Looks Like Delta Will Be #3 Again...Now Who To Buy?

[Daddy]

Agreed, if stock price is any indication, DAL couldn't afford AK. It would cost way to much to purchase just for the increase in market share they would get. Alaska is like Hawaiian, they each have a strong position in the market's they serve and a very loyal customer base. They are worth more as stand alone airlines than they are as merger fodder.

True dat

 

[crxpilot]

Allegiant LOL

Although I concur with your chuckle, actually Allegiant would make a nice investment under the corporate umbrella of another airline. It would not make sense to "merge" under any circumstance but keeping Allegiant as a standalone can make someone consistent money. They have a model that works and has currently been profitable for the last 36 quarters and has more cash than debt. Not a supercarrier by any means but it is profitable! Still, they are better off standalone only.

 

[Boxboy]

Funny how we all sound like as if we are on the Board of Directors. I hope no one buys us, but Alaska is a small fish in a big pond. It is what it is!

 

[Scoot 11]

Oil refineries are nice and all, but will Delta be happy at number three, behind super-American and United?

Ham:
If you know anything about Richard Anderson, he doesn't care about being the biggest. He cares about being the best. Unlike Parker, he doesn't have an ego to float. He was very good at bringing NW/DL together with relatively little to no issues. AMR/US will be a disaster in the making. Parker has shown he can't run a "merged airline." What makes him think he can get AA/US together? The only thing at stake here is Parkers massive ego, and the livelihood of all US/AA/AM West employees. I will be watching this from the sidelines with lots of popcorn. Will be one wild ride.

JMHO
YMMV

 

[On Your Six]

Agreed, if stock price is any indication, DAL couldn't afford AK. It would cost way to much to purchase just for the increase in market share they would get. Alaska is like Hawaiian, they each have a strong position in the market's they serve and a very loyal customer base. They are worth more as stand alone airlines than they are as merger fodder.

DL could always use AK's cash on hand to pay for part of the acquisition, right? And there was a stock split. If US could finance a buyout of AA, anything could be possible. But, I think they like things the way they are now. My guess would be an airbus operator if anything happens at all. Just a guess!


Godspeed!


The OYSter

 

[On Your Six]

Agreed, if stock price is any indication, DAL couldn't afford AK. It would cost way to much to purchase just for the increase in market share they would get. Alaska is like Hawaiian, they each have a strong position in the market's they serve and a very loyal customer base. They are worth more as stand alone airlines than they are as merger fodder.

When an airline has a niche, they get looked at closely by competitors. Nobody is too expensive. If Parker can buy AA, anyone can finance anything. I have a feeling the second round of consolidation will be underway soon after the AA and US deal is figured out. The goal appears to be less competition, period. It will be a bumpy ride for some.


Godspeed!


The OYSter

 

[shon7]

Ham:
If you know anything about Richard Anderson, he doesn't care about being the biggest. He cares about being the best.
YMMV

haha .funniest thing I ever heard. Have you ever flown on Delta. Take Atlanta or New York, throw into that the NWA nasties, gate agents from hell and a "the world done me wrong" attitude. I guess it is the best in a sense!

 

[Dumb Pilot]

Ham:
If you know anything about Richard Anderson, he doesn't care about being the biggest. He cares about being the best. Unlike Parker, he doesn't have an ego to float.

Richard Anderson cares about Richard Anderson, saying that guy doesn't have an ego? Well, maybe compared to Trump he doesn't :laugh:

 

[Scoot 11]

haha .funniest thing I ever heard. Have you ever flown on Delta. Take Atlanta or New York, throw into that the NWA nasties, gate agents from hell and a "the world done me wrong" attitude. I guess it is the best in a sense!

I'm glad you're amused. If you look at the service provided by Delta compared to Us Airways, you'll see the difference. Parker, in his genius, decided to decrease weight on all his airplanes by removing inflight entertainment. Remember when US Airways started to charge for drinks?

 

[Scoot 11]

Richard Anderson cares about Richard Anderson, saying that guy doesn't have an ego? Well, maybe compared to Trump he doesn't :laugh:

Dumb. I'm saying compared to Doug Parker he doesn't have an ego. If you look at the management teams running airlines today, I don't think you'll find better (I hate to use this word) "talent." The ONLY reason Parker wants into the game is because he has to. As I have stated, "merging," US/AA will be fun to watch. Parker has had how many years to integrate US/AM West? How'd that work out for him?

