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BravoEchoNov
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Another Southwest Merger Coming?

Wed Jul 29, 2015 3:00 am

Interesting piece run by the Denver Business Journal. It states that Southwest is possibly contemplating a merger with Alaska Airlines, Hawaiian, or Jetblue. Thoughts?

http://www.bizjournals.com/denver/ne...-ahead-for-southwest-airlines.html
 
IAHflyer97
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:03 am

Please... No more... Just no more...
A man is only as big as the amount of strings on his guitar.
 
eal
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:07 am

Quoting BravoEchoNov (Thread starter):
Alaska Airlines

No

Quoting BravoEchoNov (Thread starter):
Jetblue

Hell No

Quoting BravoEchoNov (Thread starter):
Hawaiian

Most Definitely Hell No

If anything they'll acquire Sun Country, and even that seems very unlikely.

Slow news day, pretty evident by this articles lack of any details besides the obvious "Southwest just finished a merger, this means they can merge again".

The next merger will be between the ULCCs, the Denver Business Journal should be looking at the other big airline in town, and I'm not talking about UA.

[Edited 2015-07-28 20:10:22]
 
SPREE34
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:12 am

Neither of the three fit the Southwest profile. JB and Alaska don't fill any route voids. All three provide a premium (Bus/First) product, and their customers buy it.

Alaska uses express carriers for a portion of their flying. A deal would have to be stuck with SWAPA, and my bet is that never happening.

Fleet differences? Not an issue. Southwest is big enough that if they ever do merge with, or more likely, buy out another carrier with other fleet types, it won't matter, ot those types would be needed anyway. (esp wide body)

I think the writer is talking out of his dump port.

Nothing here to see.
I don't understand everything I don't know about this.
 
WNCrew
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:13 am

This article is a JOKE! No... the answer is NO
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
karadion
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:13 am

All are unlikely. JetBlue? I mean duh! Wouldn't happen. Southwest likes single fleet commonality. What possible incentive is there for Hawaiian? Alaska Airlines is the only most likely one because of their 737 fleet but I seriously doubt they would want to acquire Alaska for the same market space that Southwest mostly already operates on.
 
SPREE34
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:13 am

Quoting eal (Reply 2):
The next merger will be between the ULCCs, the Denver Business Journal should be looking at the other big airline in town, and I'm not talking about UA.

I think that one will happen some day. They've already had the same controlling stock holder.
I don't understand everything I don't know about this.
 
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mayor
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:18 am

Move along, move along.......nothing to see here  
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flyguy89
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:24 am

Quoting BravoEchoNov (Thread starter):

Yeah, that's all pretty out there. Setting aside the fact that the chances of the DOJ approving another merger are nil, B6 and WN have very different fleets, products and business models; Hawaiian? Really?.

Quoting eal (Reply 2):
The next merger will be between the ULCCs, the Denver Business Journal should be looking at the other big airline in town, and I'm not talking about UA.

This idea of ULCC mergers is tossed around quite frequently, but I think we need to keep in mind that ULCC's are quite different from legacy carriers. ULCC's thrive only because they're able to offer cut-throat fares that stimulate demand and make their spartan product valuable for the price. The primary benefits of a merger are both the elimination of competition and the resultant ability to raise fares/decrease capacity. None of those points are really beneficial for ULCC's as, if their fares go up, their value proposition declines significantly and they really don't gain much except increased market share, and market share holds much less importance for ULCC's versus other carriers.
 
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VS4ever
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:25 am

The last thing the industry needs right now is more consolidation and less competition, the DOJ already have their radar up and trying to push another merger through is probably close to insane.

As others have said, the closest fit from a Fleet Standpoint is AS, but even that is a stretch,

Please no..... especially B6...
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32andBelow
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:50 am

Quoting VS4ever (Reply 9):
As others have said, the closest fit from a Fleet Standpoint is AS, but even that is a stretch,

There is no reason an airline needs a common fleet to merge. Especially an airline with as many flights a day as a US major.
 
XT6Wagon
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 4:10 am

Alaska is the one I think they would want based on assets, but it would NEVER pass anti-trust today. WN would want it for the Alaska market and the overlap with their own continential operations. But its that heavy overlap in the lower 48 that would sink the deal.

B6 has lots of slots WN really needs now, but again... anti-trust would make this impossible outside of a B6 asset sale.
 
