....Just a question please do not beat me up....
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N649DL
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Re: Is consolidation over in the US ?

Mon Sep 02, 2019 11:04 pm

strfyr51 wrote:
STT757 wrote:
Max Q wrote:
It seems like all the significant mergers
are done and I don’t see more on the horizon


A few maybes ?


Hawaiian / Alaska

Alaska / Jet Blue

Frontier / Spirit


And the big one would be United acquiring Jet Blue, this would at one stroke get UA
back into JFK, management has stated several times they would like to be back in that market and what a mistake it was to leave


A merged Jet Blue would also significantly beef up UA’s presence in the southeast US,
the only ‘weak area’ in their unparalleled
route system


Of course the trade offs are, as always
probably too high


With an acquisition of B6 United would completely monopolize the NY market
across EWR, LGA and JFK and regulators
would not allow it to proceed without significant divestitures at all three


And beefing up routes in Florida and the
SE would spark a fierce battle with AA
from their fortress hub in Miami


So I just don’t see that happening


I think UA would be wise to steer clear of B6, I think NK would be a much better acquisition for UA. It gets them the opportunity to build upon NK's large operations in FLL and MCO. It also gives UA some opportunities for focus cities. While it doesn't get them back into Kennedy airport, it does gives them more LGA slots and valuable gates at airports like LAX. Also NK's workforce is smaller and younger than B6.


Sent from my iPad using Tapatalk Pro

I have to ask, Exactly Why would UA need to steer clear of B6? Their Terminal and slots at JFK would really Help BOTH carriers. B6 could be decentralized to cover not only JFK bur EWR. IAD, ORD. IAH, DEN and FLL for a "Southern Corner" United doesn't already Have. United could establish a *A hub back at JFK and route 767's 777's and 787's in and out all over the world, along with EWR and IAD, The only real problem? would be ramping up EWR to support JFK initially because with operations comes People and Equipment to cover it. And the JBLU guys could cover all the Airbus work, But How much of the larger airplanes would they be able to cover initially? JFK has a LOT of facilities though we'd need something like Hangar 19 for all the possible work they'd be doing. It's actually a good Idea now that I think about it. So? Why exactly NOT in your opinion??


IMHO, UA/B6 would be amazing as they could provide free DTV throughout the US (both carriers have it) but also re-enter JFK, redistribute EWR for more competition, add MCO/FLL as true southeast hubs, incorporate Mint to the UA EWR/BOS-LAX/SFO profile plus add in JFK to re-carry the UA name (which on UA is now a muddled product). Plus if they were to incorporate B6's color scheme in combination with UA's revised Globe scheme would really sync in nicely. If UA/B6 merge this would end UA's single class RJ problem overnight. It's not a horrible scenario when you really think about it.
 
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aemoreira1981
Posts: 2883
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Re: Is consolidation over in the US ?

Tue Sep 03, 2019 1:23 am

JBo wrote:
alasizon wrote:
DL717 wrote:

This. The big winner will be SkyWest unless the economy wrecks Alaska Airlines, they are doing about 15% of Alaska’s flying and that could hurt, but still leave them the biggest player. In alternate, they could absorb Horizon if Alaska is hurting and needs some cash which would wind up being a bonus. SkyWest and Republic will be the last man standing so to speak. SkyWest gobbling up the UA/DL regionals and Republic the AA regionals.


First off, the notion that the wholly owneds would disappear is crazy. Their flying is done 100% at cost and the internal synergies that have occurred already with those carriers are highly unlikely to ever be able to be achieved with an outside party.

Yes AX, G7 and CP are likely to go the way of the dodo and YV's flying will likely be absorbed by someone else (I believe it will be OO for AA, YX for UA) but with their own frames. That'll still leave you with OO, YX, OH, PT, MQ, EV, QX & 9E moving forward which is a pretty good setup that will still keep the market competitive but allow the carriers to better stand on their own.


I agree 100% that we'll see some consolidation/reduction among the regional operators in the coming years.

DL has already established the precedent by phasing out their operations with GoJet and Compass, leaving SkyWest, Republic, and Endeavor as the remaining Delta Connection operators.

For AA, they have three wholly-owned regionals with Envoy, Piedmont, and PSA. I wouldn't be surprised if AA eventually consolidates them down to two or even one to eliminate the in-house redundancy/overhead (as US did when they phased out Allegheny). For external contacts, Compass is easily the weakest link with the smallest contract. SkyWest and Republic aren't going anywhere long term. Mesa is a bit of a wild card since they still have a sizeable fleet on contact with AA, but my long term prediction for AA is that they'll eventually be down two 3-4 Eagle contracts: a consolidated in-house subsidiary (Envoy/PSA/Piedmont), SkyWest, Republic, and maybe Mesa.

UA has ExpressJet and SkyWest as their two largest partners; they aren't going anywhere. On the other end of the spectrum, CommutAir is easily the weakest link. They don't own any of the aircraft they're operating for UA — the E145s are either directly owned by UA or by Wells Fargo (and whether UA or C5 hold those leases, I don't know, but I'm guessing UA). UA could easily consolidate C5's operations into either ExpressJet or Trans States. Air Wisconsin is the second-weakest link in that they also exclusively provide 50-seat lift, but the key difference is that ZW directly owns their CRJs. So long as there is still a need/demand for 50-seat lift within the network, ZW is likely to stick around and fill that niche, even if the larger partners phase out their CR2s and 145s. I also wouldn't rule out the chance for ZW to get larger aircraft.

ZW's future also depends on what I look at as the "gray areas" that are Mesa, GoJet, and Trans States. TSA operates fewer aircraft for UA than ZW, so that might put them on the chopping block sooner than ZW. However, TSA's sister airline GoJet will be receiving CR5s from UA to expand their contract. Mesa also still maintains a fairly sizeable operation for UA, larger than their fleet for AA.

So, making a prediction for the future of the UAX operation is a bit more challenging, but in the near-ish term I think CommutAir and Trans States are most likely to be phased out, with their E145 operations either being folded into EV or upgraded to larger aircraft from other carriers depending on the route.

Longer term, I can see UA making decisions on their operations with Mesa, GoJet, Repubic, and Air Wisconsin. If they wanted to phase out Mesa, they could fold the E175s into either YX or EV, and the CR7s into OO. Likewise, GoJet's operations could get folded into OO.

Air Wisconsin is harder to predict. I think as long as UA needs 50-seat lift, they'll be around, but what I cannot predict is whether or not ZW will get the chance to expand their operation and fly larger aircraft for UA or not.

SkyWest and ExpressJet aren't going anywhere, and I doubt Republic is going to leave the UA operation anytime soon, either.

-----

Oh, and as far as speculation on the mainline operators: I honestly wouldn't be surprised if AS, HA, and B6 were to form some kind of IAG-like ownership alliance where they all share the same corporate parent and financial resources, but maintain separate operations under the strength of their individual brands.


At UA, I actually see CommutAir surviving if they're nonunion...with CommutAir being given larger jets (they and ExpressJet likely share ownership, but ExpressJet is union) with ExpressJet going away and its assets assumed by CommutAir (United owns 40 percent of CommutAir with Champlain Enterprises owning the remainder, and the ownership group of ExpressJet share the same executives as CommutAir). Republic (stakes held by each of the US3) and SkyWest are the definite stays. I see GoJet surviving because they own (or are the leaseholder) on the the planes in the UA operation.

I see someone buying GoJet and Trans State, with Compass as a dead airline walking. A real wild card though could be JetBlue, to establish a true feeder operation into JFK, BOS, and FLL (especially at FLL with lots of intra-Florida flying), and to also utilize slots at LGB better. Would they buy GoJet or Trans State?

