Southwest submits proposal to acquire Frontier Airlines

[krewmeel]

I think the Bond MacCaskill law applies here, but the law says we come to an agreement, or on to arbitration. All SWA has said is that without an agreement with the unions, then no deal. We won't go to arbitration. I think if we purchase Frontier, the pilots come too, at least that's what I have heard from some of our union guys in the "know". The question is, will the unions come to an agreement. I would think even a pay protected staple, with the ability to make 140 grand within a few years, as an FO, with a solid company, would be better than taking a chance on Republic.

Personally, I'm all for this, I think it's a win/win for everyone involved. But we have a lot of worry right now amongst our junior pilots. A hard-line stance from Frontier guys would scuttle this thing quicker than anything, IMHO. Fortunately, I haven't seen this, as most I've talked to are excited about the prospects of coming over, and I think the vast majority of us would love to have them.

BTW, the law does not say you can't staple. It says "fair and equitable". And that is for the two unions to hash out. Once again, if they or us decide it's not fair or equitable, then fine. We'll pass. The last thing we need is a big ugly integration.

The law does not say that you cannot staple, that's true, but that is hardly "fair and equitable" is it? The law was written because an entire pilot (and FA) list WAS stapled. The law says specifically that the Allegheny/Mohawk integration shall be used as a reference. This integration basically was an integration by percentile, ie, Joe Smith is 50% at WN and Tom Jones is 50% at F9 so they should be next to each other on the SLI.

Your pilots, especially the junior ones, are unlikely to go for this.....

 

[tzskipper]

You are correct that if this deal with WN goes through frontier will cease to exist before long, however, I think you are wrong about the F9 pilots ALL going to the street. You need to review the McCaskill Bond. This is a buyout, not a finance deal like ATA. SWA never owned ATA, they just gave them money and had a codeshare. There is a big difference. Plus the BK judge will have the employees of Frontier's interests in mind. He will not let this deal go through if it will mean all the employees will go to the street. If that is SWA's intent then RAH will more than likely win the decision. Do yourself a favor and review the bond, you might think differently.

Fwiw, LUV did "buy" ATA last March in order to acquire the LGA slots. It was made evident that any attempt to enforce any CBA provision would be dealt with through an 1113 motion. The BK Judge will not give a rats-ass about the Frontier employees. His interest will be in the estate/creditors only.

S

 

[HalinTexas]

In 2004 SWA acquired an 25% interest in ATA for about $105M in cash and loan guarantees. They, SWA, promptly had one of their own appointed CEO John Denison, http://en.wikipedia.org/wiki/John_G._Denison. ATA could NOT fly any city-pairs that directly competed with SWA. GK talked the union down when they were told that SWA would divest themselves of ATA stock. Late in 2005, Mattlin-Patterson, http://en.wikipedia.org/wiki/MatlinPatterson_Global_Advisors, bought out SWA's shares, but kept JD onboard until he was replaced by his hand-picked successor, Sabodh Karnik, http://en.wikipedia.org/wiki/Subodh_Karnik.

Various announcements by both SK and JD led us to believe that a continued partnership between ATA and SWA would continue for 5 - 10 years.

SWA bought ATA's cert. in liquidation last year, but took no people or equipment, just slots and gates. Hope they have fun in LGA.

 

[Sumo14]

So what happens to all us SWA poolies? Are we getting flushed?

I'm wondering that as well. I hope we hear something from the PD soon as to what our fate may be IF this actually transpires.

 

[Bigoober]

Sumo, did you get the email today. Not much was said but just wanted to make sure you are still getting the "updates".

 

[sshrae]

Fwiw, LUV did "buy" ATA last March in order to acquire the LGA slots. It was made evident that any attempt to enforce any CBA provision would be dealt with through an 1113 motion. The BK Judge will not give a rats-ass about the Frontier employees. His interest will be in the estate/creditors only.

S

I have to respectfully disagree with you here. I think the judge definitely gives a damn about all those employees being put to the street. If that was to happen he would surely approve the rah deal instead that would keep hundreds of DEN people employed. If that is SWA's intent ( I think it is not) the judge does not want to see that. SWA did not buy ATA, at least not while they were still operating. There is a big difference.

 

[krewmeel]

I have to respectfully disagree with you here. I think the judge definitely gives a damn about all those employees being put to the street. If that was to happen he would surely approve the rah deal instead that would keep hundreds of DEN people employed. If that is SWA's intent ( I think it is not) the judge does not want to see that. SWA did not buy ATA, at least not while they were still operating. There is a big difference.

I agree, I think that the judge will give WN a "smell test" to gauge their intentions. If he thinks that LUV is going to go all ATA on our A$$ then he will approve the RAH deal over the SWA one. He is remarkably pro labor in his comments and actions. He is not giving F9 mgt. a lot of breaks.

 

[tzskipper]

I agree, I think that the judge will give WN a "smell test" to gauge their intentions. If he thinks that LUV is going to go all ATA on our A$$ then he will approve the RAH deal over the SWA one. He is remarkably pro labor in his comments and actions. He is not giving F9 mgt. a lot of breaks.

I truly hope so, but looking at past WN transaction and their outcomes, history is not on the F9 side.

S

 

[Sumo14]

Sumo, did you get the email today. Not much was said but just wanted to make sure you are still getting the "updates".

Bigoober, thanks for the heads up and good luck.

 

[Zinger]

Fair and equitable will be for the unions to decide because it will never make it to arbitration. Would the F9 folks rather have;

1- Pay protection at the bottom of the SWA list (a 30% automatic raise or so with a stable airline)

or

2- A future with a slippery CEO at Republic...the Republic that allegedly wishes to get unlimited scope relief.

Option 2 sounds dicey at best. The choice sounds simple.

I think that SWA pilots would see a relative seniority or a ratioed integration as deal breakers. Why piss off 6000 SWA guys to please 600? Why slow their growth and allow others to patch the hole they've already paid for? Why let SWA haters and bad apples onto the list unquestioned with SWA trying to protect their culture? If I was at F9, I would be happy with being at the bottom of the SWA list with pay protection. How can the Republic alternative for them be any better?