amdiesen
Topic Author
Posts: 99
Joined: Mon Aug 01, 2016 2:27 pm

Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 5:54 am

Southwest, pre-covid, has been evaluating expansion ideas for years. Copa was included in one of ANets discussions; hawaii, trans-atlantic using long range narrowbodies. Synergies between GOL and LUV appear to be evident. Under the Delta partnership, the idea would have been a non-starter. The landscape has significantly changed.

Create a team to explore the opportunistic feasibility

What would be the pros/cons?
What would be the proper ownership objective? 20%?, 51%? Does it make sense to retain current Brazilian owner/partners to insure political access/influence?
https://irglobal.com/article/brazil-cha ... e-industry
Would the AA agreement have a US airline non-compete? Would a potential LUV agreement include annulling the AA relationship?
GOLs share price, market cap is $3.33 and 600m respectively (only a portion of the ownership is public shareholders). The share price is down from ~$17 one year average.
https://finance.yahoo.com/quote/GOL?p=G ... in-srch-v1

Would you consider there is a post covid dominated world, the discussion is expected to reflect this forward thinking.
 
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LAX772LR
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Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 6:23 am

amdiesen wrote:
What would be the pros/cons?

Having no idea what the state of the domestic economy will be like in a month, 3months, 6months or a year from now + likely to receive some form of assistance at taxpayer cost = a terrible environment to even be considering the likes of an equity purchase in a foreign airline who may be facing even a tougher market/economy than WN itself.

Regardless of internal consideration: this isn't something we're likely to see acted upon for a longgggggggg time.
I myself, suspect a more prosaic motive... ~Thranduil
 
Waterbomber2
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Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 6:26 am

If they get enough bail-out money, they can buy Ryanair too.
 
Boof02671
Posts: 1845
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Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 8:02 am

It’s against the WN’s pilot contract
 
barney captain
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Joined: Tue Nov 06, 2001 5:47 pm

Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 9:12 am

Boof02671 wrote:
It’s against the WN’s pilot contract


No, there are provisions for code share and nothing to stop a purchase, except well - the world as we know it.
Southeast Of Disorder
 
MIflyer12
Posts: 6940
Joined: Mon Feb 18, 2013 11:58 pm

Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 11:24 am

amdiesen wrote:
What would be the proper ownership objective? 20%?, 51%?
...
Would the AA agreement have a US airline non-compete?


A U.S. buyer owning more than 20% needs to show its share of GOL's losses on its income statements (miscellaneous income or loss). That would be discouraging - your income goes up and down with GOL's losses. U.S. carriers don't like that added income volatility because stock buyers don't like the volatility - they are likely to value the company at a lower multiple of average annual earnings. Less than a 20% and non-controlling share allows them to write down the value of their equity investment instead.

Unless AA and GOL have an authorized (U.S. and Brazil) anti-trust-immunized joint venture there can't be schedule coordination, capacity coordination, or pricing coordination - certainly not a 'non-compete.'
 
wnflyguy
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Joined: Thu Feb 10, 2011 7:58 pm

Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 2:03 pm

Everyone struggling right now. WN is like everyone else trying badly to stop the losses with this pandemic so nobody BUYING anyone.
Flyguy
my post are my opinion only and not those of southwest airlines and or airtran airlines.
 
Boof02671
Posts: 1845
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Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 2:14 pm

barney captain wrote:
Boof02671 wrote:
It’s against the WN’s pilot contract


No, there are provisions for code share and nothing to stop a purchase, except well - the world as we know it.

The pilots CBA prevents them from buying another airline and operating separate and you can’t merge a foreign airline into a domestic one
 
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cathay747
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Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 4:42 pm

I mean no disrespect, but for multiple reasons, this is one of the most ludicrous ideas I think I've ever heard.
Try a Little VC-10derness
 
INFINITI329
Posts: 2503
Joined: Mon Jul 02, 2012 12:53 am

Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 6:28 pm

Boof02671 wrote:
barney captain wrote:
Boof02671 wrote:
It’s against the WN’s pilot contract


No, there are provisions for code share and nothing to stop a purchase, except well - the world as we know it.

