Airtran may get some of Delta's gates in ATL

[lowecur]

What did USAir have to give up when they had a combo wth AWA? Not much. AWA and USAir went to ORD and DCA, and didn't give up a slot. And, can you see Southwest at ORD? They have MDW covered. Jetblue already serves ORD, along with Spirit. Airtran seems to like MDW as well. I think you are shooting for the stars, and that is all and good, but not much is sticking. If there are redundant routes, then maybe. If NWA only flies to their own respective hubs from LGA and DCA (which they do), then I doubt the DOJ will force them to give up anything.(slots) As far as gates around the system, sure, some will be given away to consolidate into our own terminals. That is probably a given, since we would want NWA planes to eventually park next to ours.....


Bye Bye--General Lee

Little bit different scenerio here GL. Combining the next 4 largest airlines behind AMR into 2 mega airlines will have much more political scrutiny than US/AWA. Although Oberstar is posturing for jobs in MN, he and his committee will set the parameters and agenda for the hearings before both Houses of Congress. You can bet the question will be asked over and over again as to how the public's best interest will be protected with less competition throughout each carriers network and in particular the limited access to their mega hubs by low cost carriers.

You can also expect to have the low cost carrier CEO's called before the hearings to voice their opinions of the mergers. Each will say they believe they should be allowed to happen but with caveats to protect the public......in particular, creation of better access to the mega hubs.

We'll see some good old fashioned arm twisting as each carrier will be forced to explain just how lcc's will be able to obtain more gate space at these critically important cities.

imp: ​

ps: Of course I've forgotten about the political war chests that will be spread around to those seeking re-election.......just to insure that lcc's remain a minor player in the real world. ​

 

[funnyman12]

Airtran has been successfully competing with southwest in BWI and also in MDW recently. In August Airtran was reported as surpassing Southwest as the lowest cost airline (per a few articles). Airtran has made money with comparative weak hedging on fuel. In the next couple of years Southwest costs will continue to increase at a faster rate than Airtran due to fuel hedging. Southwest would need more than 2 or 3 gates in Atl to be a major player. Southwest is an incredible airline with extremely smart management but their costs are rising. Don't short Airtran's ability to compete with anyone. The main way larger airlines are able to hurt Airtran is to flood the market. Not necessarilly a money saving business strategy.

 

[Noserider76]

Little bit different scenerio here GL. Combining the next 4 largest airlines behind AMR into 2 mega airlines will have much more political scrutiny than US/AWA. Although Oberstar is posturing for jobs in MN, he and his committee will set the parameters and agenda for the hearings before both Houses of Congress. You can bet the question will be asked over and over again as to how the public's best interest will be protected with less competition throughout each carriers network and in particular the limited access to their mega hubs by low cost carriers.

You can also expect to have the low cost carrier CEO's called before the hearings to voice their opinions of the mergers. Each will say they believe they should be allowed to happen but with caveats to protect the public......in particular, creation of better access to the mega hubs.

We'll see some good old fashioned arm twisting as each carrier will be forced to explain just how lcc's will be able to obtain more gate space at these critically important cities.

imp: ​

ps: Of course I've forgotten about the political war chests that will be spread around to those seeking re-election.......just to insure that lcc's remain a minor player in the real world. ​

One of the main issues Congress will be concerned with is the loss of jobs. Jobs in their district. Sure they're concerned about the price John Q Public pays for airlines tickets when the camera is rolling but what really matters is the economy. Congress realizes that having a mega-carrier with access to the world does much more for your economy than encouraging a low cost airline that caters to mainly liesure travelers. DLs ATL hub has been a prime consideration for many corporate moves to the Atlanta area. The same holds for the other global carriers.

Anything DL/NWA is forced to divest will come at the expense of jobs which is why I think you'll see them show a plan to expand and create more jobs to get this merger approved with no significant divestitures. Low cost airlines are notoriously stingy with jobs, outsource much of their labor overseas, and the jobs they create are usually low paying. I think you'll see DL dole out jobs to key areas and make sure Congress knows the value of having the world's largest airline as a major player in your home district.

 

[lowecur]

One of the main issues Congress will be concerned with is the loss of jobs. Jobs in their district. Sure they're concerned about the price John Q Public pays for airlines tickets when the camera is rolling but what really matters is the economy. Congress realizes that having a mega-carrier with access to the world does much more for your economy than encouraging a low cost airline that caters to mainly liesure travelers.

I hardly think that having UAL/CAL divest themselves of 10-15% of their gatespace at ORD or any other highly protected hub will mean much in the way of job loss in a district. The only job losses that will be of any significance will be at the mini-hubs that could be shut down - ie: MEM, CVG, CLE, or significant reductions by UAL to IAD or DIA.

Saying that politicians will cater to the international and business market in lieu of the leisure traveler is shortsighted. Do you have any idea what implication the baby boomer retiree's will have on airline travel in the next decade? It's a demographic that has not gone unnoticed by airline route planners.

Lcc's will have their say. Whether it's enough to sidetrack the political strength of the legacy's is another matter.

imp: ​

 

[Kharma Police]

My change for a nickel....

Bet on SWA getting gates in ATL, outbidding Bob Fornaro and Airtran yet again...launching routes not unlike the Denver expansion and really putting the squeeze to Airtran like they did to Frontier....

AT management is trying to do something with 65 more jets and needs the government's help making it profitable by starting the Slot debate. I can't blame them.......

(Cue Kharma)

The "Delta Spazz" strikes again!!! (shhhhhh....nobody mention the word "bankruptcy")

 

[Bill Nelson]

Airtran has made money with comparative weak hedging on fuel. In the next couple of years Southwest costs will continue to increase at a faster rate than Airtran due to fuel hedging.

That is probably one of the reasons SWA WILL buy AirTran.

 

[General Lee]

I hardly think that having UAL/CAL divest themselves of 10-15% of their gatespace at ORD or any other highly protected hub will mean much in the way of job loss in a district. The only job losses that will be of any significance will be at the mini-hubs that could be shut down - ie: MEM, CVG, CLE, or significant reductions by UAL to IAD or DIA.

Saying that politicians will cater to the international and business market in lieu of the leisure traveler is shortsighted. Do you have any idea what implication the baby boomer retiree's will have on airline travel in the next decade? It's a demographic that has not gone unnoticed by airline route planners.

Lcc's will have their say. Whether it's enough to sidetrack the political strength of the legacy's is another matter.

imp: ​

So Anderson making deals with Ohio Congressmen and Senators doesn't mean anything? I can bring up the article with Anderson stating CVG will stick around. Will that be forever? Maybe not. But, Anderson knows he will have to appease many people here and there, and the people of CVG would rather have a legacy with connections to the world rather than another LCC. How is Skybus doing in CHM? Why hasn't Southwest expanded in PIT? There is plenty of room....


Bye Bye--General Lee

 

[Lear70]

I can almost guarantee WN will get a few ATL gates if any become available even if it means outbidding FL for them.

I'd put a c-note on that.

With the new runway open, the new taxiway around the north runway, and a new flow plan that seems to be working well, I wouldn't be a bit surprised to see Southwest try to pick up the NWA gates in Atlanta, and I bet they'll get them.

No big threat to AirTran; not enough of a footprint to put a dent in their operation. But I'd bet on them establishing a presence.

 

[BILL LUMBERG]

Lots of talk of DAL/NWA being forced to divest slots and gates (???) when has anybody had to give up gates??.....

All this talk of SWA's costs going up, what about AT and the whole fleet being leased while SWA, I believe, pays cash for the jets they have.......might be a cost advantage for SWA....

 

[BILL LUMBERG]

The "Delta Spazz" strikes again!!! (shhhhhh....nobody mention the word "bankruptcy")

You can mention the bankruptcy and I'll talk about the Everglades....both dark times, both should be off the table.....

The "Delta Spazz"

 

[400ADude]

Airtran has made money with comparative weak hedging on fuel. In the next couple of years Southwest costs will continue to increase at a faster rate than Airtran due to fuel hedging.

That is probably one of the reasons SWA WILL buy AirTran.

SWA should buy Airtran and keep the employee groups seperate....seniority and pay.

 

[LUalum]

Quote from Lear 70
"No big threat to AirTran; not enough of a footprint to put a dent in their operation. But I'd bet on them establishing a presence."

I hope you are right, I think that any SWA presence in the ATL would have a very negative impact on FL. Somehow with SWA, a small footprint quickly turns into a boot in your axx, to quote the great Toby Keith.

 

[Lear70]

SWA should buy Airtran and keep the employee groups seperate....seniority and pay.

Ummm... ever heard of Allegheny-Mohawk?

The only way they could do that is to buy airTran and either liquidate it and keep the 737's (not enough market cap to make it worthwhile) or buy airTran and keep them separate and shrink them (again, not enough market cap to be economically feasible).

Allegheny-Mohawk prevents an airline from buying another and having two separate companies in operation under one flag name.

 

[Lear70]

Lots of talk of DAL/NWA being forced to divest slots and gates (???) when has anybody had to give up gates??.....

There's always been a price of doing business for large mergers, one of the things that's kept consolidation off for so long.

All this talk of SWA's costs going up, what about AT and the whole fleet being leased while SWA, I believe, pays cash for the jets they have.......might be a cost advantage for SWA....

Evidently not.

You're talking about lease payments versus outright ownership, which is part of non-fuel CASM.

airTran's non-fuel CASM is quite a bit lower than Southwest's. Therefore, the leasing portion of the cost equation must either be better than outright ownership or is being offset in a MAJOR way with something else in the balance sheet.

 

[400ADude]

Ummm... ever heard of Allegheny-Mohawk?

The only way they could do that is to buy airTran and either liquidate it and keep the 737's (not enough market cap to make it worthwhile) or buy airTran and keep them separate and shrink them (again, not enough market cap to be economically feasible).

Allegheny-Mohawk prevents an airline from buying another and having two separate companies in operation under one flag name.

Just keep two different flags, Airtran and Southwest.