On a mainline scale, valuing JetBlue could be tricky, as they own (or are directly financing) more than 90 percent of their Airbus fleet (119 of their 130 A320s and 61 of their 63 A321ceos are owned)...but those planes are also heavily used (except for the non-Mint fleet) and I expect JetBlue to start scrapping A320s before their next D-check, especially in the 500-series fleet numbers, as they would be closing in on 90,000 hours. (The JetBlue business model is unlike that of any other mainline non-ULCC except for maybe Southwest, with narrow-body planes in the air for an average of nearly 12 hours a day.) While heavy usage, the value of the aircraft could really be more than JetBlue's market cap...and then the value of JetBlue's JFK slots are also a lot of money.
 
flyby519
Posts: 1430
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Re: Is consolidation over in the US ?

Tue Sep 03, 2019 1:57 am

BMWdrvr75 wrote:
I’m just wondering why everyone thinks Southwest is out of the realm of possibility for merging/purchasing JetBlue there’s been a lot of speculation of a Southwest and Hawaiian marriage at Southwest in recent months. With Max debacle and Southwest not growing for the last year, Canceling upgrade classes, canceling the flight attendant new hire classes, and having 84 Max’s parked in Victorville maybe the company is not completely married to a 737 anymore and is looking for a little bit diversity... This would open JFK slots maybe look at doing some trans Atlantic flying as well....Just a question please do not beat me up....


It would be a gigantic change in strategy and business model for WN. Multi-class a/c, transcons, redeye flying, 190s/220s, etc. I think it would be a bad fit in terms of business models, but do think you have some good points about WN's reliance on the 737. Simplification has been a cost saving benefit for them for decades, but putting all your eggs in 1 basket isn't always a great choice. I'm not sure if it is enough of a loss to make the jump into 2 fleet types. Network-wise it would be nice for WN to have better penetration in the NE.
 
Lapplander800
Posts: 94
Joined: Sat Jun 30, 2018 4:56 pm

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 3:33 am

DL717 wrote:
WN is still low cost. The fly much longer routes and that has a cost. Their short haul is still ridiculously cheap.


I have flown WN extensively, mainly intra-CA (short haul) but also around the country. Enough flying for some years of companion passes. Cheap is not what comes to my mind with WN. In fact it was normally cheaper to fly legacies than WN. $250 for OAK-BUR, $350 for OAK-LAS ain't cheap for one ways booked within the week.

What WN has is the non pretentious ease of doing buisness with them which you need to jump through hoops for with the legacies. That is their product and that is why I have charged their airfares to my expense account more than any other airline.
 
User avatar
william
Posts: 3152
Joined: Thu Jun 10, 1999 1:31 pm

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 4:04 am

DL717 wrote:
Blerg wrote:
What's this obsession with mergers and consolidation? It's as if some people on here won't be happy until the US is left with a single carrier.


Consolidation is inevitable and cuts out waste. There will always be competition, but there is such a thing as too much competition which wastes resources.


Bovine Scatter, the same capacity discipline envogue now could have been applied with 7 majors. AA’s Former CEO Crandall was preaching capacity control over market share since the early nineties.
 
luckyone
Posts: 2814
Joined: Thu Aug 21, 2008 1:50 pm

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 4:36 am

My two cents:

- B6’s operations in Florida do not constitute a SE operation or hub, and Florida really isn’t positioned for SE hubbing. Look no further than where those flights are going, which is mostly to the Northeast. There’s very little SE flying, and little potential to do so.

- Being a bit whimsical here, but what’s stopping Delta from buying AS...and just divesting it’s former domestic ops from SEA and likely some at LAX. Put another way, Delta buys Alaska, and divests its pre-merger self from SEA/LAX (minus international ops).
 
UA772IAD
Posts: 1307
Joined: Sat Jul 10, 2004 7:43 am

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 5:49 am

SCQ83 wrote:
Gulfstream500 wrote:
Consolidation is not close to over. Actually, I'm expecting a ton of it in the next recession.

My bets:

Sun country: Bought by Southwest (or maybe Alaska if they don't buy B6), fleet is quite compatable.
Allegiant: Bought by Spirit (Not Frontier, why would they buy a fleet of aircraft that they are disposing, the A319).
JetBlue/Alaska/Hawaiian: I think they'll merge in a similar way as UA and CO. A B6, AS, and HA merger would make the fifth largest US airline, almost as big as United mainline by fleet size. Although, I believe that only two of the three will merge.


