masseybrown
Posts: 5462
Joined: Wed Dec 11, 2002 2:40 pm

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 9:39 pm



Quoting N1120A (Reply 44):
Quoting MasseyBrown (Reply 33):

Look at their stock graph for the last 5 years. Jan '03 is was about $14; today $12 and change.

Which isn't a huge difference and more importantly the stock isn't volatile or at risk for being rendered worthless thorough a reorganization.

It's quite a difference (loss) if you factor in lost opportunity costs and inflation along with the ~10% capital loss. There have been nice trading opportunities along the way, but the intermediate term holders are underwater and have a right to be dissatisfied.
 
rfields5421
Posts: 6050
Joined: Thu Jul 19, 2007 12:45 am

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 9:47 pm



Quoting Bobnwa (Reply 47):
Why do you think the Southwest stock has been a particularly good stock to buy and sell.

The best performing stock a few years ago was AAL - because it was selling for below $2 and everyone thought it was going to declare bankruptcy. They though the millions of shares purchased below $2 were money flushed down the toilet. Less than a year later it was selling for $24.

The quote right now on LUV - Southwest Airlines is $12.84.

Over the past 5 years - the stock has been as low as 12 and as high as 19. It's currently near it's lowest point in a couple years.

There were huge run ups in 2004 and 2006. But the one worry for investors which LUV has never had is the fear of loosing everything with bankruptcy.

Frankly, I'm too poor a gambler and worked too hard for my money to play the up and down buying and selling game on Wall Street. But LUV has worked for many folks. In a very unpredictable airline industry - Southwest tends to be the most predictable of the group.

The pension funds and other huge investors find LUV to be a safe haven, and they like to buy it right before the quarterly announcements. Not because SWA does so good, but because their numbers are usually one of the twor or three best in the airline segment.
Not all who wander are lost.
 
justloveplanes
Posts: 1014
Joined: Thu Jul 08, 2004 5:38 am

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 9:58 pm



Quoting Flighty (Reply 23):
Long term planning is good, but it's always wise to put in the same sentence, that you're doing it for long term shareholder well being. Otherwise, shareholders should kick the CEO out. WN must have one amazing sweetheart board of directors. The way WN burns its hedged jet fuel, rather than selling it, is Exhibit A.

Instad of the shareholders booking hedge profits, the money gets rolled into the airline, new 737s, etc, as if WN is afraid to book gains. Instead, it wants to prolong huge cash balances on the airline side... to pay pilots and executives for the next decade. Shareholders be damned.

I disagree with this. Southwest is not in the commodity trading business, they run an airline. When they get a competive advantage to grow the business they know are in, that is what they need to do and so they burn their hedges instead of selling them. WN doesn't need cash, it needs cheap fuel. In fact their long term reinvestiment philosophy is why they have the highest market cap of any US airline (I doubt you'll see shareholders complain about that...) and why this thread even exists. Their solid financial position, due to hedging et al, will allow them to invest strategically for the long term, including acquisitions and keep that market cap, 2 x what AA's is. It's happened before, when other carriers are pulling back WN is picking up the scraps. Same song next year, but it looks like they have their eyes on an entire dinner.
 
sjc4me
Posts: 226
Joined: Thu Jul 13, 2006 11:43 pm

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 10:00 pm



Quoting Miaami (Reply 6):
I think an AA/WN combination would work. Both HDQs in Dallas, common fleet. AA could concentrate on Intl routes and WN on Domestic.

I personally think this is one of the worst things I've ever read on here. What exactly about both of their fleets is common? How about, not one single thing? 737/738s are not common in that the 738s require an extra FA on board (which is a big deal scheduling wise for WN). Not to mention they have completely opposite business plans and as stated before, the two airlines would probably rather stick hot coals up their butts than work together.
Unable.
 
User avatar
MKE22
Posts: 199
Joined: Sun Nov 18, 2007 4:58 am

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 10:18 pm

I wonder if it could happen with YX. Probably not, but it would be interesting to look at.
Similar fleet in Boeing 717s and 737s. 2 Midwest hubs in MDW and MKE, would it work? The airline would sort of shape out to look more like FL in terms of fleet then. I say it's most likely going to happen with FL though as of now.
 
DfwRevolution
Posts: 9292
Joined: Sat Jan 09, 2010 7:31 pm

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 10:54 pm



Quoting N1120A (Reply 20):
I like the Sun Country idea as well. It would allow them to enter MSP without the likely road blocks being put up by the NW friendlies who run the place. I think the seasonals would either be dropped or kept year round if they are strong enough performers.