The pilots CBA prevents them from buying another airline and operating separate and you can’t merge a foreign airline into a domestic one


In federal court, I think WN would prevail. I think it could easily be argued that the provisions in the contract are meant to reference carriers operating under the same jurisdiction that WN is ..the United States. Unless there has already been precedent set by a previous court decision in which this issue was already tackled
 
Boof02671
Posts: 1845
Joined: Sun Jul 10, 2016 12:15 am

Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 6:33 pm

INFINITI329 wrote:
Boof02671 wrote:
barney captain wrote:

No, there are provisions for code share and nothing to stop a purchase, except well - the world as we know it.

The pilots CBA prevents them from buying another airline and operating separate and you can’t merge a foreign airline into a domestic one


In federal court, I think WN would prevail. I think it could easily be argued that the provisions in the contract are meant to reference carriers operating under the same jurisdiction that WN is ..the United States. Unless there has already been precedent set by a previous court decision in which this issue was already tackled

I doubt it. WN agreed to it it’s legal and binding and has been for years. What law or legal case are you basing your opinion on?
 
INFINITI329
Posts: 2503
Joined: Mon Jul 02, 2012 12:53 am

Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 8:46 pm

Boof02671 wrote:
INFINITI329 wrote:
Boof02671 wrote:
The pilots CBA prevents them from buying another airline and operating separate and you can’t merge a foreign airline into a domestic one


In federal court, I think WN would prevail. I think it could easily be argued that the provisions in the contract are meant to reference carriers operating under the same jurisdiction that WN is ..the United States. Unless there has already been precedent set by a previous court decision in which this issue was already tackled

I doubt it. WN agreed to it it’s legal and binding and has been for years. What law or legal case are you basing your opinion on?


Just a theory. I am just thinking of all the angles Southwest could take to convince a federal judge that the clause should be limited to US carriers. Just like any law, a CBA subject to interpretation by an independent party such as an arbitrator or judge. I think it would be a challenge worth making. I think a pretty convincing brief could be drafted to contest this, if it is decided that, that the bridge will be crossed. I believe this would be uncharted territory as I don't believe this issue has been settled before. I b
 
SWADawg
Posts: 557
Joined: Tue Dec 03, 2013 6:43 pm

Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 8:51 pm

Why is this even a thread? WN and every other carrier around the globe is in the fight of their lives for survival. None of these Airlines are thinking about anything else right now other than how to keep the lights on right now. Let’s have some perspective please.
My posts are my opinion only and do not reflect the views of Southwest Airlines
 
Boof02671
Posts: 1845
Joined: Sun Jul 10, 2016 12:15 am

Re: Southwest should consider a partial tender offer for GOL

Wed Mar 25, 2020 9:10 pm

INFINITI329 wrote:
Boof02671 wrote:
INFINITI329 wrote:

In federal court, I think WN would prevail. I think it could easily be argued that the provisions in the contract are meant to reference carriers operating under the same jurisdiction that WN is ..the United States. Unless there has already been precedent set by a previous court decision in which this issue was already tackled

I doubt it. WN agreed to it it’s legal and binding and has been for years. What law or legal case are you basing your opinion on?


Just a theory. I am just thinking of all the angles Southwest could take to convince a federal judge that the clause should be limited to US carriers. Just like any law, a CBA subject to interpretation by an independent party such as an arbitrator or judge. I think it would be a challenge worth making. I think a pretty convincing brief could be drafted to contest this, if it is decided that, that the bridge will be crossed. I believe this would be uncharted territory as I don't believe this issue has been settled before. I b

It clearly states domestic and international. The contract is binding under Federal Law, the Railway Labor Act
 
barney captain
Posts: 2315
Joined: Tue Nov 06, 2001 5:47 pm

Re: Southwest should consider a partial tender offer for GOL

Thu Mar 26, 2020 12:38 am

Boof02671 wrote:
barney captain wrote:
Boof02671 wrote:
It’s against the WN’s pilot contract


No, there are provisions for code share and nothing to stop a purchase, except well - the world as we know it.