 

[Full of LUV]

Although I concur with your chuckle, actually Allegiant would make a nice investment under the corporate umbrella of another airline. It would not make sense to "merge" under any circumstance but keeping Allegiant as a standalone can make someone consistent money. They have a model that works and has currently been profitable for the last 36 quarters and has more cash than debt. Not a supercarrier by any means but it is profitable! Still, they are better off standalone only.

How profitable would Allegiant be if forced to operate under DAL or SWA contract? How happy would Allegiant pilots be if bought by DAL or SWA or anyone and kept separate with their existing contract? There goes your profit......

 

[IBNAV8R]

DAL could have West coast feed now if they wanted it. No need to add JB. The money is on the other coast.

 

[On Your Six]

DAL could have West coast feed now if they wanted it. No need to add JB. The money is on the other coast.

Tell that to AK airlines.


Godspeed!


The OYSter

 

[Ky.BrownBourbn]

Although I concur with your chuckle, actually Allegiant would make a nice investment under the corporate umbrella of another airline. It would not make sense to "merge" under any circumstance but keeping Allegiant as a standalone can make someone consistent money. They have a model that works and has currently been profitable for the last 36 quarters and has more cash than debt. Not a supercarrier by any means but it is profitable! Still, they are better off standalone only.

You must work at Allegiant, THE airlines with strong unions have scope to prevent this (operating separately) , Seat limitations (for feeders), codeshare restrictions, etc. Even as "SMARt" as the airline executives think they are, they would have a hard time pulling this off. I'm sure you'd love to be bought by an airline with a real contract and real pay but most will not let you be bought and operate separately, That being said, you could be bought by a non union carrier and operate separately, say a Jet Blue or Virgin America (Not sure how their "Pilot agreements" are written) or by someone such as Republic because apparently they can do what ever they want with their unions multiple contracts.

On a high note, Allegiant has a good niche market and all these mergers will only help reduce capacity and drive airfares up which is good for everyone, especially low fare airlines, if they increase their fares as well!

Later,
KBB

 

[xjhawk]

So those of us who have been waiting for years for hiring to start and are over 40 are looking at a couple things. That the smaller national carriers are taking the younger guys...yeah I know, I can't prove a thing but its happening. the other thing we can expect is more mergers and less hiring and more furloughs. That along with we interview at two places and if not given a job offer, there are no other options. Just peachy

 

[ACL65PILOT]

Ham:
If you know anything about Richard Anderson, he doesn't care about being the biggest. He cares about being the best. Unlike Parker, he doesn't have an ego to float. He was very good at bringing NW/DL together with relatively little to no issues. AMR/US will be a disaster in the making. Parker has shown he can't run a "merged airline." What makes him think he can get AA/US together? The only thing at stake here is Parkers massive ego, and the livelihood of all US/AA/AM West employees. I will be watching this from the sidelines with lots of popcorn. Will be one wild ride.

JMHO
YMMV

What RA is out to prove is simple. He wants to prove that his way of running an airline is the correct way in the post CH11 era.

As for who we will marry.

AMR/LCC is far from over and until that is shored up, and no parts are up for grabs by anyone, not much may happen. After that fact, and depending on what DAL buys, and how the HND access issue is resolved you may see a few courses of action.

If we lose out on access in to HND look for a JV with JAL or similar. It that does not work out, look for us to go after HAA.

NKS would be a fallback for flow off the GOL stuff in MIA. We would just shift it to FLL or NKS to FLL, but I give this a very small chance.

B6 is a great airline, but DAL buying them would come with a few known facts. First, DAL would have to divest slots, thus losing a lot of the price they pay for them, Second after the loss of slots the overall value is lessened. Any premium that B6 has because of their product will be lost when branded DAL, further diluting the value. If they do go ahead with this it will be for real estate access in JFK and because they need the space, not the slots.

I have always suspected that B6 would tie up with AMR/LCC. After selling parts of AMR, B6 could be the final piece of that puzzle.