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Miami
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 4:25 am

Hold on. I have the answer:


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rbavfan
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 4:41 am

The only mix that makes sense would be a Hawaiian/jetBlue combination. Their are no overlapping routes, they are both Airbus operators & they would complement each other. Some of the E190's could replace 717's in hawaii inter island use over time. If they did a few E170's mixed in in Hawaii to replace ATR's they could add more flights to smaller island markets and consolidate intra hawaii with E170/E190 & Continental US, Hawaii mainland & some south pacific routes to A321/A320. TPAC south pacific & Japan would be great with Mint on A321's & some variation on A330's.
Could also allow some A332/338 to do JFK/BOS to EU/SA.
 
Byrdluvs747
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 4:44 am

If the Big 4 controls nearly 80% of the US domestic market, how can anyone think that the govt will welcome another 4-5% being absorbed into the airline cabal.
The 747: The hands who designed it were guided by god.
 
airplaneboy
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 4:48 am

Keep in mind the DOJ approved the recent mergers of American, Delta, and United- all of whom are much larger than WN. Jetblue, Hawaiian and Alaska have mostly complementary networks when compared to Southwest's, so a merger between WN and any of those 3 carriers wouldn't cause much antitrust concern from a consumer standpoint- it would only enlarge (or establish in some cases) WN's footprint in key markets (SEA/PDX/Hawaii with AS, JFK/BOS/FLL with B6, and HNL with HA).

Regarding the issue of fleet types- not an issue for an airline the size of WN. They would operate more than 1 type of necessary or replace those fleets with additional 737s. Regarding the difference in classes of service, it could mean the foray of WN into having a business class- or perhaps they could decide to do away with the premium class and transition the fleet of whomever they acquire to an all economy class fleet (just like they did with AirTran).

Does anyone know off hand how large WN would be compared to the U.S. 3 if the DOJ approved a merger between WN and any of the 3 airlines being discussed as candidates?
 
32andBelow
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 4:52 am

Quoting airplaneboy (Reply 15):
Does anyone know off hand how large WN would be compared to the U.S. 3 if the DOJ approved a merger between WN and any of the 3 airlines being discussed as candidates?

Doesn't WN already fly more domestically then these guys?
 
hnl-jack
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 6:03 am

As long as profits continue to climb keeping investors happy, further consolidation is unlikely. When that situation begins to show some signs of weakness some of these carriers could be seeking merger. Even with that however, none of these pairings with WN makes a lot of sense as their business model is so very different from the others. Like has been discussed here so many times before, out of this group I believe a case could only be made for AS and HA, but not now.
 
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EA CO AS
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 8:02 am

Quoting hnl-jack (Reply 17):
Like has been discussed here so many times before, out of this group I believe a case could only be made for AS and HA, but not now.

Agreed. DOJ simply isn't interested in any further strengthening of the "Big 4" as they control over 80% of the U.S. market.

The next round of consolidation (if any) will involve smaller carriers like AS, HA, B6, SY, VX, F9, etc.

And yes, I think HA would make a lovely wholly-owned subsidiary of Alaska Air Group, with both companies maintaining their unique identities, similar cultures, harmonizing routes and operations to make one finely-tuned West Coast/Pacific codesharing machine.
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JetBlueCLT
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 8:54 am

Southwest can stay the hell away from JetBlue
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INFINITI329
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 10:31 am

Quoting SPREE34 (Reply 3):
JB and Alaska don't fill any route voids.

I must disagree with you there. JB has damn near the entire caribbean and central america. huge footprints in the nyc & boston areas. wn is pretty weak still in all three areas. with that being said it would take a lot for merger like this to happen
 
jreuschl
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 11:23 am

Sun Country is struggling a little bit, right? Maybe WN would merge for their 737 fleet?
 
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enilria
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 11:40 am

Quoting SPREE34 (Reply 3):

Southwest has become like the Big3. Mergers are now to eliminate competitors more than fill route voids. I would hope DOJ would stop any more deals.

IMHO, B6 is the most consistent with their strategy. WN wants to be a business airline. WN is weak in BOS and NYC. LGB is a thorn they could shut down. AS adds nothing except a war with DL. HA adds nothing that they would want they can't easily do themselves.

Dear DOJ,
Please block any more mergers.

Sincerely,
Enilria
 
luv2fly
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 11:46 am

Sun Country brings nothing to the table! They do not own any planes, if anything they would go for SY for the real estate.
You can cut the irony with a knife
 
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DL747400
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 12:49 pm

WN needs to first get their own house in order. After my own recent experience on WN, I say customers have reason to consider alternative carriers. Operationally, WN is a mess and they have been struggling for the past 2-3 years. Customers do notice whether you are ontime, when flights are cancelled, when bags are late or lost. Evolve hard product is a disaster. Boarding process is just............ a zoo.
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neutronstar73
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 12:52 pm

If you have no news to write or report, the answer (apparently at this "business journal") is...

MAKE IT UP!!!

Seriously, all the airlines mentioned have no value for Southwest...at all. Southwest is not in any need to merge with anyone, especially those named in the article.

Sloppy, lazy "journalism", if you want to call it that.
 
txkf2010
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 1:33 pm

WN didn't merge with FL. They bought FL so the DOJ really couldn't do anything. If they go with that same model, again, DOJ won't be able to say anything.
 
SESGDL
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 1:45 pm

Quoting Byrdluvs747 (Reply 14):

If the Big 4 controls nearly 80% of the US domestic market, how can anyone think that the govt will welcome another 4-5% being absorbed into the airline cabal.

Because government is controlled by big business and money talks.

Jeremy
 
MaverickTTT
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 1:49 pm

B6 might've made sense a couple years ago. The stock was trading at about 1/3 what it is now and it would have offered JFK access, some near-international route authorities, and the excuse to move toward assigned/premium seating. Alas, I think that ship has sailed...and, even if they were to do it today, I don't think DOJ would buy off on it.

Anyone who still things an AS merger makes sense is hung up on the 737 and nothing more. I don't think fleet commonality matters nearly as much as it used to.
 
jetblue1965
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 1:56 pm

Quoting MaverickTTT (Reply 28):

Anyone who still things an AS merger makes sense is hung up on the 737 and nothing more. I don't think fleet commonality matters nearly as much as it used to.

WN+AS would give them more presence at LAX (albeit at a really poor split terminal scenario) and essential dominance for up-and-down the west coast. It would also give WN the much needed Hawaii network. But it won't solve any of their northeast network gaps.

WN+B6 can fill in all the transcon, NYC, and BOS gaps that is painfully lacking in WN's network, plus international partners. Their FLL-based LatAm network also compliments well with the WN one out of HOU. Problem is that a large chunk of B6's success comes from their willingness to codeshare with anyone and everyone, something that's not in WN's gene.

WN+HA is the least possible one since HA specializes in a single hub while WN is very much into the p2p space.
 
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Moose135
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 2:23 pm

Quoting txkf2010 (Reply 26):
WN didn't merge with FL. They bought FL so the DOJ really couldn't do anything. If they go with that same model, again, DOJ won't be able to say anything.

Incorrect...WN needed DOJ approval due to possible anti-trust issues:

http://www.wsj.com/articles/SB100014...4052748703778104576287361528195474
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enilria
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 2:24 pm

Quoting txkf2010 (Reply 26):
WN didn't merge with FL. They bought FL so the DOJ really couldn't do anything.

That's completely false and I would suggest you review your knowledge in this area of U.S. law. It makes no difference of any kind whether there is a merger or a purchase.

Quoting txkf2010 (Reply 26):
If they go with that same model, again, DOJ won't be able to say anything.

Also completely and utterly false to the point that I wonder if you are just trolling for reaction.
 
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enilria
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 2:39 pm

Quoting jetblue1965 (Reply 29):
WN+AS would give them more presence at LAX

Yes, but really nothing that WN can't just do themselves, plus the RJs and Q400s would almost certainly be gone as they have made that same fleet move before with acquisitions.

Quoting jetblue1965 (Reply 29):
essential dominance for up-and-down the west coast

That is the one thing of some value, but DL won't allow them to be dominant.

Quoting jetblue1965 (Reply 29):
It would also give WN the much needed Hawaii network.

Again, since there is no real passenger loyalty at all in that market it really gets them nothing to acquire that network. They can just add the routes and get pretty much the exact same economics without the cost of the purchase.

Quoting jetblue1965 (Reply 29):
WN+B6 can fill in all the transcon, NYC, and BOS gaps that is painfully lacking in WN's network

Sadly, you are 100% correct.

Quoting jetblue1965 (Reply 29):
Their FLL-based LatAm network also compliments well with the WN

It would allow WN to dominate FLL and probably put NK in a weak position, although that's exactly why it shouldn't be allowed, but see next one...

Quoting jetblue1965 (Reply 29):
plus international partners

So, here is the downside of the B6 deal. WN has plenty of interested int'l partners. The problem is WN. They don't want to do any deals and at least a good part of the reason is their technology minefield. Seat assignment is probably another factor. So, saying that B6 gets them partners implies that they couldn't get partners otherwise and they are already lined up knocking on WN's door.

The other problem is the culture mix. B6, and to some extent FL, were VERY open-minded with int'l in terms of doing what it took to make the foreign routes successful. Foreign speaking FAs, local sales channels, facilitating cash sales in other countries, int'l sales force, functional foreign currency technology...etc. WN does all of those barely or not at all. They would gut B6 internationally if they handle it like they handled FL. Technology is a big part of the problem, but it is also the culture to a great extent and they both feed on each other to stymie the airline in these areas. The mantra is KISS, Keep It Simple Stupid. That serves them well in many areas, but international isn't simple and attempting to do it [email protected] in order to "keep it simple" just doesn't succeed outside a few niches with all Americans like CUN and SJD.

Quoting jetblue1965 (Reply 29):
Problem is that a large chunk of B6's success comes from their willingness to codeshare with anyone and everyone, something that's not in WN's gene.

Exactly. It's cultural reluctance not pushing the technology at WN, and technology as an excuse for cultural reluctance. Corporate culture does not change easily and the AirTran culture was obliterated just as we are finding that over time the United culture survived. It will be interesting to see what happens with AA. So far it seems the US (HP) culture is winning, but it seems like wherever the HQ is located dictates the long-term answer.
 
DTWPurserBoy
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 2:47 pm

I would see something like an Allegiant/Spirit merger before any of the other mentioned combinations.

The writer is correct in saying merger/purchasing is exactly the same in the eyes of the DOJ. It still requires review and approval. With all of the consolidation that has already taken place in the industry I would expect that you would have to show that one or both carriers would be on the verge of financial collapse before it would go through.
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jetblue1965
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:15 pm

Quoting enilria (Reply 32):


The other problem is the culture mix. B6, and to some extent FL, were VERY open-minded with int'l in terms of doing what it took to make the foreign routes successful. Foreign speaking FAs, local sales channels, facilitating cash sales in other countries, int'l sales force, functional foreign currency technology...etc. WN does all of those barely or not at all. They would gut B6 internationally if they handle it like they handled FL. Technology is a big part of the problem, but it is also the culture to a great extent and they both feed on each other to stymie the airline in these areas. The mantra is KISS, Keep It Simple Stupid. That serves them well in many areas, but international isn't simple and attempting to do it [email protected] in order to "keep it simple" just doesn't succeed outside a few niches with all Americans like CUN and SJD.

It was really sad when WN completely torn apart the ATL network *and* sold the FL 717s to DL to use against them, essentially slitting their own throat and their own wrist at the same time.
 
txkf2010
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:33 pm

Quoting enilria (Reply 31):

The point is WN bought FL. They didn't merge.
 
jetblue1965
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:36 pm

Quoting txkf2010 (Reply 35):

The point is WN bought FL. They didn't merge.

How the transaction was structured is just semantics. From the DOT/DOJ's point of view, any transaction that results in less competition will be scrutinized regardless of who bought what.
 
stratacruiser
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:39 pm

WN and B6 are actually quite complimentary....strong presence in New York and Boston, on transcons and in the Caribbean for B6....strong presence everywhere else for WN. As for the value fleet commonality, that has become more urban legend than anything else as it pertains to WN. People were citing this a supposed advantage that WN had over legacies back when UA alone operated more 737s than WN...yet somehow UA's fleet makeup made them inefficient. It's far more important to optimize usage of the asset - WN has always been a leader in this area - and to have the right aircraft for the particular task. A merged WN and B6 would gain greater advantage from being credibly able to play Airbus and Boeing against each other for new aircraft orders than by simply having a massive fleet of just one type.

Dave
 
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Moose135
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:39 pm

Quoting txkf2010 (Reply 35):
The point is WN bought FL. They didn't merge.

No, the point is they still needed DOJ approval, as noted in the link I provided.
KC-135 - Passing gas and taking names!
 
ScottB
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 3:53 pm

Quoting MaverickTTT (Reply 28):
B6 might've made sense a couple years ago. The stock was trading at about 1/3 what it is now and it would have offered JFK access, some near-international route authorities, and the excuse to move toward assigned/premium seating.

WN already had "the excuse to move toward assigned/premium seating" when they purchased AirTran. I strongly doubt that's a significant impediment given that the premium seating on B6 is on a very limited set of routes and has only been introduced very recently.

The JBLU share price might make a deal somewhat less attractive, but keep in mind that LUV is trading at about two-and-a-half times where it was two years ago as well -- and JBLU still trades below its enterprise value. You don't walk away from a good deal just because you could have had it cheaper two years ago -- Verizon's acquisition of Vodafone's stake in Verizon Wireless is a clear example of that.

Quoting enilria (Reply 22):
Southwest has become like the Big3. Mergers are now to eliminate competitors more than fill route voids. I would hope DOJ would stop any more deals.

IMHO, B6 is the most consistent with their strategy. WN wants to be a business airline. WN is weak in BOS and NYC. LGB is a thorn they could shut down. AS adds nothing except a war with DL. HA adds nothing that they would want they can't easily do themselves.

I disagree that DOJ would block a WN merger with any of the three airlines mentioned -- largely because there is generally so little overlap between their respective networks.

AS might add a war with DL, but there's only so far that DL can expand in SEA until they run out of gates -- and AS also brings a well-developed West Coast-Hawaii operation which would fit in well with WN's West Coast presence. There's some overlap at LAX, but the impact on market concentration is small given that AA/DL/UA/WN all have nearly equal market shares there already.

WN is so small in BOS & NYC that a B6 merger would pose almost no competitive concern. They could certainly offer slots and gates at LGB as a concession considering that WN likely is not all that interested in maintaining the LGB focus city. B6 and WN are two of the top three carriers at FLL, but there is limited route overlap and substantial competition from both NK at FLL and AA 20 miles away at MIA.

I agree about HA to a point, but I also have to imagine that the interisland operation prints money now that they have almost no competition. And it's probably the quickest way for WN to jumpstart a long-haul operation if they have an interest in doing so.

Quoting airplaneboy (Reply 15):
Jetblue, Hawaiian and Alaska have mostly complementary networks when compared to Southwest's, so a merger between WN and any of those 3 carriers wouldn't cause much antitrust concern from a consumer standpoint- it would only enlarge (or establish in some cases) WN's footprint in key markets (SEA/PDX/Hawaii with AS, JFK/BOS/FLL with B6, and HNL with HA).

  

Quoting DL747400 (Reply 24):
Operationally, WN is a mess and they have been struggling for the past 2-3 years. Customers do notice whether you are ontime, when flights are cancelled, when bags are late or lost. Evolve hard product is a disaster. Boarding process is just............ a zoo.

Have you been around a DL boarding gate recently? Dozens of passengers crowd around hoping to be at the front of the line when their zone is called. UA? Passengers line up like cattle in numbered chutes.

WN's on-time performance has been a mess, but it has also markedly improved over the last year. For April & May 2015 averaged together, they're up about 8 percentage points over 2Q2014. They still have room to get better, but they also don't have the option to thin out the regional operations when delays happen.

Quoting eal (Reply 2):
Slow news day, pretty evident by this articles lack of any details besides the obvious "Southwest just finished a merger, this means they can merge again".

I do agree with this, though. While I don't believe there are any serious structural impediments to a merger with any of B6/AS/HA, I also don't see it happening in the near future.
 
richierich
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 4:13 pm

Quoting ScottB (Reply 39):
I do agree with this, though. While I don't believe there are any serious structural impediments to a merger with any of B6/AS/HA, I also don't see it happening in the near future.

I agree too.
I think the US mergers are in a period of dormancy - after each of the four largest airlines went through one or two mergers or acquisitions the past decade or so, I tend to think there will be no more for the foreseeable future (~ 3-5 years.)

There are plenty of possibilities. Every month on a.net, there are literally several threads - like this one - of speculative mergers between airlines. If it's not WN + B6, it's DL + AS, or B6 + F9, etc. There may be a hint of truth to some of them, while others can be dismissed as raging conjecture...most of us will never know how many closed-door deals have been proposed and ultimately rejected.
None shall pass!!!!
 
bobnwa
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 4:20 pm

Quoting BravoEchoNov (Thread starter):
It states that Southwest is possibly contemplating a merger with Alaska Airlines, Hawaiian, or Jetblue. Thoughts?

How does one possibly contemplate something
 
richierich
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RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 4:59 pm

Quoting bobnwa (Reply 41):
How does one possibly contemplate something

It means somebody, somewhere thought about it at one of these companies.
Right now, I am possibly contemplating buying my own unicorn, sorry, flying unicorn (this is an aviation site...)
None shall pass!!!!
 
FlyHossD
Posts: 2109
Joined: Mon Nov 02, 2009 3:45 pm

RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 5:01 pm

Quoting Karadion (Reply 5):
All are unlikely. JetBlue? I mean duh! Wouldn't happen. Southwest likes single fleet commonality.

The lack of a common fleet didn't stop Southwest from pursuing Frontier a few years ago.
My statements do not represent my former employer or my current employer and are my opinions only.
 
rta
Posts: 1414
Joined: Mon Jan 26, 2015 2:01 am

RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 5:07 pm

Quoting eal (Reply 2):
Slow news day, pretty evident by this articles lack of any details besides the obvious "Southwest just finished a merger, this means they can merge again".

  
What a ridiculous article. They're just listing airlines that haven't merged yet without any actual facts of an interest or intent to merge.

In other news, Ford may consider merging with General Motors because they both make cars.
 
User avatar
enilria
Posts: 10377
Joined: Fri Feb 22, 2008 7:15 pm

RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 5:13 pm

Quoting jetblue1965 (Reply 34):
It was really sad when WN completely torn apart the ATL network *and* sold the FL 717s to DL to use against them, essentially slitting their own throat and their own wrist at the same time.

That's about right.

Quoting jetblue1965 (Reply 36):
Quoting txkf2010 (Reply 35):

The point is WN bought FL. They didn't merge.

How the transaction was structured is just semantics. From the DOT/DOJ's point of view, any transaction that results in less competition will be scrutinized regardless of who bought what.
Quoting Moose135 (Reply 38):
Quoting txkf2010 (Reply 35):
The point is WN bought FL. They didn't merge.

No, the point is they still needed DOJ approval, as noted in the link I provided.

Well said.

Quoting ScottB (Reply 39):
I disagree that DOJ would block a WN merger with any of the three airlines mentioned -- largely because there is generally so little overlap between their respective networks.

I can HOPE they would block a merger. Isn't WN the largest domestic carrier still? That's a good reason to block it. How long do you think it would be before the industry gains back a new entrant of the size of B6 to replace them in terms of maintaining the same number of competitors? Somewhere between 30 years and never.

Quoting ScottB (Reply 39):
WN is so small in BOS & NYC that a B6 merger would pose almost no competitive concern. They could certainly offer slots and gates at LGB as a concession considering that WN likely is not all that interested in maintaining the LGB focus city.

Yes, they could, but WN would still gut B6 internationally and I question whether WN is at all capable of making JFK work. Do you think WN can make money flying domestic routes from JFK? Or will they just hand it to Delta after overpaying for it as is their tradition? I'm sure Delta would take B6's entire fleet as well. Part Deux.

Quoting ScottB (Reply 39):
I agree about HA to a point, but I also have to imagine that the interisland operation prints money now that they have almost no competition.

Agreed, but that has value for anybody.

Quoting ScottB (Reply 39):
a long-haul operation if they have an interest in doing so.

Do they have interest? I say no.

Quoting ScottB (Reply 39):
WN's on-time performance has been a mess, but it has also markedly improved over the last year.

To be fair, they did not fix it by getting their operation back to the old days. They did it by lengthening turns and block times. That's what the legacies do. It's not low cost.

Quoting richierich (Reply 40):
I think the US mergers are in a period of dormancy

Let's hope.
 
jetblue1965
Posts: 5050
Joined: Wed Mar 19, 2014 1:28 pm

RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 5:26 pm

Quoting enilria (Reply 45):
Quoting ScottB (Reply 39):
WN's on-time performance has been a mess, but it has also markedly improved over the last year.

To be fair, they did not fix it by getting their operation back to the old days. They did it by lengthening turns and block times. That's what the legacies do. It's not low cost.

Let's put that in perspective. Here are the mainline-only stats for the last 30 days (flightstats.com)

cancellation ...... delays ..... operating carrier (mainline only)
787 31,098 (WN) Southwest Airlines

309 11,285 (AA) American Airlines
246 6,090 (US) US Airways
------------------------------------------------
555 17,375 AA + US

828 17,031 (UA) United Airlines
111 13,821 (DL) Delta Air Lines

WN's on-time rate, as measured by delays, is absolutely atrocious when compared to its peers, but still better than NK, which clocked in a nice 53.7% on-time rate for June'15.
 
ScottB
Posts: 7191
Joined: Fri Jul 28, 2000 1:25 am

RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 6:21 pm

Quoting jetblue1965 (Reply 46):
Let's put that in perspective. Here are the mainline-only stats for the last 30 days (flightstats.com)

That's a nice chart and all, but mainline-only stats are pretty meaningless when DL/AA/UA shift a lot of the delays off to their regionals when weather goes downhill at their hubs. For June 2015, according to the same source you used, WN outperformed UA in on-time and was less than 1% behind AA/US.

Quoting enilria (Reply 45):
they did not fix it by getting their operation back to the old days. They did it by lengthening turns and block times. That's what the legacies do. It's not low cost.

That is true, but it's also not as big of a cost driver as wages and fuel costs have come up. Aircraft ownership & airport lease costs account for maybe 15% of their operating costs these days. And planes are going to take longer to turn when your average load factor is 80% versus 65% 20 years ago.

Quoting enilria (Reply 45):
WN would still gut B6 internationally and I question whether WN is at all capable of making JFK work. Do you think WN can make money flying domestic routes from JFK? Or will they just hand it to Delta after overpaying for it as is their tradition? I'm sure Delta would take B6's entire fleet as well.

I think that by the time WN would actually close a merger with B6, they'd have migrated off the old system and onto Altea as planned. If they were to buy B6, it would be for JFK & BOS since IMO the rest of the network has little value outside of perhaps FLL.

Fleetwise WN has enough deliveries/options from Boeing to replace the B6 fleet in about four years. But they could also engineer something like a swap of A320s for 737-800s with Delta (or AA or UA, even).

Quoting jetblue1965 (Reply 34):
It was really sad when WN completely torn apart the ATL network *and* sold the FL 717s to DL to use against them, essentially slitting their own throat and their own wrist at the same time.

FL was treading water in ATL and the 717 transaction was win-win for both. The 737-700 offers lower unit costs than the 717 while DL was able to retire hundreds of inefficient CR2s which were mostly in markets WN wouldn't serve anyway.
 
jetblue1965
Posts: 5050
Joined: Wed Mar 19, 2014 1:28 pm

RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 6:28 pm

Quoting ScottB (Reply 47):

That's a nice chart and all, but mainline-only stats are pretty meaningless when DL/AA/UA shift a lot of the delays off to their regionals when weather goes downhill at their hubs. For June 2015, according to the same source you used, WN outperformed UA in on-time and was less than 1% behind AA/US.

On the flip side of the same coin, WN lacks a scapegoat when the weather goes bad, so any bad weather will immediately impact mainline while for the legacies they have some sort of "buffer room" built into their network structure.

The only pax that would notice a difference would be those at outstations where it's WN mainline vs. legacy regionals. If you're flying ORD-LAX vs. MDW-LAX, only the mainline stats matter at that point.
 
deltal1011man
Posts: 5382
Joined: Mon Sep 19, 2005 9:17 am

RE: Another Southwest Merger Coming?

Wed Jul 29, 2015 6:42 pm

Quoting jetblue1965 (Reply 29):

WN+AS would give them more presence at LAX (albeit at a really poor split terminal scenario) and essential dominance for up-and-down the west coast. It would also give WN the much needed Hawaii network. But it won't solve any of their northeast network gaps.

West coast competition is heating up and WN/AS gives WN a way to eliminate a competitor. IMO reminds me a lot of WN/FL. Adds a little to the network WN doesn't have (mostly Hawaii), lets them pull capacity out of the market place and is a all 737 carrier.

LAX would probably be fixed with T0.





having said all that, I don't know if the government would buy off on it. One one hand WN is the love child who does what it wants, but on the other hand it makes the big 4 even strong and probably pulls a good bit of capacity out of the market place. (IMO SEA/PDX would see large cuts ala ATL and QX would quickly go bye-bye)

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