SWA isn't buying anyone!

[roughneck]

Lots of rumors, but they are just that. We are pulling out all of the stops in the revenue game trying to get our profits back up for the investors. We are going to continue to grow at a moderate pace and wait this thing out.

If oil stays around $75, you can expect the long awaited industry consolidation to occur by necessity in 6-18 months. One, maybe two, major US cariers will go away and the remaining will consolidate. AThe government will not interfere this time around and will actually incourage consolidation. No bailouts this time. This will fix the capacity issues for a decade or so.

When and if this happens, I expect SWA will be a major player in the consolidation but probably only assets, routes, slots, etc. We will probably go after a shuttle in the Northeast, and we will look to move into several large markets that we don't currently serve. MSP, ATL, CLT, Hawaii.

We will most likely announce a new codeshare partner this fall that will give us International reach and we will look to start Mexico, Canada, Carribean ourselves in 5 years.

I know that isn't as much fun a spreading rumors about a merger, but that is the likely way this will playout for SWA in the next 6-18 months.

 

[General Lee]

Lots of rumors, but they are just that. We are pulling out all of the stops in the revenue game trying to get our profits back up for the investors. We are going to continue to grow at a moderate pace and wait this thing out.

If oil stays around $75, you can expect the long awaited industry consolidation to occur by necessity in 6-18 months. One, maybe two, major US cariers will go away and the remaining will consolidate. AThe government will not interfere this time around and will actually incourage consolidation. No bailouts this time. This will fix the capacity issues for a decade or so.

When and if this happens, I expect SWA will be a major player in the consolidation but probably only assets, routes, slots, etc. We will probably go after a shuttle in the Northeast, and we will look to move into several large markets that we don't currently serve. MSP, ATL, CLT, Hawaii.

We will most likely announce a new codeshare partner this fall that will give us International reach and we will look to start Mexico, Canada, Carribean ourselves in 5 years.

I know that isn't as much fun a spreading rumors about a merger, but that is the likely way this will playout for SWA in the next 6-18 months.

Go after a Shuttle in the NE? American Eagle will be selling you a Shuttle? Where do you make this stuff up? USAir won't get rid of theirs, and the only way Delta or USAir would give one up is if they merged together, and that didn't seem to go well the first time. Sure, there could be some mergers, but I don't think anyone will be selling their best assests if they don't have to. Also, most legacies are expanding INTL routes because they don't have the same pressures as Domestic routes, and the LCCs in the US will feel plenty of pressure due to the new entrants. They have no room to expand outwards because they don't have the planes, and the legacies are shifting planes away from the domestic arena and outward to the more profitable INTL side. I think there could be some LCCs merging, no doubt.

Bye Bye--General Lee

 

[roughneck]

Sure, there could be some mergers, but I don't think anyone will be selling their best assests if they don't have to.

If oil stays around $75 they will have too. Maybe you need to reread my post. I think 1 maybe 2 carriers won't even be around long term. Delta possibly being one of them.

 

[PCL_128]

I think 1 maybe 2 carriers won't even be around long term. Delta possibly being one of them.

Delta will still be standing years after every LCC has ceased to exist or been swallowed up by the legacies. None of the legacies are going anywhere.

 

[PuffDriver]

Sure, there could be some mergers, but I don't think anyone will be selling their best assests if they don't have to.

If oil stays around $75 they will have too. Maybe you need to reread my post. I think 1 maybe 2 carriers won't even be around long term. Delta possibly being one of them.

This stuff cracks me up. The honeymoon is ending at SWA. Labor costs going up. Fuel costs going up. Destinations going away. You go into ATL, MIA, ORD, LGA, JFK, ou will get your clock cleaned. Assets at SWA worth more than the company. We do live in interesting times. The industry darling is now suceptible to market forces. BTW, that 1 or 2 carriers may include Delta, or it might include SWA. My money would be seeing SWA go away. Either way, I'm "hedged".

 

[Noserider76]

.

If oil stays around $75 they will have too. Maybe you need to reread my post. I think 1 maybe 2 carriers won't even be around long term. Delta possibly being one of them.

What a rocket scientist post. With no international exposure, fully at the mercy of the domestic market, and dissapearing fuel hedges, I give SWA about the same chance as DL of being "one of them."

 

[Whataburger]

Delta will still be standing years after every LCC has ceased to exist or been swallowed up by the legacies. None of the legacies are going anywhere.

.......whether it take filing Ch.11 again or gov't bailouts right?

 

[328dude]

What a rocket scientist post. With no international exposure, fully at the mercy of the domestic market, and dissapearing fuel hedges, I give SWA about the same chance as DL of being "one of them."

Being at Southwest, I have to agree with your statement. I don't classify us any less vulnarable that anyone else, even Delta. I agree that Delta will be in the mix for a long time. (God, I can't belive I said that. Don't give me to much grief General.)

 

[Whataburger]

How many years was Delta around before its "international exposure?" The answer is 30 years to even go to the Carribean. Many more years to cross the pond. We are but a wee-baby where the sky's the limit.

 

[Eagle757shark]

I don't know where Southwest is going to get gates in Atlanta. AirTran and Delta have their hands full trying to get more gates that don't exist. NO new terminal is going up in the near future in Atlanta, so unless they purchase one of the two big tenants in Atlanta, I doubt they will be doing service there.

 

[atafan]

We will most likely announce a new codeshare partner this fall that will give us International reach and we will look to start Mexico, Canada, Carribean ourselves in 5 years.

Gary K already told you who that will be, ATA, or GAL. Don't expect for SWA to be doing any of that flying anytime soon. I expect SWA to do Int'l only as a code share for years to come, at least five maybe more. I know that you guys are working hard with scope and I expect SWA will hold hard on this new flying.

I also expect to see the LUV fest SWA pilots have with management to be tested soon.

It will get real interesting.

 

[Whataburger]

Gary K already told you who that will be, ATA, or GAL. Don't expect for SWA to be doing any of that flying anytime soon. I expect SWA to do Int'l only as a code share for years to come, at least five maybe more. I know that you guys are working hard with scope and I expect SWA will hold hard on this new flying.

I also expect to see the LUV fest SWA pilots have with management to be tested soon.

It will get real interesting.

The speed and precision in which our company can do something has proven itself, and it has surprised many people along the way. When/if we decide to go international, it'll get done quickly. Our company is very proficient, can move paperwork quickly, and knows how to get 'er done. Let's face it, flying international ain't rocket surgery. There are start-ups these days that fly int'l. I hope we have a harmonious relationship with ATA, but I believe in the next months and years there will be a lot of surprises on many fronts.

 

[AC560]

None of the legacies are going anywhere.

TWA, Pan Am, Eastern.....part of the reason those guys are gone is because they also had the attitude of we ain't going anywhere. Everyone is vulnerable.

 

[ATR-DRIVR]

NO new terminal is going up in the near future in Atlanta, so unless they purchase one of the two big tenants in Atlanta, I doubt they will be doing service there.

Um..ok.. so what are they building east of E concourse?

 

[atafan]

When/if we decide to go international, it'll get done quickly.

I couldn't agree more! I know that if SWA wanted to start service to Mexico they would do it quickly. I give SWA a lot of credit for doing things better and differently. SWA has seen that they can generate a lot of "risk free" revenue by this codeshare thing. They sell tickets internationally and still operate pretty much the same as they always have by allowing another airline shoulder the expense and high risk of the international legs.

How SWA can accomplish this while keeping their employees happy has yet to be revealed. I believe that this is the direction SWA will take.

I expect to see some brilliant moves.

 

[PCL_128]

Um..ok.. so what are they building east of E concourse?

New international concourse. Won't be done for almost two more years, from what I've heard.

 

[capt1900]

Southwest has something that most airlines don't, caring employees!

 

[GuppyWN]

Southwest has something that most airlines don't, caring employees!

Whatever. Why don't you F-ck off!

LOL.... sorry bro. Couldn't let that opportunity pass.

Gup

 

[klr1395]

I don't know where Southwest is going to get gates in Atlanta. AirTran and Delta have their hands full trying to get more gates that don't exist. NO new terminal is going up in the near future in Atlanta, so unless they purchase one of the two big tenants in Atlanta, I doubt they will be doing service there.

Since the NAS closed Dobbins in Marietta is a possibility.......

 

[Foxcow]

Since the NAS closed Dobbins in Marietta is a possibility.......

Interesting... But I would have to see it to believe it. For some reason, I thought NAS still has some time left before it closed.

 

[Idiot Police]

Cock-a-doodle-doooo!!!!!!

 

[Eagle757shark]

Um..ok.. so what are they building east of E concourse?

Like I said...NO new terminal is going up in the NEAR future. I don't know what they are building East of terminal E right now. But currently new green grass is now covering that nice smooth vacant land. This after they put a new tunnel in, not sure what for. I believe that new terminal is on a indefinite hold for right now.

 

[STL717]

Ok....

What happened to Southwest being vulnerable for someone to come in and take over with a LBO.

 

[STL717]

ATL's international terminal expansion will be complete in late 2010 or early 2011.

 

[Andy]

If oil stays around $75, you can expect the long awaited industry consolidation to occur by necessity in 6-18 months. One, maybe two, major US cariers will go away and the remaining will consolidate. AThe government will not interfere this time around and will actually incourage consolidation. No bailouts this time. This will fix the capacity issues for a decade or so.

BS. Unless the commercial paper market gets flowing again, M&A activity's pretty much done for this business cycle. Take a look at how many M&A deals fell through last quarter. Then take a look at how many investment banks took it in the shorts last quarter due to not being able to profitably sell the paper from those deals. Some of those deals (Chrysler/Cerberus) resulted in some pretty hefty losses for investment banks. http://www.portfolio.com/views/blog...07/25/banks-stuck-with-unwanted-chrysler-debt

Due to all of the bad paper that we've floated worldwide with MBSs (mortgage backed securities), buyers of commercial paper are more scarce than a full fare first class passenger. So forget about M&A activity; the last big one was America West/USAirways, and it'll be the last one for quite some time.

As for any consolidation reducing capacity, you are dead wrong. There are near zero barriers to entry into the airline industry. A startup can get going for less than $100 million (not that hard to raise in an IPO when the market's on a roll) and have brand new fuel efficient aircraft to boot. And they can find newhire employees who work for 1/3 of the salaries paid by Southwest. In the future, there will be an endless supply of pilots willing to work for less pay than you and I. Forget about seeing pay raises that keep up with inflation. Established airlines are going to have to continue to pay low wages in order to survive in this environment.
If you think that Skybus and VA wages are bad, just wait until the next 'great' startup pops up with even lower wages. And I always love reading the justifications by those who are willing to whore themselves out for lower and lower wages.

 

[Andy]

TWA, Pan Am, Eastern.....part of the reason those guys are gone is because they also had the attitude of we ain't going anywhere. Everyone is vulnerable.

Very true. It only takes one bad CEO or even one bad corporate decision to knock a highly profitable airline down to mediocre.
Two bad CEOs/decisions/events and you're staring Chapter 11 in the face.
Three bad CEOs/decisions/events and you're praying that your company doesn't go Chapter 7 and become a footnote in the annals of aviation. http://en.wikipedia.org/wiki/List_of_defunct_airlines

The margins in the airline industry are razor thin. If anyone hasn't had a chance to watch the CNBC special about American Airlines, I highly recommend it. http://www.cnbc.com/id/18576787/site/14081545/ It should be required viewing for all airline employees.


No airline is invulnerable to bad times or liquidation; anyone who thinks differently is setting themselves up for disappointment.
I can remember sitting side seat on the 727 when we got C2K at United. I can't tell you how many young FOs were buying their Captain's houses. I was in shock at how these guys thought that the good times would last forever. I guess that I'm fortunate that I got a divorce in early 01, reducing me to a cardboard box for living accomodations. I got off of my probation year on 9 Sep 01 and didn't see year two pay until Oct 01. By that point, it was pretty clear to me that I'd be on the street very soon and adjusted my lifestyle accordingly.
My lesson from all of that is to have a year's worth of wages tucked away in savings. If that sounds excessive, it's well worth the extra sleep I'll get at night during an economic downturn.

 

[Andy]

Whatever. Why don't you F-ck off!

LOL.... sorry bro. Couldn't let that opportunity pass.

Gup

ROTFLMAO! Dude, that was FUNNY!

 

[Kharma Police]

Since the NAS closed Dobbins in Marietta is a possibility.......

NAS Atlanta is slated to be turned over to the Georgia National Guard, the AF Reserve Hercs, Army Reserve and Lockheed will remain open. Cobb county would never let airline service into MGE.

 

[HalinTexas]

SWA won't be able to move all that quickly. Any Int'l market they desire to move into will probably already have at least one carrier in it. The competition will be alerted well in advance. The history with SWA is to go into a city with many flights to many destinations. Use the re-entry into SFO or even RSW as a model.

SWA will have to change their system to accomodate assigned seating, countering their recent decision to stick with a modified cattle-call. This is a governement/immigration requirement. Personnel will have to be trained. And if you think you can turn an airplane in 30 minutes with ICE, you got another thing coming.

ETOPS is even harder to acquire than int'l ops. Look at Alaska. They've been working on it for a year and a half or more for limited ops. to HI. 180 minute ETOPS for the B737 is stupid. (Why hasn't Boeing put a RAT/HMG on these things?) Flying to HI with a -700 is insane. To get any kind of yield you need a larger airplane. The real money is hauling freight to HI from the mainland. Aloha has pretty much showed the limitations of the airplane. If GK pushes for HI/ETOPS with the -700 he should be fired.

The above limitations are not necessarily that difficult to learn for crews, but they can be screwed up readily by them. It'll take about a year to train the crews as they pass through recurrent. The difficulty lies in maintenance, dispatch, reservations, and operations, not to mention government sign-off of all the procedures.

SWA needs to develope new, high yield revenue streams. Their non-fuel costs are rather under control, so their's not much savings there. So the alternative is revenue enhancement. Domestic expansion vis merger/acquisition isn't the best path to that end.

 

[SWA/FO]

the sky is falling.... the sky is falling at Southwest (only). Only our costs are going up.. Our easy ride is over, nobody but SWA will have rising costs. No employee from the other carriers will seek to regain their lost $$$$$. SWA is just like TWA, EAL & PAN AM.....get a clue you HOMOs