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flybry
Topic Author
Posts: 159
Joined: Mon Jul 09, 2012 11:26 am

Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 12:43 am

If this is being discussed in another thread, I apologize and please delete.

I was just wondering if all the U.S. airlines emerge from the current coronavirus crisis as much smaller carriers (like Delta said it would), would that open the door for mergers like we saw in the aftermath of the 2008 Great Recession? Could Alaska and JetBlue merge? What about United and Delta? American and Alaska? Thoughts?
 
Boof02671
Posts: 1996
Joined: Sun Jul 10, 2016 12:15 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 12:45 am

If airlines are shrinking, why would they merge to get bigger?
 
flybry
Topic Author
Posts: 159
Joined: Mon Jul 09, 2012 11:26 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 12:46 am

I was thinking they’d merge to save themselves from going out of business?
 
runway23
Posts: 2334
Joined: Sat Jan 15, 2005 2:12 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 12:50 am

flybry wrote:
I was thinking they’d merge to save themselves from going out of business?


The cost of a merger is considerable in terms of efforts, cost and planning. Airlines have other stuff to do now like trying to survive.
 
crj900lr
Posts: 476
Joined: Fri Mar 18, 2011 1:44 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 1:08 am

Yep, look for NK and F9 to merge along with B6 and WN (here comes the Airbus to WN) and maybe AS and HA.
 
ShinyAndChrome
Posts: 280
Joined: Fri Aug 28, 2015 1:53 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 1:14 am

A merger makes the most sense if the component carriers have some kind of existing structural deficiency that they couldn't feasibly fix organically. Those kinds of glaring issues really just aren't there anymore to justify it. Especially right now, it wouldn't be worth the cost and effort while everyone's just trying to keep the lights on.
 
UPNYGuy
Posts: 317
Joined: Thu Jan 06, 2011 4:14 pm

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 1:23 am

crj900lr wrote:
Yep, look for NK and F9 to merge along with B6 and WN (here comes the Airbus to WN) and maybe AS and HA.


I have been thinking NK and F9 makes sense for a while now.
 
Boof02671
Posts: 1996
Joined: Sun Jul 10, 2016 12:15 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 1:37 am

Mergers cost money which airlines don’t have to spend
 
tphuang
Posts: 5067
Joined: Tue Mar 14, 2017 2:04 pm

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 1:38 am

NK i think will either merge with B6 or get bought out by WN. HA will possibly merge with AS or B6.
 
WidebodyPTV
Posts: 264
Joined: Fri Sep 20, 2019 9:06 pm

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 1:42 am

Yes. Delta-United American Spirit Blue will soon be one of only two airlines left in this country, the other being the merged Southwest-Hawaiian-Alaska continuing to operate under the name of Southwest.

Seriously, what the heck is with this forum and members' obsession with mergers?
 
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FLALEFTY
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Joined: Tue Jan 31, 2006 11:33 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 1:56 am

UPNYGuy wrote:
crj900lr wrote:
Yep, look for NK and F9 to merge along with B6 and WN (here comes the Airbus to WN) and maybe AS and HA.


I have been thinking NK and F9 makes sense for a while now.


This assumes that both NK and F9 can survive this crisis.

For NK their most important markets are flying "white shoes" passengers to MCO (Disney, Universal, et. al.) and FLL (the cruise lines). Sadly, all the Orlando attractions are shuttered and Port Everglades' Cruise Terminal is at a standstill. The longer they stay closed, the more quickly it will drain down NK's cash. And with their new, highly-leveraged Airbus fleet, a fading cash position will make repossessions a real possibility.

F9's business model is even more nebulous during these crazy times. They are not a market leader at most of their stations, except for Trenton. They cater to low-yield discretionary flying, which will be slow to come back after this economic collapse. They also have a fleet of new, but highly-leveraged Airbuses that will bleed cash quick, even if they are parked.
 
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JBo
Posts: 1747
Joined: Wed Jan 05, 2005 7:23 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 2:56 am

I really don't understand why everyone on this forum is so fixated on wanting to merge down the US airlines to as few as possible, but NK and F9 are the weakest links in the picture right now.

B6, WN, AS, and HA are fine on their own.

AA, UA, and DL aren't going anywhere.

The biggest potential for consolidation is at the regional level, especially as everyone is scaling back operations. We've already had news that Trans States Holdings will be shutting down Compass, along with the already-planned shutdown of Trans States Airlines (leaving GoJet as TSH's sole remaining carrier). The other smaller regionals - CommutAir and Air Wisconsin particularly - are the most likely to either shut down or be acquired.
I'd take the awe of understanding over the awe of ignorance any day.
 
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aemoreira1981
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Joined: Mon Jan 09, 2017 12:17 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 3:02 am

FLALEFTY wrote:
UPNYGuy wrote:
crj900lr wrote:
Yep, look for NK and F9 to merge along with B6 and WN (here comes the Airbus to WN) and maybe AS and HA.


I have been thinking NK and F9 makes sense for a while now.


This assumes that both NK and F9 can survive this crisis.

For NK their most important markets are flying "white shoes" passengers to MCO (Disney, Universal, et. al.) and FLL (the cruise lines). Sadly, all the Orlando attractions are shuttered and Port Everglades' Cruise Terminal is at a standstill. The longer they stay closed, the more quickly it will drain down NK's cash. And with their new, highly-leveraged Airbus fleet, a fading cash position will make repossessions a real possibility.

F9's business model is even more nebulous during these crazy times. They are not a market leader at most of their stations, except for Trenton. They cater to low-yield discretionary flying, which will be slow to come back after this economic collapse. They also have a fleet of new, but highly-leveraged Airbuses that will bleed cash quick, even if they are parked.


B6 also does a lot of business in Florida, but they could also use FLL as a jumping point for more LatAm service and the additional 30 A321s would allow B6 to retire its high-time A320s. This may also be B6's only way to grow beyond being an East Coast regional carrier.
 
MartijnNL
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Joined: Sun Jan 01, 2017 11:44 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 12:54 pm

WidebodyPTV wrote:
Seriously, what the heck is with this forum and members' obsession with mergers?

Indeed. The world needs more airlines, not less.

I remember my first spotting trips to the United States. The variety of airlines was incredibly small compared to Europe. And that was during the time AirTran, America West Airlines, Business Express, Continental Airlines, Delta Shuttle, Metrojet, Midway Airlines, Midwest Express, National Airlines, Northwest Airlines, TWA and US Airways were all still operating.
 
Rossiya747
Posts: 312
Joined: Sat Dec 21, 2019 2:56 am

Re: Will coronavirus trigger new round of mergers?

Sat Mar 21, 2020 10:13 pm

NK and F9 is the only one that makes sense. The US3 is done merging.
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Rosie7
Posts: 14
Joined: Tue Nov 03, 2015 2:18 am

Re: Will coronavirus trigger new round of mergers?

Sun Mar 22, 2020 1:46 am

Yep ! NK and F9 makes perfect sense in most practical ways for a merger. I have been hearing / reading this since January,2016.
 
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SidPortTravels
Posts: 3
Joined: Sun Dec 09, 2018 8:28 pm

Re: Will coronavirus trigger new round of mergers?

Sun Mar 22, 2020 4:19 pm

I'm not sure about the US, but I could see Norwegian being bought up by either IAG, LH, or AF/KLM. Norwegian already has a huge piece of the pie when it comes to Trans-Atlantic flights, and most of that market share was taken from BA. I think it would make sense for BA and it's parent IAG to acquire Norwegian.
 
UPNYGuy
Posts: 317
Joined: Thu Jan 06, 2011 4:14 pm

Re: Will coronavirus trigger new round of mergers?

Tue Mar 31, 2020 9:42 pm

FLALEFTY wrote:
UPNYGuy wrote:
crj900lr wrote:
Yep, look for NK and F9 to merge along with B6 and WN (here comes the Airbus to WN) and maybe AS and HA.


I have been thinking NK and F9 makes sense for a while now.


This assumes that both NK and F9 can survive this crisis.

For NK their most important markets are flying "white shoes" passengers to MCO (Disney, Universal, et. al.) and FLL (the cruise lines). Sadly, all the Orlando attractions are shuttered and Port Everglades' Cruise Terminal is at a standstill. The longer they stay closed, the more quickly it will drain down NK's cash. And with their new, highly-leveraged Airbus fleet, a fading cash position will make repossessions a real possibility.

F9's business model is even more nebulous during these crazy times. They are not a market leader at most of their stations, except for Trenton. They cater to low-yield discretionary flying, which will be slow to come back after this economic collapse. They also have a fleet of new, but highly-leveraged Airbuses that will bleed cash quick, even if they are parked.


NK I think will be fine. It is the leisure markets that will recover rapidly, while the biz travelers will be gun shy. Plus they have US$1.08b in the bank according to financial statements.
 
BNAMealer
Posts: 783
Joined: Sat Jul 27, 2019 8:03 pm

Re: Will coronavirus trigger new round of mergers?

Wed Apr 01, 2020 12:33 am

Maybe we’ll go down to two legacy carriers in the US, which I honestly wouldn’t mind. Rather have two carriers with complete networks than three with holes.
 
acavpics
Posts: 364
Joined: Thu Dec 20, 2018 2:54 am

Re: Will coronavirus trigger new round of mergers?

Fri Apr 10, 2020 11:36 pm

aemoreira1981 wrote:
FLALEFTY wrote:
UPNYGuy wrote:

I have been thinking NK and F9 makes sense for a while now.


This assumes that both NK and F9 can survive this crisis.

For NK their most important markets are flying "white shoes" passengers to MCO (Disney, Universal, et. al.) and FLL (the cruise lines). Sadly, all the Orlando attractions are shuttered and Port Everglades' Cruise Terminal is at a standstill. The longer they stay closed, the more quickly it will drain down NK's cash. And with their new, highly-leveraged Airbus fleet, a fading cash position will make repossessions a real possibility.

F9's business model is even more nebulous during these crazy times. They are not a market leader at most of their stations, except for Trenton. They cater to low-yield discretionary flying, which will be slow to come back after this economic collapse. They also have a fleet of new, but highly-leveraged Airbuses that will bleed cash quick, even if they are parked.


B6 also does a lot of business in Florida, but they could also use FLL as a jumping point for more LatAm service and the additional 30 A321s would allow B6 to retire its high-time A320s. This may also be B6's only way to grow beyond being an East Coast regional carrier.


I think B6 specifically said that they plan to make FLL a connecting hub to Latin America. MCO might very well follow in its path.

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