The pilots CBA prevents them from buying another airline and operating separate and you can’t merge a foreign airline into a domestic one


The first part is correct as long as you include the "and". I was only stating there's nothing in the CBA that prevents SWA from buying someone. The second part I was unaware of, but it makes sense.
Southeast Of Disorder
 
ericm2031
Posts: 1274
Joined: Tue Jun 19, 2012 8:46 am

Re: Southwest should consider a partial tender offer for GOL

Thu Mar 26, 2020 12:53 am

The only 'evident synergies' are the B737 fleet, which opens up any B737 carrier up for potential acquisition, which makes this whole topic pointless.
 
TYWoolman
Posts: 384
Joined: Sat Jun 24, 2017 8:24 pm

Re: Southwest should consider a partial tender offer for GOL

Thu Mar 26, 2020 6:42 am

Nothing wrong with your post at all. These kind of ideas shake up the comfort zones in our minds! The only thing I think would not favor these kind of acquisition, strategic moves in the short-term is the bail-out. Is that a responsible move when money used for such an international investment can be seen as the money solicited due to domestic uncertainty?
 
amdiesen
Topic Author
Posts: 99
Joined: Mon Aug 01, 2016 2:27 pm

Re: Southwest should consider a partial tender offer for GOL

Fri Mar 27, 2020 3:16 am

MIflyer12 wrote:
A U.S. buyer owning more than 20% needs to show its share of GOL's losses on its income statements (miscellaneous income or loss). That would be discouraging - your income goes up and down with GOL's losses. U.S. carriers don't like that added income volatility because stock buyers don't like the volatility - they are likely to value the company at a lower multiple of average annual earnings. Less than a 20% and non-controlling share allows them to write down the value of their equity investment instead.

thank you, understood. for thread clarity:
equity interest x < 20%
significant influence 20% > x > 50%
control x > 50%
agreed with your volatility statements with the caveat that hemisphere opposites mean summer revenues are a muting factor to this issue. Respects to currency and country economic fluctuations.
one/MIflyer12 might add; "while this is sagely advice, rem- don't let the accting/tax tail wage the business dog"

TYWoolman wrote:
Nothing wrong with your post at all. These kind of ideas shake up the comfort zones in our minds! The only thing I think would not favor these kind of acquisition, strategic moves in the short-term is the bail-out. Is that a responsible move when money used for such an international investment can be seen as the money solicited due to domestic uncertainty?

thank you. This segways a key point nicely. One of the first things Citibank did after receiving TARP in 2008 was to loan the UAE five-to-eight billion. The investment struggled for the first 18months but.. look where the UAE was at the end of 2019.
http://content.time.com/time/business/a ... 52,00.html

There are two significant issues to highlight. 1) the business case 2) timing

1) the business case
Expansion. SW has expanded to Panama and Aruba. They have effectively saturated the US. They 'dated' Westjet and were unsuccessful in developing a LTR. Delta maneuvered Westjet/Canada and Aeromexico/Mexico. SW is unlikely to expand into the competitive and lcc rich European landscape where max foreign ownership is x < 50%. GOL/Brazil is impactful and fills an aspirational SW route-map.
Constantino family The germane question will be the Constantino's interest in a partnership. Brazil has lifted foreign ownership limits. And the "Constantino Family will cease control of GOL in the context of the Smiles acquisition". A skim of the internet says they own ~48%. Enjoy debating/pontificating technical and reality issues. The question is would the Constantino family embrace a long-term SW partnership as a win? Shared ownership plus a carve out for public ownership.
https://www.prnewswire.com/news-release ... 00196.html
Synergies Fleet utilization based on opposite summer/winter. GOL embracing SW efficiency methodologies; maximizing legs per day, unconventional boarding, FA's encouraged to quip bad jokes. GOL Aerotech, MRO facilities, embracing SW standards. SW sources a labor competitive MRO capacity, GOL Aerotech expands significantly and gains reputation.
https://www.prnewswire.com/news-release ... 66930.html
SW's comparative financial strength could ease GOL leasing costs; one possibility being that SW could lease planes to the GOL/SW partnership.
growth/1+1=3 GKelly has expressed interest in Boeings NMA. The partnership plus the NMA would be a disruptive business strategy as a North/South bridge vehicle. The LUV standard is known and appreciated in North America, if applied in Brazil a similar reputation would be expected/hoped to develop locally. Regardless, Inter-Americas tourism would benefit from familiar/known passenger experience and brand reputation.

2) Timing. There are moments in time when opportunities present. Having a well though-out business strategy, having thought through an opportunity improves the dynamics of decision making. A key is to pre-develop the relationships, understanding political/labor/strategic management/legal environments and analyze economic ramifications of the opportunity. The industry currently has significant talent either putting out fires or sitting on their hands. Stakeholders expect efforts/results in understanding possible landscape/regime changes. Intellectual industry resources are available in the corporate offices at Love field; the thought of improving future bonuses (or a level of job security) could be a panacea lifting execs out of a bonus-less 2020 and motivating them to engage Brazilian colleagues.
An example is Boeing/Bombardier's cobbled A220 partnership discussions... (and to think that SW could be flying the A22*s in a few years).
There will be future moments in time where resource availability will change and enterprises will be fragile. The economics of buying at these market lows is a Hetty Green trade.
Current relationship landscape. The Constantinos and Delta have a 'challenged' relationship. United has navigated partners throughout South/Central America. AA, a South and Latin American premium brand, has been navigating a myriad of multi-year challenges. One might consider AA C-suite reactions to the thought of M. Constantino Júnior and Gary Kelly piloting 797s across the equator with frequency.
GOL's management and board should be discussing service positioning in the light of the LATAM/Delta parntership. Wikipedia quotes Elton Fernandes in a debate over GOLs LCC positioning; "GOL's costs are not very different from those of TAM Airlines. People are accustomed to calling GOL low-cost, but GOL is not that. It is not even low-fare anymore." Tilting toward a SW model has the dynamic that factor inertial has already been overcome. https://en.wikipedia.org/wiki/Gol_Trans ... te_note-26
Perhaps they will bring back hot pants and go-go boots for Carnival flights. Wikipedia/history of SW, footnote 8; Freiberg, Kevin, and Jackie Freiberg. NUTS!. Austin, Texas: Bard Press, 1996.

Plane Smart
 
Boof02671
Posts: 1845
Joined: Sun Jul 10, 2016 12:15 am

Re: Southwest should consider a partial tender offer for GOL

Fri Mar 27, 2020 4:03 am

And once again SWAPA’s contract prohibits this.
 
Lufthansa
Posts: 2632
Joined: Thu May 20, 1999 6:04 am

Re: Southwest should consider a partial tender offer for GOL

Fri Mar 27, 2020 6:44 am

absolutely NOT!

WN is not an investment fund, it's an airline. In the current environment it needs to invest in itself.
When airlines invest in other airlines they usually do so for strategic reasons like it for example will
provide them feed. Unless WN wants to enter the long haul market this useless as neither airline flies
to the others major hubs.

There's lot of more suitable options. Say for example if AA or UA wanted a stake well it would make sense.
But SWA just doesn't play in that market with its current business model. Azul would make more sense.
Conserving cash giving the current situation, especially with the MAX involved and possibly major changes needed
would make more sense.
 
TYWoolman
Posts: 384
Joined: Sat Jun 24, 2017 8:24 pm

Re: Southwest should consider a partial tender offer for GOL

Fri Mar 27, 2020 12:44 pm

Delete
Last edited by TYWoolman on Fri Mar 27, 2020 12:47 pm, edited 1 time in total.
 
TYWoolman
Posts: 384
Joined: Sat Jun 24, 2017 8:24 pm

Re: Southwest should consider a partial tender offer for GOL

Fri Mar 27, 2020 12:46 pm

amdiesen wrote:
MIflyer12 wrote:
A U.S. buyer owning more than 20% needs to show its share of GOL's losses on its income statements (miscellaneous income or loss). That would be discouraging - your income goes up and down with GOL's losses. U.S. carriers don't like that added income volatility because stock buyers don't like the volatility - they are likely to value the company at a lower multiple of average annual earnings. Less than a 20% and non-controlling share allows them to write down the value of their equity investment instead.

thank you, understood. for thread clarity:
equity interest x < 20%
significant influence 20% > x > 50%
control x > 50%
agreed with your volatility statements with the caveat that hemisphere opposites mean summer revenues are a muting factor to this issue. Respects to currency and country economic fluctuations.
one/MIflyer12 might add; "while this is sagely advice, rem- don't let the accting/tax tail wage the business dog"

TYWoolman wrote:
Nothing wrong with your post at all. These kind of ideas shake up the comfort zones in our minds! The only thing I think would not favor these kind of acquisition, strategic moves in the short-term is the bail-out. Is that a responsible move when money used for such an international investment can be seen as the money solicited due to domestic uncertainty?

thank you. This segways a key point nicely. One of the first things Citibank did after receiving TARP in 2008 was to loan the UAE five-to-eight billion. The investment struggled for the first 18months but.. look where the UAE was at the end of 2019.
http://content.time.com/time/business/a ... 52,00.html

There are two significant issues to highlight. 1) the business case 2) timing

1) the business case
Expansion. SW has expanded to Panama and Aruba. They have effectively saturated the US. They 'dated' Westjet and were unsuccessful in developing a LTR. Delta maneuvered Westjet/Canada and Aeromexico/Mexico. SW is unlikely to expand into the competitive and lcc rich European landscape where max foreign ownership is x < 50%. GOL/Brazil is impactful and fills an aspirational SW route-map.
Constantino family The germane question will be the Constantino's interest in a partnership. Brazil has lifted foreign ownership limits. And the "Constantino Family will cease control of GOL in the context of the Smiles acquisition". A skim of the internet says they own ~48%. Enjoy debating/pontificating technical and reality issues. The question is would the Constantino family embrace a long-term SW partnership as a win? Shared ownership plus a carve out for public ownership.
https://www.prnewswire.com/news-release ... 00196.html
Synergies Fleet utilization based on opposite summer/winter. GOL embracing SW efficiency methodologies; maximizing legs per day, unconventional boarding, FA's encouraged to quip bad jokes. GOL Aerotech, MRO facilities, embracing SW standards. SW sources a labor competitive MRO capacity, GOL Aerotech expands significantly and gains reputation.
https://www.prnewswire.com/news-release ... 66930.html
SW's comparative financial strength could ease GOL leasing costs; one possibility being that SW could lease planes to the GOL/SW partnership.
growth/1+1=3 GKelly has expressed interest in Boeings NMA. The partnership plus the NMA would be a disruptive business strategy as a North/South bridge vehicle. The LUV standard is known and appreciated in North America, if applied in Brazil a similar reputation would be expected/hoped to develop locally. Regardless, Inter-Americas tourism would benefit from familiar/known passenger experience and brand reputation.

2) Timing. There are moments in time when opportunities present. Having a well though-out business strategy, having thought through an opportunity improves the dynamics of decision making. A key is to pre-develop the relationships, understanding political/labor/strategic management/legal environments and analyze economic ramifications of the opportunity. The industry currently has significant talent either putting out fires or sitting on their hands. Stakeholders expect efforts/results in understanding possible landscape/regime changes. Intellectual industry resources are available in the corporate offices at Love field; the thought of improving future bonuses (or a level of job security) could be a panacea lifting execs out of a bonus-less 2020 and motivating them to engage Brazilian colleagues.
An example is Boeing/Bombardier's cobbled A220 partnership discussions... (and to think that SW could be flying the A22*s in a few years).
There will be future moments in time where resource availability will change and enterprises will be fragile. The economics of buying at these market lows is a Hetty Green trade.
Current relationship landscape. The Constantinos and Delta have a 'challenged' relationship. United has navigated partners throughout South/Central America. AA, a South and Latin American premium brand, has been navigating a myriad of multi-year challenges. One might consider AA C-suite reactions to the thought of M. Constantino Júnior and Gary Kelly piloting 797s across the equator with frequency.
GOL's management and board should be discussing service positioning in the light of the LATAM/Delta parntership. Wikipedia quotes Elton Fernandes in a debate over GOLs LCC positioning; "GOL's costs are not very different from those of TAM Airlines. People are accustomed to calling GOL low-cost, but GOL is not that. It is not even low-fare anymore." Tilting toward a SW model has the dynamic that factor inertial has already been overcome. https://en.wikipedia.org/wiki/Gol_Trans ... te_note-26
Perhaps they will bring back hot pants and go-go boots for Carnival flights. Wikipedia/history of SW, footnote 8; Freiberg, Kevin, and Jackie Freiberg. NUTS!. Austin, Texas: Bard Press, 1996.

Plane Smart


I enjoy reading business cases for a merger/partnership and this seems like a good case.

Four points, however:
1) I don't think Southwest is done in the U.S. They can invade more legacy hubs, albeit not as easily amid rising costs.
2) Until Southwest wins pilot approval on another aircraft type, the precedent won't be there to win pilots on yet a "foreign" new business strategy that may usurp Southwest pilot/U.S. domestic growth opportunities, or worse yet, shrink it.
3) In such a Southwest partnership, GOL most likely would be giving up an American Airlines partnership just when a Delta/Latam is stirring its couldron.
4) There is yet no airline giving guidance on the international scene let alone their own respective domestic markets post Clovid-19.
 
MIflyer12
Posts: 6940
Joined: Mon Feb 18, 2013 11:58 pm

Re: Southwest should consider a partial tender offer for GOL

Fri Mar 27, 2020 1:13 pm

amdiesen wrote:
1) the business case
Expansion. SW has expanded to Panama and Aruba. They have effectively saturated the US. They 'dated' Westjet and were unsuccessful in developing a LTR. Delta maneuvered Westjet/Canada and Aeromexico/Mexico. SW is unlikely to expand into the competitive and lcc rich European landscape where max foreign ownership is x < 50%. GOL/Brazil is impactful and fills an aspirational SW route-map.
Constantino family The germane question will be the Constantino's interest in a partnership. Brazil has lifted foreign ownership limits. And the "Constantino Family will cease control of GOL in the context of the Smiles acquisition". A skim of the internet says they own ~48%. Enjoy debating/pontificating technical and reality issues. The question is would the Constantino family embrace a long-term SW partnership as a win? Shared ownership plus a carve out for public ownership.
https://www.prnewswire.com/news-release ... 00196.html
Synergies Fleet utilization based on opposite summer/winter. GOL embracing SW efficiency methodologies; maximizing legs per day, unconventional boarding, FA's encouraged to quip bad jokes. GOL Aerotech, MRO facilities, embracing SW standards. SW sources a labor competitive MRO capacity, GOL Aerotech expands significantly and gains reputation.
https://www.prnewswire.com/news-release ... 66930.html
SW's comparative financial strength could ease GOL leasing costs; one possibility being that SW could lease planes to the GOL/SW partnership.
growth/1+1=3 GKelly has expressed interest in Boeings NMA. The partnership plus the NMA would be a disruptive business strategy as a North/South bridge vehicle. The LUV standard is known and appreciated in North America, if applied in Brazil a similar reputation would be expected/hoped to develop locally. Regardless, Inter-Americas tourism would benefit from familiar/known passenger experience and brand reputation.


There is no business case. If WN wants to serve Brazil it can fly MAXs from FLL or MCO the same way GOL can.

You're proposing that WN risk its reputation and financial strength to prop up a carrier that you plainly acknowledge doesn't operate to WN standards.

They might find some fleet maintenance synergies (as DL and AM have at QRO) but that's not enough to swing a deal, and just worsens WN's relations with its mechanics.

Frankly, if Gol had any value DL would have kept its stake. Gol doesn't serve the broad Latin American market so much as the Brazilian market which, to the U.S., just isn't that large. In revenue it's smaller than Italy; about 2/3 the size of Mexico. Brazil just makes the U.S.-international top 10. See slide #28 from Delta's 12/2017 Investor Day Presentation. https://ir.delta.com/events-and-present ... sentations

You observe that WN has no anti-trust immunized JVs? That it has no equity stakes? That WN has no codeshares with anybody, right?

This all all bad thinking by some Brazilian wannabe investment banker who's had WAY TOO MUCH caffeine.
 
onwFan
Posts: 228
Joined: Wed Feb 03, 2016 4:02 am

Re: Southwest should consider a partial tender offer for GOL

Fri Mar 27, 2020 1:45 pm

MIflyer12 wrote:
amdiesen wrote:

Frankly, if Gol had any value DL would have kept its stake. Gol doesn't serve the broad Latin American market so much as the Brazilian market which, to the U.S., just isn't that large. In revenue it's smaller than Italy; about 2/3 the size of Mexico. Brazil just makes the U.S.-international top 10. See slide #28 from Delta's 12/2017 Investor Day Presentation. https://ir.delta.com/events-and-present ... sentations


This makes no sense. Are you saying if GOL had any value, they would have kept it on top of the partnership with LATAM?

The point is that the DL-G3 partnership made no sense at all (nor does the LA-DL partnership!). DL was a very minor player in the Latin American market with only Brazil being the only country which was served more than once daily - all other destinations were served from ATL, which was okay for connecting passengers from around the US, but that's not where people were going. And that is telling, irrespective of however you try to portray it - Brazil and Argentina are the biggest markets in Latin America, and LA relies so much on connecting passengers to Brazil & Argentina through LIM and SCL as well... But AA already flew so many non-stops to these places that LA didn't have any advantage. Without MIA (the only place G3 could profitably fly to with their fleet), DL could offer nothing to G3.

For any Latin American airline, AA is the airline to go for, and DL just handed them on a gold plate to G3 (and possibly AR, another partner to which DL brings nothing). DL will also bring little value to LA - Combined with the covid crisis, LATAM just sealed their fate to doom. They already withdrew most international service from Colombia & Ecuador (including MIA) - just expect that trend to continue!

Oh, and as for Mexico, AA and UA are each individually as large as DL+AM combined between US-Mexico - which is why DL needed AM badly. And still they do not seem to be able to make many routes work.
 
WayexTDI
Posts: 1579
Joined: Fri Sep 21, 2018 4:38 pm

Re: Southwest should consider a partial tender offer for GOL

Fri Mar 27, 2020 4:05 pm

Boof02671 wrote:
And once again SWAPA’s contract prohibits this.

And like any contract, it can be rescinded by one party if needed (that opens to negotiation or lawsuit usually) or dropped/amended if both parties are in agreement.

So, if WN sweetens the deal, SWAPA might be open to the idea and might agree to an amendment.

People think contracts are the end of all discussion once signed; that is incorrect, there are many ways to amend, or even cancel altogether, a contract.
 
Boof02671
Posts: 1845
Joined: Sun Jul 10, 2016 12:15 am

Re: Southwest should consider a partial tender offer for GOL

Fri Mar 27, 2020 4:17 pm

WayexTDI wrote:
Boof02671 wrote:
And once again SWAPA’s contract prohibits this.

And like any contract, it can be rescinded by one party if needed (that opens to negotiation or lawsuit usually) or dropped/amended if both parties are in agreement.

So, if WN sweetens the deal, SWAPA might be open to the idea and might agree to an amendment.

People think contracts are the end of all discussion once signed; that is incorrect, there are many ways to amend, or even cancel altogether, a contract.

Doesn’t work that way under the RLA at all.
Contracts are amendable on a certain date and never expire and under the RLA. The pilots are under no obligation to open up their contract until 60 days prior to the amendable date.

No one can cancel a CBA under the RLA except a bankruptcy judge after both parties follow the Section 1113 C progress.

You are totally misinformed.

The average length of Section 6 now is two to five years.

http://www.twu567.org/pdfs/library/fede ... ABarga.pdf

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Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

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