No matter who WN looks to acquire, they may take the core operations and incorporate them directly into Southwest' own operations while leaving the merger partner as a wholly-owned subsidiary to continue operating in the "secondary" market.

In the case of Sun Country, WN could perhaps take over all the domestic stuff from MSP and the US-CUN traffic with their own aircraft. WN would then own the Sun Country brand and allow them to keep operating a small subfleet of aircraft for the Caribbean and smaller Latin American markets, obviously selling tickets through/with Southwest.
I have a three post per topic limit. You're welcome to have the last word.
 
N1120A
Posts: 26555
Joined: Sun Dec 14, 2003 5:40 pm

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 10:56 pm



Quoting DfwRevolution (Reply 55):

No matter who WN looks to acquire, they may take the core operations and incorporate them directly into Southwest' own operations while leaving the merger partner as a wholly-owned subsidiary to continue operating in the "secondary" market.

In the case of Sun Country, WN could perhaps take over all the domestic stuff from MSP and the US-CUN traffic with their own aircraft. WN would then own the Sun Country brand and allow them to keep operating a small subfleet of aircraft for the Caribbean and smaller Latin American markets, obviously selling tickets through/with Southwest.

Isn't this essentially what they tried, and failed with the take over of Muse Air/TransStar?
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
socalfive
Posts: 474
Joined: Sat Mar 10, 2001 5:37 am

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 11:18 pm



Quoting Sxf24 (Reply 18):
It would give WN a greater presence on the East Coast and a excellent replacement for the 735s.

HUNH? What??

If anybody reads that entire article the whole issue is speculative and one answer to many questions. It IS NOT the subject of the article. This means it was discussed as a possibility and Kelly did make mention of the fact that seniority and culture issues amongst the myriad of other issues have to be closely looked at. FL is not likely a candidate even though Kelly mentioned Atlanta as a city people would like to SW operate out of. SW is far too stable and set in their ways to pull an ego move for a merger of anything as big as FL, too difficult to digest to risky to the culture and not to mention FL would want no part of it. READ the article guys, this is half-baked and typically half-cocked subject matter.
 
dl767captain
Posts: 1206
Joined: Wed Mar 07, 2007 8:51 am

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 11:19 pm



Quoting Iloveboeing (Reply 41):
But WN has been moving away from an "all low fares" strategy. They are trying to attract more business travelers. By acquiring AA, they would gain access to places like DFW, ORD, BOS, JFK, and MIA and they would have an international network. As I said earlier, the AA employees might like being under the leadership of WN management rather than the current management.

Ya but WN is not currently set up to do international routes (not to the extent of AA) so it would be quite a challenge.
 
vega
Posts: 1161
Joined: Sat Aug 27, 2005 8:56 am

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 11:29 pm



Quoting STT757 (Reply 21):
I could see WN taking over US Airways:

WN takes over most Domestic ops, a spin off of US operates the International flights and some full service Domestic flights.

WN takes over all of US Airways LGA and DCA operations.

WN takes over PHL and PHX domestic operations.

Charlotte becomes a new WN "Hub", transformed to a WN style hub ala PHX, PHL, BWI, MDW etc..

I don't see this as far fetched at all. WN has stated in several Analyst conferences and publicly to the press, that they want to expand into the international market. Many seem to interpret that as a relationship with ATA. If they acquired US, they'd have a ready made set up at PHL with their current/projected flights, any non-overlapping US domestic flights and the existing US international services - as well as a cadre of long haul/ultra-long haul aircraft in the firm order pipeline for delivery in 2009 and beyond. If WN developed this approach, it seems unlikely they'd use CLT as a Hub, or retain BWI at it's current levels. I'm certainly not bashing CLT or BWI, it's just that in such a scenario WN would appear to have to focus domestic feed to PHL and not BWI which is a mere 100 miles distance and CLT just doesn't have the domestic O&D to support a conservative stand-alone Hub operation. Regardless, it would be interesting to sit back and watch the SW management posture take over Tempe based US.
We are but a moment in this vast Universe and when gone we will never have existed.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 11:32 pm



Quoting DfwRevolution (Reply 19):
El Al and IranAir merging.

...now that would be a great social experiment.. biggrin 

Quoting MasseyBrown (Reply 33):
Look at their stock graph for the last 5 years. Jan '03 is was about $14; today $12 and change.

...compared to the stock of other carriers, WN actually isn't doing too bad since Jan '03.. no 

Quoting Sxf24 (Reply 18):
WN no longer holds any interest in ATA. Since ATA is no longer a public company and has little value to WN,

...just because TZ isn't a publicly traded company doesn't necessarily mean WN doesn't hold any interest in them. IIRC, WN still have a board member on the TZ board (85% sure on that) and they certainly have extensive code-sharing...not to mention, along with its fleet, WN lists TZ's fleet on its page....