I agree with your analysis the most.

If there is a recession, IMO JetBlue and Alaska will suffer a lot (when compared with, let's say, Southwest). They lack geographical diversification and are focused in "millennial" regions that are economically overheated (California/West Coast for Alaska and Northeast/Florida for JetBlue). If there is another tech-bubble crash (just take a look at the latest IPOs and valuations of some tech companies) or real estate crash (same), places like the Bay Area will suffer a lot when all that fake wealth vanishes.


If there is a recession, all carriers will suffer, including established legacy carriers that call these major urban centers hubs. And it's not just the coastal regions that will suffer, but inland cities that have traditionally been home to manufacturing and distribution hubs will also hurt from a recession - particularly if it it's induced by a trade war; which will affect virtually every carrier, including WN.

I'm curious as to what these millennial regions of fake wealth are that you speak of?
 
UA772IAD
Posts: 1307
Joined: Sat Jul 10, 2004 7:43 am

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 6:03 am

SierraPacific wrote:
NameOmitted wrote:
SierraPacific wrote:
I really doubt that Alaska and Jetblue are going to exist in 10-20 years


Who do you see taking over flying within the state if Alaska?


That's the thing, I am not sure how a merger would work with that. I would be surprised if Alaska has a larger presence in the Lower 48 than they do now in 10 years.

HA and AS are in a unique position when it comes to their respective states but AS seems more vulnerable since the majority of their operations are outside of Alaska.


It's really not much of an obstacle is it?

1. The incumbent carrier would offer intra-state flying if they deemed it worthwhile, or commission one of their regional partners to do the flying on their behalf
2. A local airline would fill in the lost service in the place of AS (or HI). Air service in Canada's northern communities are an example of this.
 
TTailedTiger
Posts: 1428
Joined: Sun Aug 26, 2018 5:19 am

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 6:20 am

DL717 wrote:
Blerg wrote:
What's this obsession with mergers and consolidation? It's as if some people on here won't be happy until the US is left with a single carrier.


Consolidation is inevitable and cuts out waste. There will always be competition, but there is such a thing as too much competition which wastes resources.


Not with consistently high load factors. I have never been on ULCC's like Spirit or Allegiant and likely never will. But I understand there is a market for it, I'm just not part of it. Taking out the supply will lead to higher demand and higher prices. Not good for the consumer no matter which level of service you prefer. And as aviation enthusiasts, why would we want to lose even more variety?
 
acentauri
Posts: 255
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Re: Is consolidation over in the US ?

Tue Sep 03, 2019 6:24 am

no
 
TTailedTiger
Posts: 1428
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Re: Is consolidation over in the US ?

Tue Sep 03, 2019 6:29 am

DWC wrote:
When the US abolished the Sherman Act, the US ceased to be a free market economy. That is not an opinion, it's a definition of economics : the US3 oligopoly is influencing fares, the central condition of market economy, "atomicity of actors", is no more. Big players are influencing prices.

Case in point : I was just looking at direct international flights to the US for the next months. Without going into my O/D, someone please explain to me why does ITA Matrix / Googleflights list me the same fares for AA, DL or UA, not to mention that connections differ greatly ( DFW, ATL, IAD, JFK ). Unless Google throws in some lambda correction, if that is not price collusion, I don't know what is.

Just to say that in a sound economic environment, the mergers should not only be over, but the US3 should be investigated & demerged. Same applies to LH & LATAM, their respective market shares control their local market, which is against the law.


I agree. These mergers were a perversion of a free market. No mergers should be allowed. The weak will die and the strong will live. The surviving airlines would be free to purchase any valuable assets from the failed airlines during liquidation. Shareholder and employee value are no consideration with the cold equations of capitalism. I care about the best product at the best price. Anything else be damned.
 
WkndWanderer
Posts: 270
Joined: Sat Oct 21, 2017 6:36 pm

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 7:04 am

UA772IAD wrote:
SCQ83 wrote:
Gulfstream500 wrote:
Consolidation is not close to over. Actually, I'm expecting a ton of it in the next recession.