ALK: ALK is a great airline, but again, they code share with everyone. If they lose say AMR's code share, DAL loses value in the asset he just bought. It brings on competition on the routes and dilutes the RASM, making it a sure money loser. Of course if DAL catches other airlines off guard, they could pull it off. We need their access in SEA and LAX to feed or Pac Ops. As soon as that feed is threatened, we will buy them, and the price will be of little consequence due to the downside economics of the Pac Rim flying.

Suffice to say, there are many forks in the road that make may of these possibilities plausible. As soon as we have a MEMRATed TA, standby for the fireworks.

 

[Griswold]

What RA is out to prove is simple. He wants to prove that his way of running an airline is the correct way in the post CH11 era.

As for who we will marry.

AMR/LCC is far from over and until that is shored up, and no parts are up for grabs by anyone, not much may happen. After that fact, and depending on what DAL buys, and how the HND access issue is resolved you may see a few courses of action.

If we lose out on access in to HND look for a JV with JAL or similar. It that does not work out, look for us to go after HAA.

NKS would be a fallback for flow off the GOL stuff in MIA. We would just shift it to FLL or NKS to FLL, but I give this a very small chance.

B6 is a great airline, but DAL buying them would come with a few known facts. First, DAL would have to divest slots, thus losing a lot of the price they pay for them, Second after the loss of slots the overall value is lessened. Any premium that B6 has because of their product will be lost when branded DAL, further diluting the value. If they do go ahead with this it will be for real estate access in JFK and because they need the space, not the slots.

I have always suspected that B6 would tie up with AMR/LCC. After selling parts of AMR, B6 could be the final piece of that puzzle.

ALK: ALK is a great airline, but again, they code share with everyone. If they lose say AMR's code share, DAL loses value in the asset he just bought. It brings on competition on the routes and dilutes the RASM, making it a sure money loser. Of course if DAL catches other airlines off guard, they could pull it off. We need their access in SEA and LAX to feed or Pac Ops. As soon as that feed is threatened, we will buy them, and the price will be of little consequence due to the downside economics of the Pac Rim flying.

Suffice to say, there are many forks in the road that make may of these possibilities plausible. As soon as we have a MEMRATed TA, standby for the fireworks.

Great post. Couldn't have said it better myself.

 

[crxpilot]

You must work at Allegiant, THE airlines with strong unions have scope to prevent this (operating separately) , Seat limitations (for feeders), codeshare restrictions, etc. Even as "SMARt" as the airline executives think they are, they would have a hard time pulling this off. I'm sure you'd love to be bought by an airline with a real contract and real pay but most will not let you be bought and operate separately, That being said, you could be bought by a non union carrier and operate separately, say a Jet Blue or Virgin America (Not sure how their "Pilot agreements" are written) or by someone such as Republic because apparently they can do what ever they want with their unions multiple contracts.

On a high note, Allegiant has a good niche market and all these mergers will only help reduce capacity and drive airfares up which is good for everyone, especially low fare airlines, if they increase their fares as well!

Later,
KBB

Careful, better have an umbrella over that nose when its raining!

 

[IXLR8]

Alaska is not for sale...nothing to see here ....move along.

Everything is for sale......

 

[igneousy2]

DL could always use AK's cash on hand to pay for part of the acquisition, right? And there was a stock split. If US could finance a buyout of AA, anything could be possible. But, I think they like things the way they are now. My guess would be an airbus operator if anything happens at all. Just a guess!


Godspeed!


The OYSter

Alaska also has 30ish unencumbered 737-800's which would be easy for an acquiring carrier to use as collatoral to finance a purchase.

That being said the current enterprise vaue of Alaska Air Group is about 3.7 Billion which seems like a lot of money for anyone in the airline industry...especially since 3.7 Billion is the number you would generally start negotiations at for a profitable company.

I think Alaska will either end up alone or with Delta. We provide so much feed to Delta and American that I don't think either could afford to let us go to the other....a sort of mutually assured destruction...as a bid by either would surely trigger a bidding war against the other. The loser would end up losing their west coast feed. Better to leave "well-enough" alone.

Since the AA-BK filing though, I have been worried about a couple of scenarios...

1. DL uses AA's current weakness to get AK while AA is busy with much bigger fish.

2. One thing AK would do for AA is "solve" a large chunk of American's MD-80 problem. 120 airplanes with their pilots instantly available for 3B and change? is that good deal? I hope not.