Quoting Sxf24 (Reply 18):
FL is a most higher possibility

...that, I can see happening... yes 
"Up the Irons!"
 
ikramerica
Posts: 15061
Joined: Mon May 23, 2005 9:33 am

WN(Southwest) CEO - We Might Make An Acquisiton

Thu Dec 20, 2007 11:37 pm

It will be FL + WN if it happens. FL has indicated their desire to merge with the failed Midwest bid, and WN shares fleet (outside of the 717, which isn't an issue as they can remain based in ATL for southeast USA flights under 1000 miles) and could use FL to become stronger in the southeast.

WN could also dump older 733s in the process.

Quoting RL757PVD (Reply 5):
I think its essentially... "If someone else buys an airline, we will too". nothing really new, but just confirming whats been speculated.

Just like CO has said. If consolidation begins, CO will consolidate. They'll have to. I think WN is saying the same thing, but making it clear they will look to acquire, not be acquired, and that points to someone like FL, or I suppose AS.
Of all the things to worry about... the Wookie has no pants.
 
SPREE34
Posts: 1738
Joined: Tue Jun 29, 2004 6:09 am

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 12:09 am



Quoting Bobnwa (Reply 42):
The dividends have been negligible.

Dividends non the less, vs most of the other carriers.
I don't understand everything I don't know about this.
 
crj200faguy
Posts: 182
Joined: Wed May 30, 2007 12:07 pm

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 12:38 am



Quoting VictorKilo (Reply 17):
SY comes to mind as the most likely to fit the bill, if the price was right.

I think SY is probably going to get bought out next year. My prediction was AIr Tran, but I think this works too. I don't know how well Minnesotans will be able to handle losing their sacred "free" cheeseburger when the buyout happens.  Smile
 
scxmechanic
Posts: 479
Joined: Sat Dec 25, 1999 10:20 am

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 1:16 am

When exactally does the Wright Amendment come to an end? Sun Country has been using DFW as somewhat of a focus city which could be easily moved to DAL for International traffic. Sun Country does own several route authorities to various Mexican destinations that could/would be benifical to SWA in a merger or some type of code share deal.

I'm not sure of the exact authorities SY owns but I'll do some digging and try to find out. I know when I worked there, they were applying for many places in Mexico.
 
User avatar
TZTriStar500
Posts: 891
Joined: Sat Jan 03, 2004 1:33 am

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 1:20 am



Quoting SPREE34 (Reply 10):
Already a stock holder and code share. buying the whole of ATA wouldn't give them anything they can already take advantage of now.

WN is no longer a shareholder. They were bought out in late 05 by Matlin Patterson during the last MDW gate deal along with debt forgiveness.

Quoting Mcamargo (Reply 15):
But the code-share is only for select markets, isn't it?

I know it wouldn't allow me to book a flight from HRL-Hawaii a year or so back when I was browsing around from fares.

Yes, select markets, but more due to WN.

Quoting Sxf24 (Reply 18):
WN no longer holds any interest in ATA. Since ATA is no longer a public company and has little value to WN, I don't see it as a logical choice.

Correct. The only value is in the codeshare and no reason to acquire an entire airline to preserve it.

Quoting N1120A (Reply 20):
It has value for the fleet and Midway gates

What value? TZ only has leases on 12 738s and 1 MDW gate that would be of mild interest.

Quoting JustPlaneNutz (Reply 24):
AQ may be having a firesale soon. Buy them, order up some 738 or 739ERs (sorry ATA, we're gonna fly our own metal to Hawaii) and WN will soon own the islands the way they do California. FYI--Hawaii has 4 (IIRC) of the top 35 US domestic city pairs .

They can buy AQ, but the TZ codeshare stays until 2012. It was a 7 year deal with certain exclusivity that TZ operate the routes.

Quoting Sxf24 (Reply 26):
The MDW gates do have some value, but they are relatively few left and it would be difficult to justify the cost of acquiring what amounts to a military charter operation.

Only 1 gate lease left and TZ as a whole is NOT for sale. Too important a part of Global to sell and there are virtually no scheduled service assets to acquire except for gate leases and airplane leases.

Quoting Jacobin777 (Reply 60):
...just because TZ isn't a publicly traded company doesn't necessarily mean WN doesn't hold any interest in them. IIRC, WN still have a board member on the TZ board (85% sure on that) and they certainly have extensive code-sharing...not to mention, along with its fleet, WN lists TZ's fleet on its page....

