More details of what really went on during the F9 auction.

[profit]

Cutting pilot costs "is the only way Republic's Frontier survives," he said Friday, noting that Republic is in the process of switching out bigger planes for smaller ones with Midwest Airlines, the Milwaukee-based carrier that Republic officially bought July 31.

Investors had bid up Southwest's shares 20 percent since July 30, when the airline announced its intention to bid on Frontier. Southwest shares fell 19 cents to $9.08 Friday, while Republic's shares rose 60 cents to $6.60.

NOTE - Before anybody freaks out about Cordle's comments - he called FAPA trying to peddle his wears as help with the SWA bid. After conducting our due diligence we decided to run, not walk, in the other direction. Once again - it's the block hour cost not the rate!

Unfortunately, I think Bedford will quote some scripture, then proceed to sodomize F9 pilots in a brutal way. My prediction? You guys will wish you got stapled instead.

 

[mayoplane]

I love F9 guys and RAH better not screw them. We got to have a drink with F9 guys on our overnight last night. When we take our uniforms off for some drinking time, we are all just bunch of pilots who are trying to pay our bills flyn jets. Good luck to you all.

 

[runwayjockey]

SWA is not naive! Got a look at the books free of charge. Appeased SWAPA and pilots during TA negotiations, by allowing the pilot group to make or break the deal. With 2 billion in cash out bidding Republic was not a problem. So what if SWA loses money in DEN short-term, it only puts that much more pressure on the competition operating on already very slim margins. Clearly with 1 weak competitor and another badly wounded it's only a matter of time before someone bleeds to death in DEN.

 

[USMC319]

SWA is not naive! Got a look at the books free of charge. Appeased SWAPA and pilots during TA negotiations, by allowing the pilot group to make or break the deal. With 2 billion in cash out bidding Republic was not a problem. So what if SWA loses money in DEN short-term, it only puts that much more pressure on the competition operating on already very slim margins. Clearly with 1 weak competitor and another badly wounded it's only a matter of time before someone bleeds to death in DEN.

Is that what they are teaching at ERAU now days? Wow.

 

[SWA/FO]

No they teach this $hit in the USMC!

 

[GuppyWN]

You don't have to outrun the bear - you just have to outrun the other guy.

Gup

 

[StopNTSing]

I think that if F9 was that important for WN to acquire, GK would never have held on to the labor contingency clause. WN has 2+ Billion in the bank. They had the money to up the offer if they wanted to, and GK could have removed the clause if he needed to. Who knows? Maybe those guys in DAL aren't "naive". Maybe there is a plan B. Which might include RAH dropping a $150 million claim to secure their acquisition. And WN spending $0 dollars to appease their pilots. (bargaining chip during section 6 negotiations). Just maybe, WN is "naive" like a fox.

Bingo. I believe F9 was a target of opportunity that was interesting to GK if it could be had on the right terms....with the primary one being the pilots approving the TA back in June. It had specific language that was tailored to an F9 acquisition and would have left SWAPA with far less negotiating leverage than we had during last week's saga. The TA 'no' vote caught SWAPA and SWA completely flat-footed and having to scramble to salvage an F9 deal. There was precious little time to get labor agreements ahead of the auction deadlines, and our SWAPA prez, having suddenly realized he cannot take his pilots for granted anymore, got religion in a big way and actually listened to what we were asking and went to bat for our interests. Similarly, I believe Gary K. finally saw past his bean-counter roots and realized if this goes forward without labor harmony, he would have a huge mess on his hands. So he just decided to walk when it got too hard.

Fact is, there was nothing in this deal that SWA could not duplicate in-house over the next 2-3 years if they set their corporate will to it. This target of opportunity simply proved to be too costly in terms of potential labor unrest, bad PR ("Save the Animal Tails!" ), and the other unavoidable headaches that go with airline M&As.

I firmly believe that if the pilots had approved our TA:

1) SWA would have had the winning bid
2) All the unions at SWA & F9 would end up in binding arbitration and set the stage for years of labor unrest ala US Airways/America West
3) Our current SWAPA president would move over to his new cushy mgmt job in Flt Ops
4) The SWA "Culture" as we know it would be dead....we'd truely be the newest legacy airline

I'm feeling very lucky this week...

 

[GuppyWN]

Nail meet hammer.

Gup

 

[dago]

This deal was personal to me however looking at the buisness interests involved I do not see any possibility of Frontier existing in its current form. DEN will be the EMB country with a few Airbus flights on routes to Alaska maybe keep Costa Rica. Why on earth would an established regional decide to start paying their pilots a realistic wage. It is over for Frontier as it was! Do those 190's have tv's yet?