My bets:

Sun country: Bought by Southwest (or maybe Alaska if they don't buy B6), fleet is quite compatable.
Allegiant: Bought by Spirit (Not Frontier, why would they buy a fleet of aircraft that they are disposing, the A319).
JetBlue/Alaska/Hawaiian: I think they'll merge in a similar way as UA and CO. A B6, AS, and HA merger would make the fifth largest US airline, almost as big as United mainline by fleet size. Although, I believe that only two of the three will merge.


I agree with your analysis the most.

If there is a recession, IMO JetBlue and Alaska will suffer a lot (when compared with, let's say, Southwest). They lack geographical diversification and are focused in "millennial" regions that are economically overheated (California/West Coast for Alaska and Northeast/Florida for JetBlue). If there is another tech-bubble crash (just take a look at the latest IPOs and valuations of some tech companies) or real estate crash (same), places like the Bay Area will suffer a lot when all that fake wealth vanishes.


If there is a recession, all carriers will suffer, including established legacy carriers that call these major urban centers hubs. And it's not just the coastal regions that will suffer, but inland cities that have traditionally been home to manufacturing and distribution hubs will also hurt from a recession - particularly if it it's induced by a trade war; which will affect virtually every carrier, including WN.

I'm curious as to what these millennial regions of fake wealth are that you speak of?


If there’s a recession, I’d probably be more worried about AA and it’s $34 billion of debt.
 
SCQ83
Posts: 5387
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Re: Is consolidation over in the US ?

Tue Sep 03, 2019 11:58 am

UA772IAD wrote:
If there is a recession, all carriers will suffer, including established legacy carriers that call these major urban centers hubs. And it's not just the coastal regions that will suffer, but inland cities that have traditionally been home to manufacturing and distribution hubs will also hurt from a recession - particularly if it it's induced by a trade war; which will affect virtually every carrier, including WN.

I'm curious as to what these millennial regions of fake wealth are that you speak of?


I mean tech bubble coupled to real estate bubble. The Bay Area is the best example of this. Companies like Uber or WeWork have still to prove they can survive long-term and they are not only smoke and mirrors. The wealth created by the tech bubble in stocks has fuelled the real estate bubble in the Bay Area. If the first crashes, the second will come along. Those are the regions / airports that have grown the most in the last few years.

Alaska and (specially) JetBlue (and Virgin America back in the day) have a certain "snobbish" attitude to destinations. They are focused on those kind of international / "millennial" urban areas somehow forgetting about middle America. The US3 and WN are more diversified geographically, covering more or less the whole country.
 
frmrCapCadet
Posts: 3132
Joined: Thu May 29, 2008 8:24 pm

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 1:54 pm

Or the ULCCs could be allowed to cooperate enough so that there was a ULCC system throughout the US, likewise Alaska and JetBlue. Interlining, code sharing, but still competing in the largest markets.
Buffet: the airline business...has eaten up capital...like..no other (business)
 
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STT757
Posts: 13872
Joined: Tue Mar 28, 2000 1:14 am

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 2:27 pm

strfyr51 wrote:
STT757 wrote:
Max Q wrote:
It seems like all the significant mergers
are done and I don’t see more on the horizon


A few maybes ?


Hawaiian / Alaska

Alaska / Jet Blue

Frontier / Spirit


And the big one would be United acquiring Jet Blue, this would at one stroke get UA
back into JFK, management has stated several times they would like to be back in that market and what a mistake it was to leave


A merged Jet Blue would also significantly beef up UA’s presence in the southeast US,
the only ‘weak area’ in their unparalleled
route system


Of course the trade offs are, as always
probably too high


With an acquisition of B6 United would completely monopolize the NY market
across EWR, LGA and JFK and regulators
would not allow it to proceed without significant divestitures at all three


And beefing up routes in Florida and the
SE would spark a fierce battle with AA
from their fortress hub in Miami


So I just don’t see that happening


I think UA would be wise to steer clear of B6, I think NK would be a much better acquisition for UA. It gets them the opportunity to build upon NK's large operations in FLL and MCO. It also gives UA some opportunities for focus cities. While it doesn't get them back into Kennedy airport, it does gives them more LGA slots and valuable gates at airports like LAX. Also NK's workforce is smaller and younger than B6.


Sent from my iPad using Tapatalk Pro

I have to ask, Exactly Why would UA need to steer clear of B6? Their Terminal and slots at JFK would really Help BOTH carriers. B6 could be decentralized to cover not only JFK bur EWR. IAD, ORD. IAH, DEN and FLL for a "Southern Corner" United doesn't already Have. United could establish a *A hub back at JFK and route 767's 777's and 787's in and out all over the world, along with EWR and IAD, The only real problem? would be ramping up EWR to support JFK initially because with operations comes People and Equipment to cover it. And the JBLU guys could cover all the Airbus work, But How much of the larger airplanes would they be able to cover initially? JFK has a LOT of facilities though we'd need something like Hangar 19 for all the possible work they'd be doing. It's actually a good Idea now that I think about it. So? Why exactly NOT in your opinion??


A couple reasons:

B6's fortunes have taken a turn, which is why we are even discussing them being taken over instead of them acquiring another carrier. Their workforce is disgruntled, talent has jumped ship and their costs are rising which makes many of the high cost markets more challenging especially in the face of stiff competition like Boston.

I don't think United wants more Northeast hubs, EWR and IAD are enough.

United is in a deficit of domestic mainline aircraft to their main competitors AA and DL, that deficit is almost the exact size of NK.

NK has been growing fast the last couple years and changed their dynamics in almost the exact opposite direction of B6. NK has a lot of younger less senior staff, which makes integration much easier. Also NK has a smaller work force compared to B6.

CO and PeoplExpress was a similar merger of a legacy and ULCC, that proved to be extremely successful. United and Spirit reminds me of that merger.

United would gain a fleet compatible with their own, a young work force, potential hub at FLL and the potential to add focus cities. NK is also large in ORD, EWR, IAH, MCO, LAX., LGA which can be easily integrated into United.


Sent from my iPad using Tapatalk Pro
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
User avatar
aemoreira1981
Posts: 2883
Joined: Mon Jan 09, 2017 12:17 am

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 2:55 pm

UA772IAD wrote:
SCQ83 wrote:
Gulfstream500 wrote:
Consolidation is not close to over. Actually, I'm expecting a ton of it in the next recession.

My bets:

Sun country: Bought by Southwest (or maybe Alaska if they don't buy B6), fleet is quite compatable.
Allegiant: Bought by Spirit (Not Frontier, why would they buy a fleet of aircraft that they are disposing, the A319).
JetBlue/Alaska/Hawaiian: I think they'll merge in a similar way as UA and CO. A B6, AS, and HA merger would make the fifth largest US airline, almost as big as United mainline by fleet size. Although, I believe that only two of the three will merge.


I agree with your analysis the most.

If there is a recession, IMO JetBlue and Alaska will suffer a lot (when compared with, let's say, Southwest). They lack geographical diversification and are focused in "millennial" regions that are economically overheated (California/West Coast for Alaska and Northeast/Florida for JetBlue). If there is another tech-bubble crash (just take a look at the latest IPOs and valuations of some tech companies) or real estate crash (same), places like the Bay Area will suffer a lot when all that fake wealth vanishes.


If there is a recession, all carriers will suffer, including established legacy carriers that call these major urban centers hubs. And it's not just the coastal regions that will suffer, but inland cities that have traditionally been home to manufacturing and distribution hubs will also hurt from a recession - particularly if it it's induced by a trade war; which will affect virtually every carrier, including WN.

I'm curious as to what these millennial regions of fake wealth are that you speak of?


American is most likely to suffer most, while JetBlue and Alaska will be least exposed in part because of tangible assets. Not counting the fleet inherited from Virgin America, Alaska owns all 30 of its E175s (Horizon capacity), 156 of its 166 737 fleet (the 10 leased planes are all B738s), and 23 of its 30 DH8D (the remaining 7 are owned by Boeing Capital) Alaska is likely to start shedding those ex-VX A319s and A320s once the leases expire (not counting the 10 that were owned, which could be put up for sale) once the MAX 9s start coming in after the MAX grounding ends. Of the non-Embraer fleet, JetBlue owns all but 11 of its 130 A320s and 61 of its 63 A321s...plus its slots at JFK are valuable as well.

Also, in a crisis, JetBlue could park its high-time A320s to reduce capacity, as they are paid off (or will soon be once the remaining leases can be bought out). Alaska could likely do likewise with its passenger 737-700s. American would need cash to service that massive debt.
 
UpNAWAy
Posts: 526
Joined: Thu Aug 11, 2016 12:42 pm

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 2:56 pm

DWC wrote:
When the US abolished the Sherman Act, the US ceased to be a free market economy. That is not an opinion, it's a definition of economics : the US3 oligopoly is influencing fares, the central condition of market economy, "atomicity of actors", is no more. Big players are influencing prices.

Case in point : I was just looking at direct international flights to the US for the next months. Without going into my O/D, someone please explain to me why does ITA Matrix / Googleflights list me the same fares for AA, DL or UA, not to mention that connections differ greatly ( DFW, ATL, IAD, JFK ). Unless Google throws in some lambda correction, if that is not price collusion, I don't know what is.

Just to say that in a sound economic environment, the mergers should not only be over, but the US3 should be investigated & demerged. Same applies to LH & LATAM, their respective market shares control their local market, which is against the law.



Ever notice gas stations on the same corner all have the same price. That's not collusion that is competition.
 
wv399
Posts: 51
Joined: Tue Apr 24, 2007 12:32 pm

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 3:19 pm

SCQ83 wrote:
UA772IAD wrote:
If there is a recession, all carriers will suffer, including established legacy carriers that call these major urban centers hubs. And it's not just the coastal regions that will suffer, but inland cities that have traditionally been home to manufacturing and distribution hubs will also hurt from a recession - particularly if it it's induced by a trade war; which will affect virtually every carrier, including WN.

I'm curious as to what these millennial regions of fake wealth are that you speak of?


I mean tech bubble coupled to real estate bubble. The Bay Area is the best example of this. Companies like Uber or WeWork have still to prove they can survive long-term and they are not only smoke and mirrors. The wealth created by the tech bubble in stocks has fuelled the real estate bubble in the Bay Area. If the first crashes, the second will come along. Those are the regions / airports that have grown the most in the last few years.

Alaska and (specially) JetBlue (and Virgin America back in the day) have a certain "snobbish" attitude to destinations. They are focused on those kind of international / "millennial" urban areas somehow forgetting about middle America. The US3 and WN are more diversified geographically, covering more or less the whole country.


It's not that Alaska and JetBlue are snobbish about destinations, but more likely are:

A. Serving their customers by flying to the cities they demand.
B. Choosing places where they can make money and get space.

Using B6 as an example, ATL was a giant hole in the network. But to fly there from JFK, they'd have to drop flights elsewhere unless they could get additional slots. Plus they'd have the challenge of securing precious gate space in ATL (witness how DL and WN have fought for years over 1 gate in DAL). Smaller carriers are usually given common use gates. B6 is only now getting it's own gates in SFO and ORD.
 
TYWoolman
Posts: 104
Joined: Sat Jun 24, 2017 8:24 pm

Re: Is consolidation over in the US ?

Tue Sep 03, 2019 3:49 pm

luckyone wrote:
My two cents:

- B6’s operations in Florida do not constitute a SE operation or hub, and Florida really isn’t positioned for SE hubbing. Look no further than where those flights are going, which is mostly to the Northeast. There’s very little SE flying, and little potential to do so.

- Being a bit whimsical here, but what’s stopping Delta from buying AS...and just divesting it’s former domestic ops from SEA and likely some at LAX. Put another way, Delta buys Alaska, and divests its pre-merger self from SEA/LAX (minus international ops).


Possible. As I don't see Delta sitting idle if Alaska came into play. It willl utilize the good-will it is creating in Seattle to make a strong case.

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Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos