Abeam79 wrote:

ZazuPIT wrote:

Abeam79 wrote:

Thank you!
Zazu…that statement is purely baseless, are you paying attention? Not only do they go up against the big legacies, but foreign legacies like BA on the most competitive route nyc-London, and from i hear it’s doing great.
The reason they want to aquire spirit and supercharge the airline is to be a better competitor, you can’t be a true competitor adding routes in these mega hubs from legacies when your 1/4 their size.

You "hear" London is doing great. Do we have any data to prove it? Regardless, they want to acquire NK to (1) get rid of a competitor, (2) get planes fast, (3) get pilots fast. As I stated before, if people believe that B6 will keep even a fraction of Spirit's route system, they are dreaming. As I and others have said, when B6 can compete in the interior of the nation, then they might be a player. They have had 20+ years to go up against the legacies and become a true national competitor. They have failed at that. The world does not revolve around NYC and BOS. I have no skin in this game, but I know desperation when I see it. JetBlue is running scared.

Ok sure, you seem to know it all.
And yes it’s doing good with London. Why do you think they are adding 3 more routes to London in the coming months from nyc and Boston.

No need to be a wise ass. I don't claim to know everything. You are propping B6 up on London alone? That's a weak defense. They have had ample time to grow internally. They blew it with Virgin, so now they are going after an airline they have no intention of maintaining it's route structure. There seems to be a lot of folks here who seem to agree with me. I'm not drinking the blue kool-aid, sorry.

Abeam79 wrote:

TYWoolman wrote:

Abeam79 wrote:

I disagree, ULCC’s don’t offer a premium cabin, move into highest cost, higher yeild airports, dozens of codeshares, a looming lounge in play, and more free amentities than any other US airline. B6 has been many times described as a boutique hybrid airline, to me its a very streamlined, watered down version of a legacy. Only 3, soon to be 2 fleet types and goes to 3 continents with transoceanic operations. I surmise you obviously don’t live near the B6 bases they are big out of cause they do in fact have a very sizeable ff base in the more important and largest markets in the nation. The main plus for the nea is for slots more than anything. Again, many analyst have stated both have equal scrutiny. The nk/f9 merger has almost double route overlap than in the B6/NK. And past is prologue, everytime there is a merger those overlapping routes consolidate and viola’….prices go up.

We disagree, and that's cool. Would be boring otherwise lol. I do live near a base. I do think B6 has a lot of potential but they are not the right fit for NK. Natural market tendencies bring NK into the fold of F9. Equal scrutiny, yes, but with different outcomes.

LOL isn’t the whole point of a forum is to entertain each other saucy banter?

Perhaps.

MUWarriors wrote:

TYWoolman wrote:

Prices increased past mergers because passengers would only get more of the same elsewhere (other legacies who merged). F9/NK will have more incentive to keep prices lower because passengers can simply jump ship to a "better" experience on B6 for the same price. F9/NK solidify a true differentiator for the long-term imo.

But, if B6, doesn’t compete on a given route, what’s going to keep F9/NK honest? Right now they are keeping each other honest with their ULCC competition, what motivation do they have to ensure rock bottom prices when the other major ULCC is gone? I see you later mention keeping their customers loyal, but I think it’s fair to say loyalty is not the driving factor for many (most?) F9/NK customers. They are after price conscious shoppers who will pick any fare $1 less than a competitor. I’m not saying that’s a terrible model, but I do think it limits F9/NK’s desire to keep prices super low like they do now post merger. Or at the very least, that’ll be the DOJ’s argument.

What I’m saying is from a DOJ perspective there isn’t a huge difference between the two mergers. I think the F9 offer has a slightly better chance, but I don’t think it’s huge. Basically if the DOJ is comfortable with one, they’d be comfortable with either. To be honest, the more I think about it the less concerned I am with who the merger is with long term, and more about the breakup fee, because I think it’s going to be a long, tough fight for either.

Legacies will keep F9/NK in check when B6 cannot. Most if not all ULCC expansion will need to be in markets ripe for low fare competition: legacy strongholds and focus cities, as well as p2p leisure routes which require a low fare experience. There is a huge difference between B6 and NK. B6 is the higher cost, higher fare airline wanting to team up with a legacy.

Polot wrote:

11C wrote:

sxf24 wrote:

The US Government has established a clear standard for consumer benefit: more capacity and lower fares from airlines that are able to reliably deliver the service. A superior product at a higher cost and lower capacity has historically not carried weight.

Luckily, the US government is not in the airline business.

The US government is most certainly involved in the airline business. They have the power to kill mergers, grant antitrust immunities, revoke antitrust immunities, etc.

From a free market standpoint you should not care about onboard service. If everyone is racing to the bottom and people are willing to pay for service than either an airline can offer a higher service tier or a new entrant can come in and take those passengers with better service (much like B6 did 20 years ago).

Ok, “involved”, meaning they have regulatory oversight, but they are not performing executive oversight of a part 121 carrier for business purposes. The free market is part fiction, part reality, due to government regulation. I understand that it is fun to theorize about an industry in a vacuum, where the free market picks winners and losers, but we all know that the government often doesn’t let the losers fail, and gives immunity to others allowing them to grow to an enormous size. So there really isn’t a purely free market at work.

So serious questions. If Jetblue is not successful in acquiring Spirit, AND they lose the NEA, what is next for them? JetBlue has an important place in the US aviation market, but if the two largest ULCCs combine, this would put pressure on them, that the may not be able to fully withstand. So, what could their potential plan B or Plan C be?

Abeam79 wrote:

TYWoolman wrote:

https://www.businesswire.com/news/home/20220628005862/en/Spirit-Airlines-Reaffirms-Commitment-to-Merger-with-Frontier

Case closed.

What are you on? Lol it’s far from closed,
https://otp.investis.com/clients/us/jet ... wsid=84067
I love how you keep mentioned that F9 deal will pass regulatory measures easier, please refer to iss initial filing saying both face equal scrutiny from doj. Again, you keep ignoring the overlap is far great with NK/f9 than B6/NK.
That 10 page presentation by frontier is so absurd and embarrassing at least. No wonder their whole shady process not doing the shareholder fiduciary responsibility has acted out as such.
Here a lil more reading material

https://www.businesswire.com/news/home/ ... p-Holdings
Excerpt
“ JetBlue has made its commitment clear, compensating Spirit shareholders with $470 million in the form of an upfront payment and a ticking fee. And yet, to shareholders’ detriment, the Board has continued to favor a Frontier transaction, recommending shareholders accept a bid that relies entirely on Frontier’s ability to massively improve its stock price while integrating a complex airline merger in a very risky macro environment.

The Board is being rather cavalier to assume that Frontier’s stock will appreciate by 80% to equal the JetBlue offer of $33.50 per share. Worse still, Spirit shareholders have an opportunity more easily participate in an airline recovery without being tied up in the complex Frontier deal scenario.”

Just because B6 has a bid, doesn’t mean the NK BOD has to do something with it. This isn’t a case of one or the other. If the F9 vote fails, NK could just say they’re going to go it alone for now and, while they’re at it, put a bullseye squarely on B6’s most profitable routes.

Flflyer83 wrote:

Abeam79 wrote:

TYWoolman wrote:

https://www.businesswire.com/news/home/20220628005862/en/Spirit-Airlines-Reaffirms-Commitment-to-Merger-with-Frontier

Case closed.

What are you on? Lol it’s far from closed,
https://otp.investis.com/clients/us/jet ... wsid=84067
I love how you keep mentioned that F9 deal will pass regulatory measures easier, please refer to iss initial filing saying both face equal scrutiny from doj. Again, you keep ignoring the overlap is far great with NK/f9 than B6/NK.
That 10 page presentation by frontier is so absurd and embarrassing at least. No wonder their whole shady process not doing the shareholder fiduciary responsibility has acted out as such.
Here a lil more reading material

https://www.businesswire.com/news/home/ ... p-Holdings
Excerpt
“ JetBlue has made its commitment clear, compensating Spirit shareholders with $470 million in the form of an upfront payment and a ticking fee. And yet, to shareholders’ detriment, the Board has continued to favor a Frontier transaction, recommending shareholders accept a bid that relies entirely on Frontier’s ability to massively improve its stock price while integrating a complex airline merger in a very risky macro environment.

The Board is being rather cavalier to assume that Frontier’s stock will appreciate by 80% to equal the JetBlue offer of $33.50 per share. Worse still, Spirit shareholders have an opportunity more easily participate in an airline recovery without being tied up in the complex Frontier deal scenario.”

Just because B6 has a bid, doesn’t mean the NK BOD has to do something with it. This isn’t a case of one or the other. If the F9 vote fails, NK could just say they’re going to go it alone for now and, while they’re at it, put a bullseye squarely on B6’s most profitable routes.

If 50.1% of Spirits outstanding shares are tendered to B6, then that will proceed regardless.

HunterATL wrote:

Just because B6 has a bid, doesn’t mean the NK BOD has to do something with it. This isn’t a case of one or the other. If the F9 vote fails, NK could just say they’re going to go it alone for now and, while they’re at it, put a bullseye squarely on B6’s most profitable routes.

If 50.1% of Spirits outstanding shares are tendered to B6, then that will proceed regardless.

Exactly, and the shareholders are obviously looking for a payday…

santi319 wrote:

HunterATL wrote:

Just because B6 has a bid, doesn’t mean the NK BOD has to do something with it. This isn’t a case of one or the other. If the F9 vote fails, NK could just say they’re going to go it alone for now and, while they’re at it, put a bullseye squarely on B6’s most profitable routes.

If 50.1% of Spirits outstanding shares are tendered to B6, then that will proceed regardless.

Exactly, and the shareholders are obviously looking for a payday…[/quote]

That's not obvious at all. B6 has not disclosed, as far as I know, how many shares have been tendered.

HunterATL wrote:

Flflyer83 wrote:

Abeam79 wrote:

What are you on? Lol it’s far from closed,
https://otp.investis.com/clients/us/jet ... wsid=84067
I love how you keep mentioned that F9 deal will pass regulatory measures easier, please refer to iss initial filing saying both face equal scrutiny from doj. Again, you keep ignoring the overlap is far great with NK/f9 than B6/NK.
That 10 page presentation by frontier is so absurd and embarrassing at least. No wonder their whole shady process not doing the shareholder fiduciary responsibility has acted out as such.
Here a lil more reading material

https://www.businesswire.com/news/home/ ... p-Holdings
Excerpt
“ JetBlue has made its commitment clear, compensating Spirit shareholders with $470 million in the form of an upfront payment and a ticking fee. And yet, to shareholders’ detriment, the Board has continued to favor a Frontier transaction, recommending shareholders accept a bid that relies entirely on Frontier’s ability to massively improve its stock price while integrating a complex airline merger in a very risky macro environment.

The Board is being rather cavalier to assume that Frontier’s stock will appreciate by 80% to equal the JetBlue offer of $33.50 per share. Worse still, Spirit shareholders have an opportunity more easily participate in an airline recovery without being tied up in the complex Frontier deal scenario.”

Just because B6 has a bid, doesn’t mean the NK BOD has to do something with it. This isn’t a case of one or the other. If the F9 vote fails, NK could just say they’re going to go it alone for now and, while they’re at it, put a bullseye squarely on B6’s most profitable routes.

If 50.1% of Spirits outstanding shares are tendered to B6, then that will proceed regardless.

B6 has received 50.1% of NK shares? Why even hold the F9 vote then?

Flflyer83 wrote:

HunterATL wrote:

Flflyer83 wrote:

Just because B6 has a bid, doesn’t mean the NK BOD has to do something with it. This isn’t a case of one or the other. If the F9 vote fails, NK could just say they’re going to go it alone for now and, while they’re at it, put a bullseye squarely on B6’s most profitable routes.

If 50.1% of Spirits outstanding shares are tendered to B6, then that will proceed regardless.

B6 has received 50.1% of NK shares? Why even hold the F9 vote then?

Please reread. If they get that many shares tendered and if the shareholders as of the record date vote down the F9 proposal, then B6 can force a merger.

I know a B6/NK erger won't be the ones, but all I want is for the legacy hubs to be disrupted. Someone, somehow.

Brandon757 wrote:

I know a B6/NK erger won't be the ones, but all I want is for the legacy hubs to be disrupted. Someone, somehow.

In my opinion a B6/NK will bring a new “legacy” style carrier. Which is needed in North America.

Wneast wrote:

SoCalFlyer wrote:

So serious questions. If Jetblue is not successful in acquiring Spirit, AND they lose the NEA, what is next for them? JetBlue has an important place in the US aviation market, but if the two largest ULCCs combine, this would put pressure on them, that the may not be able to fully withstand. So, what could their potential plan B or Plan C be?

Beg someone else to buy them.

I doubt they would need to beg

sxf24 wrote:

fastmover wrote:

ZazuPIT wrote:

Are you assuming if B6 wins they will keep the same amount of seats? If so, I want some of what you are smoking. If JetBlue does win, I predict they "may" be flying 25% of NK routes within 2 years. It is naive to think they will keep many unique Spirit cities and routes. No way will B6 be able to compete in the fortress hubs of the big 4.

Nope I didn’t say that at all. But we don’t know if F9 will keep them either.

It seems like everyone thinks they will merge keep all of the city’s and all of the flights and add more and the DOJ will be like sure sure.

Just saying it’s not like there won’t be other issues but some pretend there won’t be.

We know that F9/NK would put more seats into the market than B6/NK by virtue of the different LOPAs. We also know that ULCCs compete on price, not product, and that B6 plans to raise fares to offset the higher cost of delivering the better product.

Yes and if they compete on price and the other ulcc is gone where do you think that price goes?

TYWoolman wrote:

Thomaas wrote:

ZazuPIT wrote:

Are you assuming if B6 wins they will keep the same amount of seats? If so, I want some of what you are smoking. If JetBlue does win, I predict they "may" be flying 25% of NK routes within 2 years. It is naive to think they will keep many unique Spirit cities and routes. No way will B6 be able to compete in the fortress hubs of the big 4.

How has JetBlue become one of the largest airlines at BOS & JFK without effectively competing against the legacies ?

They didn't have to worry about an effective more robust ULCC competitor across other parts of their system, that's how. And effective competition is eliminated with the NEA. An NK merger would be decided amid NEA litigations, not after.

Ok how does the NEA eliminate ulcc competition?
That’s not what it’s for it’s to challenge United and Delta in the northeast

ZazuPIT wrote:

Abeam79 wrote:

ZazuPIT wrote:

You "hear" London is doing great. Do we have any data to prove it? Regardless, they want to acquire NK to (1) get rid of a competitor, (2) get planes fast, (3) get pilots fast. As I stated before, if people believe that B6 will keep even a fraction of Spirit's route system, they are dreaming. As I and others have said, when B6 can compete in the interior of the nation, then they might be a player. They have had 20+ years to go up against the legacies and become a true national competitor. They have failed at that. The world does not revolve around NYC and BOS. I have no skin in this game, but I know desperation when I see it. JetBlue is running scared.

Ok sure, you seem to know it all.
And yes it’s doing good with London. Why do you think they are adding 3 more routes to London in the coming months from nyc and Boston.

No need to be a wise ass. I don't claim to know everything. You are propping B6 up on London alone? That's a weak defense. They have had ample time to grow internally. They blew it with Virgin, so now they are going after an airline they have no intention of maintaining it's route structure. There seems to be a lot of folks here who seem to agree with me. I'm not drinking the blue kool-aid, sorry.

It’s not so much blue juice as it is everyone in here acting like JetBlue is a failure because most of their stuff is on the east coast.

fastmover wrote:

ZazuPIT wrote:

Abeam79 wrote:

Ok sure, you seem to know it all.
And yes it’s doing good with London. Why do you think they are adding 3 more routes to London in the coming months from nyc and Boston.

No need to be a wise ass. I don't claim to know everything. You are propping B6 up on London alone? That's a weak defense. They have had ample time to grow internally. They blew it with Virgin, so now they are going after an airline they have no intention of maintaining it's route structure. There seems to be a lot of folks here who seem to agree with me. I'm not drinking the blue kool-aid, sorry.

It’s not so much blue juice as it is everyone in here acting like JetBlue is a failure because most of their stuff is on the east coast.

I used US-London as simply a moniker against your claim JetBlue doesn’t do well with competing against legacies cause that’s one of most competitive, and lucrative, routes worldwide. And that specific routes is them competing with both US and foreign legacy carriers. This is why they want to expand around the nation by aquisition of spirit, to spread that success they’ve had thus far outside the coastal corners with more breadth in size. Every JetBlue focus city has heavy legacy competition in that market, so again, your claim is a head scratcher.

fastmover wrote:

TYWoolman wrote:

Thomaas wrote:

How has JetBlue become one of the largest airlines at BOS & JFK without effectively competing against the legacies ?

They didn't have to worry about an effective more robust ULCC competitor across other parts of their system, that's how. And effective competition is eliminated with the NEA. An NK merger would be decided amid NEA litigations, not after.

Ok how does the NEA eliminate ulcc competition?
That’s not what it’s for it’s to challenge United and Delta in the northeast

I didn't mean eliminating ULCC competition when I wrote that, just implying it is anti-competitive in some perspectives. But come to think of it, essentially the NEA is AA doing the choosing on which lower cost model better serves the public at LGA rather than the DOT allocating slots in a competitive, equal level bidding process.

I have not heard any rebuttal to PREVIOUS (not today) Frontier 425 Filing (link at end of post). I suspect B6 won't for very good reason: The truth will be a hard sell.

IMO: B6 will not be consummated. Here are several reasons why…

B6 is clearly out to disrupt the merger agreement, because in the end it will accept any divestiture to get a deal done, subverting attention from the fact that most of the assets it wants to divest are integral parts of NK, thereby B6 acknowledging it already has attained them. That alone should give poise to the DOT/DOJ: what exactly is the public benefit of acquiring the REMAINING low-fare network, which you then still plan to pretty much eliminate by taking seats out and veritably raise fares to the consumer? Is the jetBlue effect really THAT compelling enough to alter the industry landscape like this? Any argument thereafter that B6 can think of, F9 has a better one, but I leave that for their 425.

Moral of the story: Divestitures proposed by B6 are in the form of infrastructure and slots with no commitments to planes, employees and associated assets, such as goodwill, branding and expectation of consistency in the market (yes, NK has goodwill and branding attributes). It would be a naive of the DOJ to consider divestiture remedies as a solution to remedy such a blatant disregard of capacity cutting (retrofitting in B6 terms) when such divestitures proposed by B6 (if that would EVEN be enough) are greatly inferior in their parts as opposed to being part of ONE vibrant, coherent network.

Therefore: Investment Firms deep down I think are agreeable to F9 as the better option because it would be clear to them that anti-trust arguments against B6 in the current industry landscape are insurmountable, especially when the DOJ knows full well that B6's arguments are better fulfilled by other alternatives so publicly displayed the last few months, namely F9 or NK’s standalone, as NK is not in distress. Good financial stewardship would be for Investment Firms to support the F9 bid, because the risk of the firm's reputation in advocating a risky regulatory hurdle (one that is insurmountable on a myriad of levels for B6) is not good financial prudence. This is why ISS has not publicly said yes to B6, just that some MAY think it a better alternative. What would individual investors think of a firm in retrospect when blaring anti-trust arguments are so clear now to investment firms, only to be educated about them in real-time during lengthy litigation a year out or more?

Have another read: wouldn’t you want B6’s answers before a vote?

https://ir.flyfrontier.com/node/8171/html

TWO KEY POINTS from 425:
#1) JetBlue admitted that it will permanently remove capacity from the market by retrofitting Spirit’s fleet to remove seats. Antitrust lawyers call that an “output restriction,” and it is fatal to JetBlue’s bid. So are JetBlue’s admitted price increases. Less airline capacity means higher fares. JetBlue’s CEO, Robin Hayes, certainly knows that. He observed just a few days ago, “The average price of air fares will go up because there is [sic] less seats.”i That is exactly what JetBlue would do with Spirit’s fleet. Indeed, in announcing its bid on April 6, JetBlue said that the acquisition would increase its profit margins, despite higher costs.

These facts—admitted higher prices and lower output—guarantee that JetBlue could never secure clearance for its proposed acquisition of Spirit. No claimed “divestitures” of airport slots or gates, or false claims or gimmicks, can fix JetBlue’s fatal problems.

#2) Antitrust law asks whether a merger is likely to substantially lessen competition. Of the key focal points of this analysis, the most prominent are the effects on output and prices. A JetBlue/Spirit combination would be doomed from the outset because JetBlue has already admitted that the acquisition would reduce capacity (output) and increase fares (prices).


IMO in closing: The DOJ will approve the once-in-a-lifetime opportunity to create a solid ULCC competitor: F9/NK. The fledging ULCC's established right after Covid have not proven themselves to make a strong case that they can pick up the slack with NK totally out of the market under B6. A standalone F9 is mostly based in the west. A strong viable ULCC (F9/NK) will drive further ULCC opportunities to the market more than a larger B6 could ever do.... or ever WANT to accomplish!

TYWoolman wrote:

Moral of the story: Divestitures proposed by B6 are in the form of infrastructure and slots with no commitments to planes, employees and associated assets, such as goodwill, branding and expectation of consistency in the market (yes, NK has goodwill and branding attributes). It would be a naive of the DOJ to consider divestiture remedies as a solution to remedy such a blatant disregard of capacity cutting (retrofitting in B6 terms) when such divestitures proposed by B6 (if that would EVEN be enough) are greatly inferior in their parts as opposed to being part of ONE vibrant, coherent network.

B6 and NK are unionized and their crews are protected by laws that do not allow termination of employment (Allegheny-Mohawk LPPs, McCaskill-Bond), moreso, B6 literally said NO FURLOUGHS.

Meanwhile besides pilots and FA, none of the frontline workers work directly for F9, therefore one can argue the loss of employees in an F9/NK is happening. F9 and NK cannot staff their pilots due to low pay and severe attrition. NK CEO said no payraises for the next 5 years publicly: https://www.forbes.com/sites/tedreed/20 ... ive-years/

And F9 reported an “excess “ of pilots.. lol..

https://centreforaviation.com/news/fron ... ge-1133926

And judging by the track record of both F9 and NK towards their employees… the future looks beyond bleak..

TYWoolman wrote:

#1) JetBlue admitted that it will permanently remove capacity from the market by retrofitting Spirit’s fleet to remove seats. Antitrust lawyers call that an “output restriction,” and it is fatal to JetBlue’s bid. So are JetBlue’s admitted price increases. Less airline capacity means higher fares. JetBlue’s CEO, Robin Hayes, certainly knows that. He observed just a few days ago, “The average price of air fares will go up because there is [sic] less seats.”i That is exactly what JetBlue would do with Spirit’s fleet. Indeed, in announcing its bid on April 6, JetBlue said that the acquisition would increase its profit margins, despite higher costs.

#2) Antitrust law asks whether a merger is likely to substantially lessen competition. Of the key focal points of this analysis, the most prominent are the effects on output and prices. A JetBlue/Spirit combination would be doomed from the outset because JetBlue has already admitted that the acquisition would reduce capacity (output) and increase fares (prices).

Lets do some critical thinking here, I find it ironic how no one is questioning F9’s management here (Indigo). They claimed they were not going to improve their offer, then they did. Then they claimed there is no pilot shortage expected, then why wouldn’t you let your biggest competitor be eliminated and grow organically? Don’t they have 200+ airbus orders? This is a huge red flag, because they are accusing B6 of becomming a monopolistic carrier that wouldn’t get approved by the DOJ, meanwhile they are doing exactly the same, effective eliminating their biggest competitor under the umbrella of synergies… in paper getting new slots and gates and plenty of planes,because of their order, without merger and organic growth sound very enticing, then why insisting? Because they want the same thing as jetblue, less competition and synergies.

TYWoolman wrote:

These facts—admitted higher prices and lower output—guarantee that JetBlue could never secure clearance for its proposed acquisition of Spirit. No claimed “divestitures” of airport slots or gates, or false claims or gimmicks, can fix JetBlue’s fatal problems.

This is variable, specially in an economy with higher fuel prices and inflation. See the past mergers post 2008.

TYWoolman wrote:

IMO in closing: The DOJ will approve the once-in-a-lifetime opportunity to create a solid ULCC competitor: F9/NK. The fledging ULCC's established right after Covid have not proven themselves to make a strong case that they can pick up the slack with NK totally out of the market under B6. A standalone F9 is mostly based in the west. A strong viable ULCC (F9/NK) will drive further ULCC opportunities to the market more than a larger B6 could ever do.... or ever WANT to accomplish!

I disagree, a major airline to keep the big 3 in check, specially in the Northeast where LCC presence is minimal, is what the traveling public need. Midwest, domestic low cost airports, and resort destinations will almost always have a way to have ULCC presence. Its the slot constrained areas and a country where 4 airlines run most of the flying that need to be challenged.

Wneast wrote:

fastmover wrote:

Wneast wrote:

Beg someone else to buy them.

I doubt they would need to beg

The question is who would buy them lol… but I have faith that JetBlue will win enough tender shares to over take NK.

Keep your eye on the ball, and the name of the ball is David Neeleman.

My money says, IF he makes a success out of Breeze (note the “if”), JetBlue is his for the taking… if he wants. So there’s two “if’s” to my theory.

With his track record in the industry, I’d be willing to bet that investors would line up behind him to finance the deal, and B6 shareholders would drop Robin and Joanna like a hot potato, ESPECIALLY if the Spirit acquisition fails. If they can’t close the NK deal, I’m willing to bet there will be a high-level shakeup at B6.

I saw an article in a Utah publication calling Neeleman the Steve Jobs of the skies. The comparison would become especially fitting if Neeleman once again wound up back in charge of the company he was forced out of a la Jobs and Apple.

The challenge I’m having with what you’ve written is that it seems to be a mix of what objectively could happen combined with what you wish/hope will happen.

TYWoolman wrote:

I have not heard any rebuttal to PREVIOUS (not today) Frontier 425 Filing (link at end of post). I suspect B6 won't for very good reason: The truth will be a hard sell.

That document was not a great look. It was undisciplined and petty and will cause at least some investors to question the maturity of the leadership team that put that out. There are good points in the document but they risk being overshadowed. I understand why, if you want the NK/F9 merger to go through you will like that document, but that’s not the intended audience. Obviously this won’t derail any deal, but that document is not the holy grail that you would like it to be because it aligns with the deal that you prefer.

TYWoolman wrote:

IMO: B6 will not be consummated. Here are several reasons why…

B6 is clearly out to disrupt the merger agreement, because in the end it will accept any divestiture to get a deal done,

.
I have no idea what this means? Disrupt what merger agreement? NK/F9? You’re asserting that B6 has no interest in NK, it only cares about preventing the NK/F9 merger? I’ve seen no evidence that B6 doesn’t have it’s own inorganic growth interests.

TYWoolman wrote:

subverting attention from the fact that most of the assets it wants to divest are integral parts of NK, thereby B6 acknowledging it already has attained them. That alone should give poise to the DOT/DOJ: what exactly is the public benefit of acquiring the REMAINING low-fare network, which you then still plan to pretty much eliminate by taking seats out and veritably raise fares to the consumer? Is the jetBlue effect really THAT compelling enough to alter the industry landscape like this? Any argument thereafter that B6 can think of, F9 has a better one, but I leave that for their 425.

There has been very little specificity about B6 wanting to divest anything. Do you have the list of airports/gates/flights that B6 “wants” to divest?

TYWoolman wrote:

Moral of the story: Divestitures proposed by B6 are in the form of infrastructure and slots with no commitments to planes, employees and associated assets, such as goodwill, branding and expectation of consistency in the market (yes, NK has goodwill and branding attributes). It would be a naive of the DOJ to consider divestiture remedies as a solution to remedy such a blatant disregard of capacity cutting (retrofitting in B6 terms) when such divestitures proposed by B6 (if that would EVEN be enough) are greatly inferior in their parts as opposed to being part of ONE vibrant, coherent network.

Respectfully, it discredits your position on the B6/NK merger as being anti-competitive while simultaneously waxing poetic about the benefits of ONE vibrant, coherent network. Your assertions that NK/F9 won’t raise prices because their customers will demand it is naive. They’re for-profit businesses and moving from two ULCC to one is absolutely going to result in price increases.

TYWoolman wrote:

Therefore: Investment Firms deep down I think are agreeable to F9 as the better option because it would be clear to them that anti-trust arguments against B6 in the current industry landscape are insurmountable, especially when the DOJ knows full well that B6's arguments are better fulfilled by other alternatives so publicly displayed the last few months, namely F9 or NK’s standalone, as NK is not in distress.

I think you hope/wish that investment firms “deep down” are agreeable to F9 as the better option.

TYWoolman wrote:

Good financial stewardship would be for Investment Firms to support the F9 bid, because the risk of the firm's reputation in advocating a risky regulatory hurdle (one that is insurmountable on a myriad of levels for B6) is not good financial prudence.

This is just not plausible, as has been previously discussed.

TYWoolman wrote:

This is why ISS has not publicly said yes to B6, just that some MAY think it a better alternative. What would individual investors think of a firm in retrospect when blaring anti-trust arguments are so clear now to investment firms, only to be educated about them in real-time during lengthy litigation a year out or more?

Again, this is what you hope/wish about ISS.

TYWoolman wrote:

Have another read: wouldn’t you want B6’s answers before a vote?

https://ir.flyfrontier.com/node/8171/html


TWO KEY POINTS from 425:
#1) JetBlue admitted that it will permanently remove capacity from the market by retrofitting Spirit’s fleet to remove seats. Antitrust lawyers call that an “output restriction,” and it is fatal to JetBlue’s bid. So are JetBlue’s admitted price increases. Less airline capacity means higher fares. JetBlue’s CEO, Robin Hayes, certainly knows that. He observed just a few days ago, “The average price of air fares will go up because there is [sic] less seats.”i That is exactly what JetBlue would do with Spirit’s fleet. Indeed, in announcing its bid on April 6, JetBlue said that the acquisition would increase its profit margins, despite higher costs.

These facts—admitted higher prices and lower output—guarantee that JetBlue could never secure clearance for its proposed acquisition of Spirit. No claimed “divestitures” of airport slots or gates, or false claims or gimmicks, can fix JetBlue’s fatal problems.

This doesn’t guarantee anything. Again, I think you hope/wish this but there is absolutely no guarantee. In fact, I would say that an approval with divestitures of some sort is significantly more likely.

TYWoolman wrote:

#2) Antitrust law asks whether a merger is likely to substantially lessen competition. Of the key focal points of this analysis, the most prominent are the effects on output and prices. A JetBlue/Spirit combination would be doomed from the outset because JetBlue has already admitted that the acquisition would reduce capacity (output) and increase fares (prices).


IMO in closing: The DOJ will approve the once-in-a-lifetime opportunity to create a solid ULCC competitor: F9/NK. The fledging ULCC's established right after Covid have not proven themselves to make a strong case that they can pick up the slack with NK totally out of the market under B6. A standalone F9 is mostly based in the west. A strong viable ULCC (F9/NK) will drive further ULCC opportunities to the market more than a larger B6 could ever do.... or ever WANT to accomplish!

Divestitures as a remedy for flights doesn’t mean that the routes won’t be flown. Divestitures enable other carriers to fly routes to increase competition. There seems to be an underlying assumption about B6/NK divestitures are gone forever. No. It means that other carriers, including F9 or anyone else can pick up the assets.

As Iv’e said, I think that B6 is out over its skis from a debt standpoint and I’m concerned that integration of process/IT will be a distraction. But we should try to discuss facts as we know them distinctly from what we want / wish to happen.

tlecam wrote:

The challenge I’m having with what you’ve written is that it seems to be a mix of what objectively could happen combined with what you wish/hope will happen.

TYWoolman wrote:

I have not heard any rebuttal to PREVIOUS (not today) Frontier 425 Filing (link at end of post). I suspect B6 won't for very good reason: The truth will be a hard sell.

That document was not a great look. It was undisciplined and petty and will cause at least some investors to question the maturity of the leadership team that put that out. There are good points in the document but they risk being overshadowed. I understand why, if you want the NK/F9 merger to go through you will like that document, but that’s not the intended audience. Obviously this won’t derail any deal, but that document is not the holy grail that you would like it to be because it aligns with the deal that you prefer.

TYWoolman wrote:

IMO: B6 will not be consummated. Here are several reasons why…

B6 is clearly out to disrupt the merger agreement, because in the end it will accept any divestiture to get a deal done,

.
I have no idea what this means? Disrupt what merger agreement? NK/F9? You’re asserting that B6 has no interest in NK, it only cares about preventing the NK/F9 merger? I’ve seen no evidence that B6 doesn’t have it’s own inorganic growth interests.

TYWoolman wrote:

subverting attention from the fact that most of the assets it wants to divest are integral parts of NK, thereby B6 acknowledging it already has attained them. That alone should give poise to the DOT/DOJ: what exactly is the public benefit of acquiring the REMAINING low-fare network, which you then still plan to pretty much eliminate by taking seats out and veritably raise fares to the consumer? Is the jetBlue effect really THAT compelling enough to alter the industry landscape like this? Any argument thereafter that B6 can think of, F9 has a better one, but I leave that for their 425.

There has been very little specificity about B6 wanting to divest anything. Do you have the list of airports/gates/flights that B6 “wants” to divest?

TYWoolman wrote:

Moral of the story: Divestitures proposed by B6 are in the form of infrastructure and slots with no commitments to planes, employees and associated assets, such as goodwill, branding and expectation of consistency in the market (yes, NK has goodwill and branding attributes). It would be a naive of the DOJ to consider divestiture remedies as a solution to remedy such a blatant disregard of capacity cutting (retrofitting in B6 terms) when such divestitures proposed by B6 (if that would EVEN be enough) are greatly inferior in their parts as opposed to being part of ONE vibrant, coherent network.

Respectfully, it discredits your position on the B6/NK merger as being anti-competitive while simultaneously waxing poetic about the benefits of ONE vibrant, coherent network. Your assertions that NK/F9 won’t raise prices because their customers will demand it is naive. They’re for-profit businesses and moving from two ULCC to one is absolutely going to result in price increases.

TYWoolman wrote:

Therefore: Investment Firms deep down I think are agreeable to F9 as the better option because it would be clear to them that anti-trust arguments against B6 in the current industry landscape are insurmountable, especially when the DOJ knows full well that B6's arguments are better fulfilled by other alternatives so publicly displayed the last few months, namely F9 or NK’s standalone, as NK is not in distress.

I think you hope/wish that investment firms “deep down” are agreeable to F9 as the better option.

TYWoolman wrote:

Good financial stewardship would be for Investment Firms to support the F9 bid, because the risk of the firm's reputation in advocating a risky regulatory hurdle (one that is insurmountable on a myriad of levels for B6) is not good financial prudence.

This is just not plausible, as has been previously discussed.

TYWoolman wrote:

This is why ISS has not publicly said yes to B6, just that some MAY think it a better alternative. What would individual investors think of a firm in retrospect when blaring anti-trust arguments are so clear now to investment firms, only to be educated about them in real-time during lengthy litigation a year out or more?

Again, this is what you hope/wish about ISS.

TYWoolman wrote:

Have another read: wouldn’t you want B6’s answers before a vote?

https://ir.flyfrontier.com/node/8171/html


TWO KEY POINTS from 425:
#1) JetBlue admitted that it will permanently remove capacity from the market by retrofitting Spirit’s fleet to remove seats. Antitrust lawyers call that an “output restriction,” and it is fatal to JetBlue’s bid. So are JetBlue’s admitted price increases. Less airline capacity means higher fares. JetBlue’s CEO, Robin Hayes, certainly knows that. He observed just a few days ago, “The average price of air fares will go up because there is [sic] less seats.”i That is exactly what JetBlue would do with Spirit’s fleet. Indeed, in announcing its bid on April 6, JetBlue said that the acquisition would increase its profit margins, despite higher costs.

These facts—admitted higher prices and lower output—guarantee that JetBlue could never secure clearance for its proposed acquisition of Spirit. No claimed “divestitures” of airport slots or gates, or false claims or gimmicks, can fix JetBlue’s fatal problems.

This doesn’t guarantee anything. Again, I think you hope/wish this but there is absolutely no guarantee. In fact, I would say that an approval with divestitures of some sort is significantly more likely.

TYWoolman wrote:

#2) Antitrust law asks whether a merger is likely to substantially lessen competition. Of the key focal points of this analysis, the most prominent are the effects on output and prices. A JetBlue/Spirit combination would be doomed from the outset because JetBlue has already admitted that the acquisition would reduce capacity (output) and increase fares (prices).


IMO in closing: The DOJ will approve the once-in-a-lifetime opportunity to create a solid ULCC competitor: F9/NK. The fledging ULCC's established right after Covid have not proven themselves to make a strong case that they can pick up the slack with NK totally out of the market under B6. A standalone F9 is mostly based in the west. A strong viable ULCC (F9/NK) will drive further ULCC opportunities to the market more than a larger B6 could ever do.... or ever WANT to accomplish!

Divestitures as a remedy for flights doesn’t mean that the routes won’t be flown. Divestitures enable other carriers to fly routes to increase competition. There seems to be an underlying assumption about B6/NK divestitures are gone forever. No. It means that other carriers, including F9 or anyone else can pick up the assets.

As Iv’e said, I think that B6 is out over its skis from a debt standpoint and I’m concerned that integration of process/IT will be a distraction. But we should try to discuss facts as we know them distinctly from what we want / wish to happen.

These are my opinion, as yours, yours. Why constantly state that? This is a forum of opinion. Your opinion is valid and appreciate it. If B6 finds NK such a complementary fit, then why propose to divest their most important assets that alternatively would contribute to better shareholder upswing in a combined F9/NK? IMO reason: they will accept ANYTHING at the end of the day (thus there hefty RTF) to disrupt F9's merger agreement. Anything is better than nothing, having done their greatest accomplishment: again, to kill the F9 merger agreement. F9 put that in to keep apples to apples. Of course there are similar regulatory standards set by DOJ, but that doesn't mean at all similar DOJ outcomes.

Do you really think DOJ will consider divestitures the cure-all for B6's "jetBlue effect" case while killing half the ULCC capacity?

santi319 wrote:

TYWoolman wrote:

Moral of the story: Divestitures proposed by B6 are in the form of infrastructure and slots with no commitments to planes, employees and associated assets, such as goodwill, branding and expectation of consistency in the market (yes, NK has goodwill and branding attributes). It would be a naive of the DOJ to consider divestiture remedies as a solution to remedy such a blatant disregard of capacity cutting (retrofitting in B6 terms) when such divestitures proposed by B6 (if that would EVEN be enough) are greatly inferior in their parts as opposed to being part of ONE vibrant, coherent network.

B6 and NK are unionized and their crews are protected by laws that do not allow termination of employment (Allegheny-Mohawk LPPs, McCaskill-Bond), moreso, B6 literally said NO FURLOUGHS.

Meanwhile besides pilots and FA, none of the frontline workers work directly for F9, therefore one can argue the loss of employees in an F9/NK is happening. F9 and NK cannot staff their pilots due to low pay and severe attrition. NK CEO said no payraises for the next 5 years publicly: https://www.forbes.com/sites/tedreed/20 ... ive-years/

And F9 reported an “excess “ of pilots.. lol..

https://centreforaviation.com/news/fron ... ge-1133926

And judging by the track record of both F9 and NK towards their employees… the future looks beyond bleak..

TYWoolman wrote:

#1) JetBlue admitted that it will permanently remove capacity from the market by retrofitting Spirit’s fleet to remove seats. Antitrust lawyers call that an “output restriction,” and it is fatal to JetBlue’s bid. So are JetBlue’s admitted price increases. Less airline capacity means higher fares. JetBlue’s CEO, Robin Hayes, certainly knows that. He observed just a few days ago, “The average price of air fares will go up because there is [sic] less seats.”i That is exactly what JetBlue would do with Spirit’s fleet. Indeed, in announcing its bid on April 6, JetBlue said that the acquisition would increase its profit margins, despite higher costs.

#2) Antitrust law asks whether a merger is likely to substantially lessen competition. Of the key focal points of this analysis, the most prominent are the effects on output and prices. A JetBlue/Spirit combination would be doomed from the outset because JetBlue has already admitted that the acquisition would reduce capacity (output) and increase fares (prices).

Lets do some critical thinking here, I find it ironic how no one is questioning F9’s management here (Indigo). They claimed they were not going to improve their offer, then they did. Then they claimed there is no pilot shortage expected, then why wouldn’t you let your biggest competitor be eliminated and grow organically? Don’t they have 200+ airbus orders? This is a huge red flag, because they are accusing B6 of becomming a monopolistic carrier that wouldn’t get approved by the DOJ, meanwhile they are doing exactly the same, effective eliminating their biggest competitor under the umbrella of synergies… in paper getting new slots and gates and plenty of planes,because of their order, without merger and organic growth sound very enticing, then why insisting? Because they want the same thing as jetblue, less competition and synergies.

TYWoolman wrote:

These facts—admitted higher prices and lower output—guarantee that JetBlue could never secure clearance for its proposed acquisition of Spirit. No claimed “divestitures” of airport slots or gates, or false claims or gimmicks, can fix JetBlue’s fatal problems.

This is variable, specially in an economy with higher fuel prices and inflation. See the past mergers post 2008.

TYWoolman wrote:

IMO in closing: The DOJ will approve the once-in-a-lifetime opportunity to create a solid ULCC competitor: F9/NK. The fledging ULCC's established right after Covid have not proven themselves to make a strong case that they can pick up the slack with NK totally out of the market under B6. A standalone F9 is mostly based in the west. A strong viable ULCC (F9/NK) will drive further ULCC opportunities to the market more than a larger B6 could ever do.... or ever WANT to accomplish!

I disagree, a major airline to keep the big 3 in check, specially in the Northeast where LCC presence is minimal, is what the traveling public need. Midwest, domestic low cost airports, and resort destinations will almost always have a way to have ULCC presence. Its the slot constrained areas and a country where 4 airlines run most of the flying that need to be challenged.

Let's do more critical thinking:
1) B6 will never have the scope and breadth to even semi-compete with what a legacy has to offer. NK CANNOT help them with that argument. And squandering ULCC capacity to accomplish that does not make a good merger case. A combined F9/NK, on the other hand, would certainly bring competition to the legacies because their track record, compared to B6, is more consistent nationwide to do just that. With due respect, what predominant successes has B6 achieved outside the opportunistic vacuum TWA left at JFK and the unprecedented legacy turmoil post 2001? (Yes, Boston was one of an organic growth strategy and should be commended!!) But B6 is betting on borrowed slots, "BORROWED", to further their corporate mission. Furthermore, in bringing more competition to the legacies: DOJ can remedy that quite nicely with contingent NEA approval via LGA slot divestitures to a combined F9/NK. But it’s the combination of the two that B6 fears, not a standalone F9, hence their divestiture commitment proposal is an easy pill to swallow. F9/NK combined will have many successes and future opportunities to further increase competition in legacy hubs given the unprecedented larger scale a combination would make. B6 has squandered every organic opportunity to go west and out of their comfort zones because they cannot compete. The only way they can is to eliminate ULCC competition. Case in point their NK ambition. Certainly, B6 wouldn't be incentivized to set up shop in any AA hub/focus city, but that's irrelevant right now.

Whatsmore, the F9/NK combination will incentivize and welcome additional ULCCs to the market, as ULCC infiltration really is an untapped market; a very huge part of the future with the middle-class getting squeezed, in addition to increasing demographics reaching out of poverty. Not to mention the "work from home" model appealing to startups that would find their employees combining leisure with business travel (unsubsidized by the employer). More ULCC competition will not be as incentivized by a larger B6, and if it does incentivize it, they know that capacity constrained northeast airports will help keep them at bay, which is another reason NEA is anti-competitive (AA shouldn't be choosing LGA winners) and why B6 finds comfort there.

2)Piece-mealing divestitures would not have nearly the affect the DOJ may think it would UNLESS it was kept within one larger network framework: namely a combined F9/NK. Especially when considering the start-up costs in such a tight labor market. It would prove difficult for most ULCCs who are better capable of injecting that competition.

3) F9/NK combined will have no effect on employment prospects as you suggest (nor B6 for that matter), so long as the market provides them. But employment is employment, regardless of who does it. 3rd party may better supply it, which may put B6 at greater disadvantage then.

The current administration is allowing CP-KCS. That right there should give jetblue ammunition against the government re: merger and NEA.

Does anyone think the lower seniority flight crews will jump ship and apply at F9 or any other Airbus carrier. If this get approved tomorrow??

sunking737 wrote:

Does anyone think the lower seniority flight crews will jump ship and apply at F9 or any other Airbus carrier. If this get approved tomorrow??

No.

If someone leaves NK, B6, or F9 they are almost going to the big 3 or the 2 cargo carriers.

N757ST wrote:

The current administration is allowing CP-KCS. That right there should give jetblue ammunition against the government re: merger and NEA.

https://www.freightwaves.com/news/canad ... cquisition

Not so fast. Found this but no approval article. In any event, that looks like it was not without hiccups, and the long approval process does add uncertainty for their shareholders.

sunking737 wrote:

Does anyone think the lower seniority flight crews will jump ship and apply at F9 or any other Airbus carrier. If this get approved tomorrow??

Why would they go only to another Airbus carrier? It doesn’t matter what type ratings you hold when you switch airlines. And why on earth would anyone at spirit or jetblue go to frontier? That place is a dumpster fire. There will be attrition from all 3 (B6/NK/F9) regardless of how the merger shakes out to DL/UA/AA and some to FDX/UPS and a tiny amount to WN. And there is now some attrition at the US3 airlines back and forth. Pilot Pete from the bachelor left delta for United, for example.

TYWoolman wrote:

santi319 wrote:

TYWoolman wrote:

Moral of the story: Divestitures proposed by B6 are in the form of infrastructure and slots with no commitments to planes, employees and associated assets, such as goodwill, branding and expectation of consistency in the market (yes, NK has goodwill and branding attributes). It would be a naive of the DOJ to consider divestiture remedies as a solution to remedy such a blatant disregard of capacity cutting (retrofitting in B6 terms) when such divestitures proposed by B6 (if that would EVEN be enough) are greatly inferior in their parts as opposed to being part of ONE vibrant, coherent network.

B6 and NK are unionized and their crews are protected by laws that do not allow termination of employment (Allegheny-Mohawk LPPs, McCaskill-Bond), moreso, B6 literally said NO FURLOUGHS.

Meanwhile besides pilots and FA, none of the frontline workers work directly for F9, therefore one can argue the loss of employees in an F9/NK is happening. F9 and NK cannot staff their pilots due to low pay and severe attrition. NK CEO said no payraises for the next 5 years publicly: https://www.forbes.com/sites/tedreed/20 ... ive-years/

And F9 reported an “excess “ of pilots.. lol..

https://centreforaviation.com/news/fron ... ge-1133926

And judging by the track record of both F9 and NK towards their employees… the future looks beyond bleak..

TYWoolman wrote:

#1) JetBlue admitted that it will permanently remove capacity from the market by retrofitting Spirit’s fleet to remove seats. Antitrust lawyers call that an “output restriction,” and it is fatal to JetBlue’s bid. So are JetBlue’s admitted price increases. Less airline capacity means higher fares. JetBlue’s CEO, Robin Hayes, certainly knows that. He observed just a few days ago, “The average price of air fares will go up because there is [sic] less seats.”i That is exactly what JetBlue would do with Spirit’s fleet. Indeed, in announcing its bid on April 6, JetBlue said that the acquisition would increase its profit margins, despite higher costs.

#2) Antitrust law asks whether a merger is likely to substantially lessen competition. Of the key focal points of this analysis, the most prominent are the effects on output and prices. A JetBlue/Spirit combination would be doomed from the outset because JetBlue has already admitted that the acquisition would reduce capacity (output) and increase fares (prices).

Lets do some critical thinking here, I find it ironic how no one is questioning F9’s management here (Indigo). They claimed they were not going to improve their offer, then they did. Then they claimed there is no pilot shortage expected, then why wouldn’t you let your biggest competitor be eliminated and grow organically? Don’t they have 200+ airbus orders? This is a huge red flag, because they are accusing B6 of becomming a monopolistic carrier that wouldn’t get approved by the DOJ, meanwhile they are doing exactly the same, effective eliminating their biggest competitor under the umbrella of synergies… in paper getting new slots and gates and plenty of planes,because of their order, without merger and organic growth sound very enticing, then why insisting? Because they want the same thing as jetblue, less competition and synergies.

TYWoolman wrote:

These facts—admitted higher prices and lower output—guarantee that JetBlue could never secure clearance for its proposed acquisition of Spirit. No claimed “divestitures” of airport slots or gates, or false claims or gimmicks, can fix JetBlue’s fatal problems.

This is variable, specially in an economy with higher fuel prices and inflation. See the past mergers post 2008.

TYWoolman wrote:

IMO in closing: The DOJ will approve the once-in-a-lifetime opportunity to create a solid ULCC competitor: F9/NK. The fledging ULCC's established right after Covid have not proven themselves to make a strong case that they can pick up the slack with NK totally out of the market under B6. A standalone F9 is mostly based in the west. A strong viable ULCC (F9/NK) will drive further ULCC opportunities to the market more than a larger B6 could ever do.... or ever WANT to accomplish!

I disagree, a major airline to keep the big 3 in check, specially in the Northeast where LCC presence is minimal, is what the traveling public need. Midwest, domestic low cost airports, and resort destinations will almost always have a way to have ULCC presence. Its the slot constrained areas and a country where 4 airlines run most of the flying that need to be challenged.

Let's do more critical thinking:
1) B6 will never have the scope and breadth to even semi-compete with what a legacy has to offer. NK CANNOT help them with that argument. And squandering ULCC capacity to accomplish that does not make a good merger case. A combined F9/NK, on the other hand, would certainly bring competition to the legacies because their track record, compared to B6, is more consistent nationwide to do just that. With due respect, what predominant successes has B6 achieved outside the opportunistic vacuum TWA left at JFK and the unprecedented legacy turmoil post 2001? (Yes, Boston was one of an organic growth strategy and should be commended!!) But B6 is betting on borrowed slots, "BORROWED", to further their corporate mission. Furthermore, in bringing more competition to the legacies: DOJ can remedy that quite nicely with contingent NEA approval via LGA slot divestitures to a combined F9/NK. But it’s the combination of the two that B6 fears, not a standalone F9, hence their divestiture commitment proposal is an easy pill to swallow. F9/NK combined will have many successes and future opportunities to further increase competition in legacy hubs given the unprecedented larger scale a combination would make. B6 has squandered every organic opportunity to go west and out of their comfort zones because they cannot compete. The only way they can is to eliminate ULCC competition. Case in point their NK ambition. Certainly, B6 wouldn't be incentivized to set up shop in any AA hub/focus city, but that's irrelevant right now.

Whatsmore, the F9/NK combination will incentivize and welcome additional ULCCs to the market, as ULCC infiltration really is an untapped market; a very huge part of the future with the middle-class getting squeezed, in addition to increasing demographics reaching out of poverty. Not to mention the "work from home" model appealing to startups that would find their employees combining leisure with business travel (unsubsidized by the employer). More ULCC competition will not be as incentivized by a larger B6, and if it does incentivize it, they know that capacity constrained northeast airports will help keep them at bay, which is another reason NEA is anti-competitive (AA shouldn't be choosing LGA winners) and why B6 finds comfort there.

2)Piece-mealing divestitures would not have nearly the affect the DOJ may think it would UNLESS it was kept within one larger network framework: namely a combined F9/NK. Especially when considering the start-up costs in such a tight labor market. It would prove difficult for most ULCCs who are better capable of injecting that competition.

3) F9/NK combined will have no effect on employment prospects as you suggest (nor B6 for that matter), so long as the market provides them. But employment is employment, regardless of who does it. 3rd party may better supply it, which may put B6 at greater disadvantage then.

Ty, I thought you didn’t have a crystal ball. You sure seem to be conjuring something when you know how the DOJ is misreading things that haven’t even happened yet.

TYWoolman wrote:

tlecam wrote:

The challenge I’m having with what you’ve written is that it seems to be a mix of what objectively could happen combined with what you wish/hope will happen.

TYWoolman wrote:

I have not heard any rebuttal to PREVIOUS (not today) Frontier 425 Filing (link at end of post). I suspect B6 won't for very good reason: The truth will be a hard sell.

That document was not a great look. It was undisciplined and petty and will cause at least some investors to question the maturity of the leadership team that put that out. There are good points in the document but they risk being overshadowed. I understand why, if you want the NK/F9 merger to go through you will like that document, but that’s not the intended audience. Obviously this won’t derail any deal, but that document is not the holy grail that you would like it to be because it aligns with the deal that you prefer.

TYWoolman wrote:

IMO: B6 will not be consummated. Here are several reasons why…

B6 is clearly out to disrupt the merger agreement, because in the end it will accept any divestiture to get a deal done,

.
I have no idea what this means? Disrupt what merger agreement? NK/F9? You’re asserting that B6 has no interest in NK, it only cares about preventing the NK/F9 merger? I’ve seen no evidence that B6 doesn’t have it’s own inorganic growth interests.

TYWoolman wrote:

subverting attention from the fact that most of the assets it wants to divest are integral parts of NK, thereby B6 acknowledging it already has attained them. That alone should give poise to the DOT/DOJ: what exactly is the public benefit of acquiring the REMAINING low-fare network, which you then still plan to pretty much eliminate by taking seats out and veritably raise fares to the consumer? Is the jetBlue effect really THAT compelling enough to alter the industry landscape like this? Any argument thereafter that B6 can think of, F9 has a better one, but I leave that for their 425.

There has been very little specificity about B6 wanting to divest anything. Do you have the list of airports/gates/flights that B6 “wants” to divest?

TYWoolman wrote:

Moral of the story: Divestitures proposed by B6 are in the form of infrastructure and slots with no commitments to planes, employees and associated assets, such as goodwill, branding and expectation of consistency in the market (yes, NK has goodwill and branding attributes). It would be a naive of the DOJ to consider divestiture remedies as a solution to remedy such a blatant disregard of capacity cutting (retrofitting in B6 terms) when such divestitures proposed by B6 (if that would EVEN be enough) are greatly inferior in their parts as opposed to being part of ONE vibrant, coherent network.

Respectfully, it discredits your position on the B6/NK merger as being anti-competitive while simultaneously waxing poetic about the benefits of ONE vibrant, coherent network. Your assertions that NK/F9 won’t raise prices because their customers will demand it is naive. They’re for-profit businesses and moving from two ULCC to one is absolutely going to result in price increases.

TYWoolman wrote:

Therefore: Investment Firms deep down I think are agreeable to F9 as the better option because it would be clear to them that anti-trust arguments against B6 in the current industry landscape are insurmountable, especially when the DOJ knows full well that B6's arguments are better fulfilled by other alternatives so publicly displayed the last few months, namely F9 or NK’s standalone, as NK is not in distress.

I think you hope/wish that investment firms “deep down” are agreeable to F9 as the better option.

TYWoolman wrote:

Good financial stewardship would be for Investment Firms to support the F9 bid, because the risk of the firm's reputation in advocating a risky regulatory hurdle (one that is insurmountable on a myriad of levels for B6) is not good financial prudence.

This is just not plausible, as has been previously discussed.

TYWoolman wrote:

This is why ISS has not publicly said yes to B6, just that some MAY think it a better alternative. What would individual investors think of a firm in retrospect when blaring anti-trust arguments are so clear now to investment firms, only to be educated about them in real-time during lengthy litigation a year out or more?

Again, this is what you hope/wish about ISS.

TYWoolman wrote:

Have another read: wouldn’t you want B6’s answers before a vote?

https://ir.flyfrontier.com/node/8171/html


TWO KEY POINTS from 425:
#1) JetBlue admitted that it will permanently remove capacity from the market by retrofitting Spirit’s fleet to remove seats. Antitrust lawyers call that an “output restriction,” and it is fatal to JetBlue’s bid. So are JetBlue’s admitted price increases. Less airline capacity means higher fares. JetBlue’s CEO, Robin Hayes, certainly knows that. He observed just a few days ago, “The average price of air fares will go up because there is [sic] less seats.”i That is exactly what JetBlue would do with Spirit’s fleet. Indeed, in announcing its bid on April 6, JetBlue said that the acquisition would increase its profit margins, despite higher costs.

These facts—admitted higher prices and lower output—guarantee that JetBlue could never secure clearance for its proposed acquisition of Spirit. No claimed “divestitures” of airport slots or gates, or false claims or gimmicks, can fix JetBlue’s fatal problems.

This doesn’t guarantee anything. Again, I think you hope/wish this but there is absolutely no guarantee. In fact, I would say that an approval with divestitures of some sort is significantly more likely.

TYWoolman wrote:

#2) Antitrust law asks whether a merger is likely to substantially lessen competition. Of the key focal points of this analysis, the most prominent are the effects on output and prices. A JetBlue/Spirit combination would be doomed from the outset because JetBlue has already admitted that the acquisition would reduce capacity (output) and increase fares (prices).


IMO in closing: The DOJ will approve the once-in-a-lifetime opportunity to create a solid ULCC competitor: F9/NK. The fledging ULCC's established right after Covid have not proven themselves to make a strong case that they can pick up the slack with NK totally out of the market under B6. A standalone F9 is mostly based in the west. A strong viable ULCC (F9/NK) will drive further ULCC opportunities to the market more than a larger B6 could ever do.... or ever WANT to accomplish!

Divestitures as a remedy for flights doesn’t mean that the routes won’t be flown. Divestitures enable other carriers to fly routes to increase competition. There seems to be an underlying assumption about B6/NK divestitures are gone forever. No. It means that other carriers, including F9 or anyone else can pick up the assets.

As Iv’e said, I think that B6 is out over its skis from a debt standpoint and I’m concerned that integration of process/IT will be a distraction. But we should try to discuss facts as we know them distinctly from what we want / wish to happen.

These are my opinion, as yours, yours. Why constantly state that? This is a forum of opinion. Your opinion is valid and appreciate it. If B6 finds NK such a complementary fit, then why propose to divest their most important assets that alternatively would contribute to better shareholder upswing in a combined F9/NK? IMO reason: they will accept ANYTHING at the end of the day (thus there hefty RTF) to disrupt F9's merger agreement. Anything is better than nothing, having done their greatest accomplishment: again, to kill the F9 merger agreement. F9 put that in to keep apples to apples. Of course there are similar regulatory standards set by DOJ, but that doesn't mean at all similar DOJ outcomes.

Do you really think DOJ will consider divestitures the cure-all for B6's "jetBlue effect" case while killing half the ULCC capacity?

Ok, my apologies. Your writing style doesn’t always jump out at me as you offering opinion; you state a lot of things with certainty as facts or foregone conclusions (e.g. “guarantee that JetBlue could never…”) that I don’t typically encounter in opinions.

As for your question, I reject the notion that a B6/NK merger kills half the ULCC capacity. It kills 1 of the 2 ULCC pure play airlines. As has been mentioned now multiple times, there are other ways that low cost capacity is provided - basic economy etc…

Since I disagree with the underlying premise (which is your opinion), it’s hard for me to offer mine.

tlecam wrote:

TYWoolman wrote:

tlecam wrote:

The challenge I’m having with what you’ve written is that it seems to be a mix of what objectively could happen combined with what you wish/hope will happen.



That document was not a great look. It was undisciplined and petty and will cause at least some investors to question the maturity of the leadership team that put that out. There are good points in the document but they risk being overshadowed. I understand why, if you want the NK/F9 merger to go through you will like that document, but that’s not the intended audience. Obviously this won’t derail any deal, but that document is not the holy grail that you would like it to be because it aligns with the deal that you prefer.


.
I have no idea what this means? Disrupt what merger agreement? NK/F9? You’re asserting that B6 has no interest in NK, it only cares about preventing the NK/F9 merger? I’ve seen no evidence that B6 doesn’t have it’s own inorganic growth interests.



There has been very little specificity about B6 wanting to divest anything. Do you have the list of airports/gates/flights that B6 “wants” to divest?



Respectfully, it discredits your position on the B6/NK merger as being anti-competitive while simultaneously waxing poetic about the benefits of ONE vibrant, coherent network. Your assertions that NK/F9 won’t raise prices because their customers will demand it is naive. They’re for-profit businesses and moving from two ULCC to one is absolutely going to result in price increases.



I think you hope/wish that investment firms “deep down” are agreeable to F9 as the better option.


This is just not plausible, as has been previously discussed.



Again, this is what you hope/wish about ISS.



This doesn’t guarantee anything. Again, I think you hope/wish this but there is absolutely no guarantee. In fact, I would say that an approval with divestitures of some sort is significantly more likely.



Divestitures as a remedy for flights doesn’t mean that the routes won’t be flown. Divestitures enable other carriers to fly routes to increase competition. There seems to be an underlying assumption about B6/NK divestitures are gone forever. No. It means that other carriers, including F9 or anyone else can pick up the assets.

As Iv’e said, I think that B6 is out over its skis from a debt standpoint and I’m concerned that integration of process/IT will be a distraction. But we should try to discuss facts as we know them distinctly from what we want / wish to happen.

These are my opinion, as yours, yours. Why constantly state that? This is a forum of opinion. Your opinion is valid and appreciate it. If B6 finds NK such a complementary fit, then why propose to divest their most important assets that alternatively would contribute to better shareholder upswing in a combined F9/NK? IMO reason: they will accept ANYTHING at the end of the day (thus there hefty RTF) to disrupt F9's merger agreement. Anything is better than nothing, having done their greatest accomplishment: again, to kill the F9 merger agreement. F9 put that in to keep apples to apples. Of course there are similar regulatory standards set by DOJ, but that doesn't mean at all similar DOJ outcomes.

Do you really think DOJ will consider divestitures the cure-all for B6's "jetBlue effect" case while killing half the ULCC capacity?

Ok, my apologies. Your writing style doesn’t always jump out at me as you offering opinion; you state a lot of things with certainty as facts or foregone conclusions (e.g. “guarantee that JetBlue could never…”) that I don’t typically encounter in opinions.

As for your question, I reject the notion that a B6/NK merger kills half the ULCC capacity. It kills 1 of the 2 ULCC pure play airlines. As has been mentioned now multiple times, there are other ways that low cost capacity is provided - basic economy etc…

Since I disagree with the underlying premise (which is your opinion), it’s hard for me to offer mine.

I will try better. Your style is smooth and to the point. Mine tends to be a bit wordy. So...I'll try for your opinion again...Do you think a B6 acquisition of NK will inhibit ULCC capacity pricing-pressure since 1 of the 2 pure play airlines will be gone despite 1) basic economy offered by legacies not having that additional NK pricing pressure and 2) despite the migration of NK assets to a higher-than-ULCC cost model under B6?

Yes, all carriers are products of mergers. But all subsequent mergers from the one before it provide rationalization to the market and each new entity gets smaller from the two parts. NEA acts like a de facto merger (DOJ words) via rationalization in a competitive market (anti-competitive in of itself), and at the same time both carriers are then free to dispense capacity freed by that rationalization elsewhere across the U.S., and, in addition, without any oversight if both are actually incentivized to compete with each other outside the NEA scope. That is for the lack of a better word, unfair, because what option does DL and UA have to piggy-back a lower cost airline in their most competitive markets, while at the same time free their own capacity to compete elsewhere just the same? B6 claims there is increased competition, but until DOJ understands the true ramifications, all that competition equates to is a placebo-effect response to what may just may be none other than illegal collusion today. (re-posted for clarity to separate responses)

TYWoolman wrote:

santi319 wrote:

TYWoolman wrote:

Moral of the story: Divestitures proposed by B6 are in the form of infrastructure and slots with no commitments to planes, employees and associated assets, such as goodwill, branding and expectation of consistency in the market (yes, NK has goodwill and branding attributes). It would be a naive of the DOJ to consider divestiture remedies as a solution to remedy such a blatant disregard of capacity cutting (retrofitting in B6 terms) when such divestitures proposed by B6 (if that would EVEN be enough) are greatly inferior in their parts as opposed to being part of ONE vibrant, coherent network.

B6 and NK are unionized and their crews are protected by laws that do not allow termination of employment (Allegheny-Mohawk LPPs, McCaskill-Bond), moreso, B6 literally said NO FURLOUGHS.

Meanwhile besides pilots and FA, none of the frontline workers work directly for F9, therefore one can argue the loss of employees in an F9/NK is happening. F9 and NK cannot staff their pilots due to low pay and severe attrition. NK CEO said no payraises for the next 5 years publicly: https://www.forbes.com/sites/tedreed/20 ... ive-years/

And F9 reported an “excess “ of pilots.. lol..

https://centreforaviation.com/news/fron ... ge-1133926

And judging by the track record of both F9 and NK towards their employees… the future looks beyond bleak..

TYWoolman wrote:

#1) JetBlue admitted that it will permanently remove capacity from the market by retrofitting Spirit’s fleet to remove seats. Antitrust lawyers call that an “output restriction,” and it is fatal to JetBlue’s bid. So are JetBlue’s admitted price increases. Less airline capacity means higher fares. JetBlue’s CEO, Robin Hayes, certainly knows that. He observed just a few days ago, “The average price of air fares will go up because there is [sic] less seats.”i That is exactly what JetBlue would do with Spirit’s fleet. Indeed, in announcing its bid on April 6, JetBlue said that the acquisition would increase its profit margins, despite higher costs.

#2) Antitrust law asks whether a merger is likely to substantially lessen competition. Of the key focal points of this analysis, the most prominent are the effects on output and prices. A JetBlue/Spirit combination would be doomed from the outset because JetBlue has already admitted that the acquisition would reduce capacity (output) and increase fares (prices).

Lets do some critical thinking here, I find it ironic how no one is questioning F9’s management here (Indigo). They claimed they were not going to improve their offer, then they did. Then they claimed there is no pilot shortage expected, then why wouldn’t you let your biggest competitor be eliminated and grow organically? Don’t they have 200+ airbus orders? This is a huge red flag, because they are accusing B6 of becomming a monopolistic carrier that wouldn’t get approved by the DOJ, meanwhile they are doing exactly the same, effective eliminating their biggest competitor under the umbrella of synergies… in paper getting new slots and gates and plenty of planes,because of their order, without merger and organic growth sound very enticing, then why insisting? Because they want the same thing as jetblue, less competition and synergies.

TYWoolman wrote:

These facts—admitted higher prices and lower output—guarantee that JetBlue could never secure clearance for its proposed acquisition of Spirit. No claimed “divestitures” of airport slots or gates, or false claims or gimmicks, can fix JetBlue’s fatal problems.

This is variable, specially in an economy with higher fuel prices and inflation. See the past mergers post 2008.

TYWoolman wrote:

IMO in closing: The DOJ will approve the once-in-a-lifetime opportunity to create a solid ULCC competitor: F9/NK. The fledging ULCC's established right after Covid have not proven themselves to make a strong case that they can pick up the slack with NK totally out of the market under B6. A standalone F9 is mostly based in the west. A strong viable ULCC (F9/NK) will drive further ULCC opportunities to the market more than a larger B6 could ever do.... or ever WANT to accomplish!

I disagree, a major airline to keep the big 3 in check, specially in the Northeast where LCC presence is minimal, is what the traveling public need. Midwest, domestic low cost airports, and resort destinations will almost always have a way to have ULCC presence. Its the slot constrained areas and a country where 4 airlines run most of the flying that need to be challenged.

Let's do more critical thinking:
1) B6 will never have the scope and breadth to even semi-compete with what a legacy has to offer. NK CANNOT help them with that argument. And squandering ULCC capacity to accomplish that does not make a good merger case. A combined F9/NK, on the other hand, would certainly bring competition to the legacies because their track record, compared to B6, is more consistent nationwide to do just that. With due respect, what predominant successes has B6 achieved outside the opportunistic vacuum TWA left at JFK and the unprecedented legacy turmoil post 2001? (Yes, Boston was one of an organic growth strategy and should be commended!!) But B6 is betting on borrowed slots, "BORROWED", to further their corporate mission. Furthermore, in bringing more competition to the legacies: DOJ can remedy that quite nicely with contingent NEA approval via LGA slot divestitures to a combined F9/NK. But it’s the combination of the two that B6 fears, not a standalone F9, hence their divestiture commitment proposal is an easy pill to swallow. F9/NK combined will have many successes and future opportunities to further increase competition in legacy hubs given the unprecedented larger scale a combination would make. B6 has squandered every organic opportunity to go west and out of their comfort zones because they cannot compete. The only way they can is to eliminate ULCC competition. Case in point their NK ambition. Certainly, B6 wouldn't be incentivized to set up shop in any AA hub/focus city, but that's irrelevant right now.

Whatsmore, the F9/NK combination will incentivize and welcome additional ULCCs to the market, as ULCC infiltration really is an untapped market; a very huge part of the future with the middle-class getting squeezed, in addition to increasing demographics reaching out of poverty. Not to mention the "work from home" model appealing to startups that would find their employees combining leisure with business travel (unsubsidized by the employer). More ULCC competition will not be as incentivized by a larger B6, and if it does incentivize it, they know that capacity constrained northeast airports will help keep them at bay, which is another reason NEA is anti-competitive (AA shouldn't be choosing LGA winners) and why B6 finds comfort there.

2)Piece-mealing divestitures would not have nearly the affect the DOJ may think it would UNLESS it was kept within one larger network framework: namely a combined F9/NK. Especially when considering the start-up costs in such a tight labor market. It would prove difficult for most ULCCs who are better capable of injecting that competition.

3) F9/NK combined will have no effect on employment prospects as you suggest (nor B6 for that matter), so long as the market provides them. But employment is employment, regardless of who does it. 3rd party may better supply it, which may put B6 at greater disadvantage then.

How in the world do you go from saying the B6 NK merger won’t be big enough to allow JetBlue to compete with the majors but NK and F9 will.

I just thought it would be faster to get trained on another airlines Airbus fleet vs Boeing

When a ULCC goes into a legacy hub, the prices tend not to drop as much as they do when let’s say JetBlue goes into a legacy hub. Hasn’t that always been the case. ULCCs are important, but in terms of going into a strong hold like NY area or SFO, the legacies pay attention, but not as much as they do when Jetblue goes into these cities. Isn’t that correct?

fastmover wrote:

TYWoolman wrote:

santi319 wrote:

B6 and NK are unionized and their crews are protected by laws that do not allow termination of employment (Allegheny-Mohawk LPPs, McCaskill-Bond), moreso, B6 literally said NO FURLOUGHS.

Meanwhile besides pilots and FA, none of the frontline workers work directly for F9, therefore one can argue the loss of employees in an F9/NK is happening. F9 and NK cannot staff their pilots due to low pay and severe attrition. NK CEO said no payraises for the next 5 years publicly: https://www.forbes.com/sites/tedreed/20 ... ive-years/

And F9 reported an “excess “ of pilots.. lol..

https://centreforaviation.com/news/fron ... ge-1133926

And judging by the track record of both F9 and NK towards their employees… the future looks beyond bleak..



Lets do some critical thinking here, I find it ironic how no one is questioning F9’s management here (Indigo). They claimed they were not going to improve their offer, then they did. Then they claimed there is no pilot shortage expected, then why wouldn’t you let your biggest competitor be eliminated and grow organically? Don’t they have 200+ airbus orders? This is a huge red flag, because they are accusing B6 of becomming a monopolistic carrier that wouldn’t get approved by the DOJ, meanwhile they are doing exactly the same, effective eliminating their biggest competitor under the umbrella of synergies… in paper getting new slots and gates and plenty of planes,because of their order, without merger and organic growth sound very enticing, then why insisting? Because they want the same thing as jetblue, less competition and synergies.



This is variable, specially in an economy with higher fuel prices and inflation. See the past mergers post 2008.






I disagree, a major airline to keep the big 3 in check, specially in the Northeast where LCC presence is minimal, is what the traveling public need. Midwest, domestic low cost airports, and resort destinations will almost always have a way to have ULCC presence. Its the slot constrained areas and a country where 4 airlines run most of the flying that need to be challenged.

Let's do more critical thinking:
1) B6 will never have the scope and breadth to even semi-compete with what a legacy has to offer. NK CANNOT help them with that argument. And squandering ULCC capacity to accomplish that does not make a good merger case. A combined F9/NK, on the other hand, would certainly bring competition to the legacies because their track record, compared to B6, is more consistent nationwide to do just that. With due respect, what predominant successes has B6 achieved outside the opportunistic vacuum TWA left at JFK and the unprecedented legacy turmoil post 2001? (Yes, Boston was one of an organic growth strategy and should be commended!!) But B6 is betting on borrowed slots, "BORROWED", to further their corporate mission. Furthermore, in bringing more competition to the legacies: DOJ can remedy that quite nicely with contingent NEA approval via LGA slot divestitures to a combined F9/NK. But it’s the combination of the two that B6 fears, not a standalone F9, hence their divestiture commitment proposal is an easy pill to swallow. F9/NK combined will have many successes and future opportunities to further increase competition in legacy hubs given the unprecedented larger scale a combination would make. B6 has squandered every organic opportunity to go west and out of their comfort zones because they cannot compete. The only way they can is to eliminate ULCC competition. Case in point their NK ambition. Certainly, B6 wouldn't be incentivized to set up shop in any AA hub/focus city, but that's irrelevant right now.

Whatsmore, the F9/NK combination will incentivize and welcome additional ULCCs to the market, as ULCC infiltration really is an untapped market; a very huge part of the future with the middle-class getting squeezed, in addition to increasing demographics reaching out of poverty. Not to mention the "work from home" model appealing to startups that would find their employees combining leisure with business travel (unsubsidized by the employer). More ULCC competition will not be as incentivized by a larger B6, and if it does incentivize it, they know that capacity constrained northeast airports will help keep them at bay, which is another reason NEA is anti-competitive (AA shouldn't be choosing LGA winners) and why B6 finds comfort there.

2)Piece-mealing divestitures would not have nearly the affect the DOJ may think it would UNLESS it was kept within one larger network framework: namely a combined F9/NK. Especially when considering the start-up costs in such a tight labor market. It would prove difficult for most ULCCs who are better capable of injecting that competition.

3) F9/NK combined will have no effect on employment prospects as you suggest (nor B6 for that matter), so long as the market provides them. But employment is employment, regardless of who does it. 3rd party may better supply it, which may put B6 at greater disadvantage then.

How in the world do you go from saying the B6 NK merger won’t be big enough to allow JetBlue to compete with the majors but NK and F9 will.

Competition is not just about size. Business model and cost structure are also important. The ULCCs have a pattern of going into high fare markets, cutting fares and stimulating competition. B6 has done some of this in the past, but no longer has a cost structure that enables this level of stimulation. The B6 merger is predicted on providing consumers with more choice and a better product, but at a higher fare than ULCCs. This may be appealing to seasoned travelers, but is too nuanced to be compelling from a regulatory perspective.

SoCalFlyer wrote:

When a ULCC goes into a legacy hub, the prices tend not to drop as much as they do when let’s say JetBlue goes into a legacy hub. Hasn’t that always been the case. ULCCs are important, but in terms of going into a strong hold like NY area or SFO, the legacies pay attention, but not as much as they do when Jetblue goes into these cities. Isn’t that correct?

That is categorically false. ULCCs drop fares lower than B6.

TYWoolman wrote:

tlecam wrote:

TYWoolman wrote:

These are my opinion, as yours, yours. Why constantly state that? This is a forum of opinion. Your opinion is valid and appreciate it. If B6 finds NK such a complementary fit, then why propose to divest their most important assets that alternatively would contribute to better shareholder upswing in a combined F9/NK? IMO reason: they will accept ANYTHING at the end of the day (thus there hefty RTF) to disrupt F9's merger agreement. Anything is better than nothing, having done their greatest accomplishment: again, to kill the F9 merger agreement. F9 put that in to keep apples to apples. Of course there are similar regulatory standards set by DOJ, but that doesn't mean at all similar DOJ outcomes.

Do you really think DOJ will consider divestitures the cure-all for B6's "jetBlue effect" case while killing half the ULCC capacity?

Ok, my apologies. Your writing style doesn’t always jump out at me as you offering opinion; you state a lot of things with certainty as facts or foregone conclusions (e.g. “guarantee that JetBlue could never…”) that I don’t typically encounter in opinions.

As for your question, I reject the notion that a B6/NK merger kills half the ULCC capacity. It kills 1 of the 2 ULCC pure play airlines. As has been mentioned now multiple times, there are other ways that low cost capacity is provided - basic economy etc…

Since I disagree with the underlying premise (which is your opinion), it’s hard for me to offer mine.

I will try better. Your style is smooth and to the point. Mine tends to be a bit wordy. So...I'll try for your opinion again...Do you think a B6 acquisition of NK will inhibit ULCC capacity pricing-pressure since 1 of the 2 pure play airlines will be gone despite 1) basic economy offered by legacies not having that additional NK pricing pressure and 2) despite the migration of NK assets to a higher-than-ULCC cost model under B6?

It’s all good, this is why text is hard sometimes. I also forget that I should read every post on this site as opinion, so it’s on me as well.

I do think that prices will rise if either deal moves forward. Both take a competitor off the field.

Broadly speaking, I do think that prices will be higher if the B6 deal moves forward compared to the F9 deal (although that is just a guess on my part.) Whether they’re significantly different, I don’t know but I doubt it because of market pressures. Certainly specific routes where there is only one carrier remaining on the route are at risk of substantially higher fares.

fastmover wrote:

TYWoolman wrote:

santi319 wrote:

B6 and NK are unionized and their crews are protected by laws that do not allow termination of employment (Allegheny-Mohawk LPPs, McCaskill-Bond), moreso, B6 literally said NO FURLOUGHS.

Meanwhile besides pilots and FA, none of the frontline workers work directly for F9, therefore one can argue the loss of employees in an F9/NK is happening. F9 and NK cannot staff their pilots due to low pay and severe attrition. NK CEO said no payraises for the next 5 years publicly: https://www.forbes.com/sites/tedreed/20 ... ive-years/

And F9 reported an “excess “ of pilots.. lol..

https://centreforaviation.com/news/fron ... ge-1133926

And judging by the track record of both F9 and NK towards their employees… the future looks beyond bleak..



Lets do some critical thinking here, I find it ironic how no one is questioning F9’s management here (Indigo). They claimed they were not going to improve their offer, then they did. Then they claimed there is no pilot shortage expected, then why wouldn’t you let your biggest competitor be eliminated and grow organically? Don’t they have 200+ airbus orders? This is a huge red flag, because they are accusing B6 of becomming a monopolistic carrier that wouldn’t get approved by the DOJ, meanwhile they are doing exactly the same, effective eliminating their biggest competitor under the umbrella of synergies… in paper getting new slots and gates and plenty of planes,because of their order, without merger and organic growth sound very enticing, then why insisting? Because they want the same thing as jetblue, less competition and synergies.



This is variable, specially in an economy with higher fuel prices and inflation. See the past mergers post 2008.






I disagree, a major airline to keep the big 3 in check, specially in the Northeast where LCC presence is minimal, is what the traveling public need. Midwest, domestic low cost airports, and resort destinations will almost always have a way to have ULCC presence. Its the slot constrained areas and a country where 4 airlines run most of the flying that need to be challenged.

Let's do more critical thinking:
1) B6 will never have the scope and breadth to even semi-compete with what a legacy has to offer. NK CANNOT help them with that argument. And squandering ULCC capacity to accomplish that does not make a good merger case. A combined F9/NK, on the other hand, would certainly bring competition to the legacies because their track record, compared to B6, is more consistent nationwide to do just that. With due respect, what predominant successes has B6 achieved outside the opportunistic vacuum TWA left at JFK and the unprecedented legacy turmoil post 2001? (Yes, Boston was one of an organic growth strategy and should be commended!!) But B6 is betting on borrowed slots, "BORROWED", to further their corporate mission. Furthermore, in bringing more competition to the legacies: DOJ can remedy that quite nicely with contingent NEA approval via LGA slot divestitures to a combined F9/NK. But it’s the combination of the two that B6 fears, not a standalone F9, hence their divestiture commitment proposal is an easy pill to swallow. F9/NK combined will have many successes and future opportunities to further increase competition in legacy hubs given the unprecedented larger scale a combination would make. B6 has squandered every organic opportunity to go west and out of their comfort zones because they cannot compete. The only way they can is to eliminate ULCC competition. Case in point their NK ambition. Certainly, B6 wouldn't be incentivized to set up shop in any AA hub/focus city, but that's irrelevant right now.

Whatsmore, the F9/NK combination will incentivize and welcome additional ULCCs to the market, as ULCC infiltration really is an untapped market; a very huge part of the future with the middle-class getting squeezed, in addition to increasing demographics reaching out of poverty. Not to mention the "work from home" model appealing to startups that would find their employees combining leisure with business travel (unsubsidized by the employer). More ULCC competition will not be as incentivized by a larger B6, and if it does incentivize it, they know that capacity constrained northeast airports will help keep them at bay, which is another reason NEA is anti-competitive (AA shouldn't be choosing LGA winners) and why B6 finds comfort there.

2)Piece-mealing divestitures would not have nearly the affect the DOJ may think it would UNLESS it was kept within one larger network framework: namely a combined F9/NK. Especially when considering the start-up costs in such a tight labor market. It would prove difficult for most ULCCs who are better capable of injecting that competition.

3) F9/NK combined will have no effect on employment prospects as you suggest (nor B6 for that matter), so long as the market provides them. But employment is employment, regardless of who does it. 3rd party may better supply it, which may put B6 at greater disadvantage then.

How in the world do you go from saying the B6 NK merger won’t be big enough to allow JetBlue to compete with the majors but NK and F9 will.

IMO:
F9/NK would do a better job at more persistent low-fare service. It's not about bigger, but being unafraid. ULCC model is unafraid. B6 retreats to NYC/Boston because they cannot compete effectively due to their "glorified ULCC quasi-legacy cost structure." The NEA was the only way out to get shareholder value besides selling the airline.

sxf24 wrote:

SoCalFlyer wrote:

When a ULCC goes into a legacy hub, the prices tend not to drop as much as they do when let’s say JetBlue goes into a legacy hub. Hasn’t that always been the case. ULCCs are important, but in terms of going into a strong hold like NY area or SFO, the legacies pay attention, but not as much as they do when Jetblue goes into these cities. Isn’t that correct?

That is categorically false. ULCCs drop fares lower than B6.

I meant over all fares, not the ULCC itself. I mean faras in the market, yet I know ULCCs have low fares, but do they being down fares in an entire market is what I’m asking. I guess what I’m saying is who are the legacies more likely to price match? A ULCC or a Jetblue.

tlecam wrote:

TYWoolman wrote:

tlecam wrote:

Ok, my apologies. Your writing style doesn’t always jump out at me as you offering opinion; you state a lot of things with certainty as facts or foregone conclusions (e.g. “guarantee that JetBlue could never…”) that I don’t typically encounter in opinions.

As for your question, I reject the notion that a B6/NK merger kills half the ULCC capacity. It kills 1 of the 2 ULCC pure play airlines. As has been mentioned now multiple times, there are other ways that low cost capacity is provided - basic economy etc…

Since I disagree with the underlying premise (which is your opinion), it’s hard for me to offer mine.

I will try better. Your style is smooth and to the point. Mine tends to be a bit wordy. So...I'll try for your opinion again...Do you think a B6 acquisition of NK will inhibit ULCC capacity pricing-pressure since 1 of the 2 pure play airlines will be gone despite 1) basic economy offered by legacies not having that additional NK pricing pressure and 2) despite the migration of NK assets to a higher-than-ULCC cost model under B6?

It’s all good, this is why text is hard sometimes. I also forget that I should read every post on this site as opinion, so it’s on me as well.

I do think that prices will rise if either deal moves forward. Both take a competitor off the field.

Broadly speaking, I do think that prices will be higher if the B6 deal moves forward compared to the F9 deal (although that is just a guess on my part.) Whether they’re significantly different, I don’t know but I doubt it because of market pressures. Certainly specific routes where there is only one carrier remaining on the route are at risk of substantially higher fares.

I am of the opinion (lol) that prices will be significantly lower under F9/NK than B6/NK because B6 will be more distracted to compete with higher-cost perks differentiating the legacies, than being concerned with the easier ULCC environment itself created having taken out a ULCC competitor.

SoCalFlyer wrote:

sxf24 wrote:

SoCalFlyer wrote:

When a ULCC goes into a legacy hub, the prices tend not to drop as much as they do when let’s say JetBlue goes into a legacy hub. Hasn’t that always been the case. ULCCs are important, but in terms of going into a strong hold like NY area or SFO, the legacies pay attention, but not as much as they do when Jetblue goes into these cities. Isn’t that correct?

That is categorically false. ULCCs drop fares lower than B6.

I meant over all fares, not the ULCC itself. I mean faras in the market, yet I know ULCCs have low fares, but do they being down fares in an entire market is what I’m asking. I guess what I’m saying is who are the legacies more likely to price match? A ULCC or a Jetblue.

ULCC and jetBLue have different route networks as of now. jetBlue concentrated more east, particularly NYC/Boston. I would imagine a larger F9 would touch more legacy markets than an enlarged B6 and imo F9 will be able to sustain lower fares longer-term than B6. Legacies will have greater pricing spread pressure with an enlarged F9, rather than a larger B6 who will have higher costs.

Two new videos from Spirit can be accessed from this link:

Ted Christie +Mad Money interview

https://www.votespiritfrontier.com/

SoCalFlyer wrote:

sxf24 wrote:

SoCalFlyer wrote:

When a ULCC goes into a legacy hub, the prices tend not to drop as much as they do when let’s say JetBlue goes into a legacy hub. Hasn’t that always been the case. ULCCs are important, but in terms of going into a strong hold like NY area or SFO, the legacies pay attention, but not as much as they do when Jetblue goes into these cities. Isn’t that correct?

That is categorically false. ULCCs drop fares lower than B6.

I meant over all fares, not the ULCC itself. I mean faras in the market, yet I know ULCCs have low fares, but do they being down fares in an entire market is what I’m asking. I guess what I’m saying is who are the legacies more likely to price match? A ULCC or a Jetblue.

Yes, ULCCs bring down fares in an entire market. There’s no hard and fast rule for how competitors match, but you can look at average fares in a market and ULCCs have a bigger impact.

Something that no one seems to be talking about much is the over $400,000,000 breakup fee JetBlue will have to pay if the DOJ completely blocks the deal. JetBlue’s leadership didn’t just throw the $400m number out there on a whim. I’m sure they have spoken extensively with their legal team and political connections and feel strongly this can be done. The only thing worse than losing the vote tomorrow for the JetBlue leadership is winning and then not getting approval.