No, like I said above WN has no financial interest in TZ and no board member. They were bought out 2 years ago.
35 years of American Trans Air/ATA Airlines, 1973-2008. A great little airline that will not be soon forgotten.
 
N1120A
Posts: 26555
Joined: Sun Dec 14, 2003 5:40 pm

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 1:22 am



Quoting SCXmechanic (Reply 64):
Sun Country has been using DFW as somewhat of a focus city which could be easily moved to DAL for International traffic.

Under the agreement to lift the Wright Amendment, DAL is domestic only for airline service.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
AA777
Posts: 2361
Joined: Thu May 20, 1999 7:07 am

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 1:58 am

I dont think an AA/WN merger will happen. They are saying they want to acquire another airline. Does WN really have that kind of financial power? Moreover, what kind of an airline would that create? A major-LCC and a legacy merging. Would WN become more like AA or would AA become more like WN. . . . I just don't think it fits at all. What would happen to AA's international network, AA benefits. They are two totally different airlines, and I dont think either would really benefit from a merger. So they already share HQs in Dallas...whoopee.

I think its much more likely to see WN merge with another LCC, like Air Tran. Remember that FL has a stronger presence on the east coast and they also now have a common fleet type with the 737.

-AA777
 
OPNLguy
Posts: 11191
Joined: Tue Jun 15, 1999 11:29 am

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 2:35 am



Quoting Ikramerica (Reply 61):
WN could also dump older 733s in the process.

It's already started. N319SW was retired last week, and two more go by 12/31. Another three go in January. All are leased birds.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
devildog2222
Posts: 47
Joined: Thu Mar 02, 2006 5:44 am

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 2:46 am

I would just like to say that all of you are way off bases with your picks of airlines. You'll be very, very surprised with the selection.
 
D328
Posts: 225
Joined: Fri Jul 13, 2007 1:50 am

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 3:01 am

AA buy out WN, get rid of the so called "

Quoting N1120A (Reply 30):
WN does offer a superior main cabin product as far as comfort goes.

" the cattle call is superior product? I don't think so. But AA buy WN get rid of the WN name redo the 737s and there is the MD80 replacement, not direct replacement but shorterm till the 737 replacement comes along. And then one less annoying LCC in the US.
 
N1120A
Posts: 26555
Joined: Sun Dec 14, 2003 5:40 pm

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 3:11 am



Quoting D328 (Reply 70):

" the cattle call is superior product?

Superior leg room. Superior on-board service. Superior fare structure. Egalitarian seating choices

Quoting D328 (Reply 70):
But AA buy WN get rid of the WN name

Is never going to happen

Quoting D328 (Reply 70):
And then one less annoying LCC in the US.

 rotfl  rotfl 
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
catdaddy63
Posts: 229
Joined: Wed Apr 18, 2007 8:27 am

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 3:25 am

Some relevant points to consider:

1. WN has already slowed delivery of new aircraft due to slowing growth.
2. WN has stated they would like to start international flying in a few years (even if only through code share.)
3. They have also stated that they are searching for revenue growth from other areas.

So, why would they not look at something like World? Established cargo operations, as well as charter ops should provide good revenue growth. No overlap as far as domestic passenger ops. Probably much less problems with labor. Not a lot of risk for WN for probably a decent increase in revenue and profit. I think something like that makes more sense than buying and gutting a legacy or a LCC for that matter.
 
silentbob
Posts: 1591
Joined: Tue Aug 15, 2006 1:26 pm

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 3:34 am



Quoting STT757 (Reply 21):
I could see WN taking over US Airways:

US pilots would never work under the WN contract and WN would be crazy to want any part of the that particular labor group. Also consider the vast differences in strategies. WN tries to right-size markets by adding or removing flights while US does it with changing aircraft size. Culture, strategy, fleet type, none of it matches up in any way, shape or form.

Quoting N1120A (Reply 25):
Quoting Flighty (Reply 23):
WN has been screwing its shareholders for years. (5 years).

I don't see how. WN actually pays a dividend, which is pretty amazing for an airline.

Dividends don't inspire most investors anymore, they want massive fluctuations so they can make their money off of transactions. I would say that (for an airline) WN would be a good buy right now. Nobody is in a stronger financial position than they are to handle any potential economic troughs or changes in the air transport landscape.
 
JumboBumbo
Posts: 168
Joined: Fri Aug 22, 2003 1:17 pm

WN(Southwest) CEO - We Might Make An Acquisiton

Fri Dec 21, 2007 3:42 am

B6 anyone?

They're market cap as of today is $1.14B (about 13% the size of WN's market cap). It would be a great way to quickly acquire a greater presence in the Northeast, as well as international service to the Caribbean.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

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

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

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

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos