Looks Like DAL Is Staying At DAL

[HowardBorden]

Well, not so much, hence the buyout of FL. It's quite obvious, even to the most obtuse, that they didn't want Atlanta, (it's been cut in half) they didn't want the 717's, they (and SWAPA) damn sure didn't want the pilot group. They bought them to rid themselves of competition.

I think you are viewing the AirTran acquisition from a very simplified lens.

Atlanta was "de-hubbed" just as was stated from the very beginning. A less hub and spoke centric operation was always going to involve less flights from that city.

I agree, they certainly did not want the 717's, but why would they? They had another airline ready to take over the leases and the airframes were replaced 1 for 1 with an aircraft seating 30-60 more revenue passengers at a very similar operating cost. The 717 departure allowed the single fleet type model to continue because it has proven to be very lucrative.

Not one AirTran pilot was furloughed so I disagree that they didn't want the pilot group. In fact they very much needed the pilot group! The fleet numbers varied very little over the transition, so exactly how would have operated a similar fleet size without a similar sized pilot group?

In the end it was more about revenue and profit.

"Synergies from AirTran's acquisition have also played a key role in growing Southwest's profit from $178 million in 2011, to $421 million in 2012, and to $754 million in 2013. In the current year, these synergies, totaling $400 million for the entire year, have helped Southwest's profit rise by 75% per year to $946 million in the first three quarters. All in all, AirTran has accelerated Southwest's expansion in the continental U.S. and also positioned it well for long term growth in the international market."

"But over the past 2-3 years, Southwest has done a commendable job integrating AirTran. Southwest smoothly absorbed AirTran's Atlanta operations, making them similar to the rest of its focus cities, rather than remaining a hub. The carrier also leased out AirTran's 717s to Delta, preserving the cost advantage that comes with operating a single aircraft type."

"And most importantly, three years after the acquisition, Southwest's operating costs are still well below those of other major airlines including JetBlue. So, the pre-merger fears haven't played out. On the contrary, AirTran's acquisition and integration has given Southwest the scale to compete more effectively with larger network carriers such as American, United and Delta in the domestic market."

http://www.forbes.com/sites/greatsp...ran-done-for-southwest-airlines/#2bb41f1c56e2

 

[freightdogfred]

I'm viewing from the lens of the anti-trust regulators viewed it from. They were concerned that the elimination of Airtran's aggressive fares on Southwest routes would lead to higher prices for consumers would materialize. Peruse Diana Moss's statement on page 10. (AirTran is an aggressive discounter relative to Southwest) Make up your own mind on whether or not their fears were correct. Or do a fare search

https://www.gpo.gov/fdsys/pkg/CHRG-112shrg67500/pdf/CHRG-112shrg67500.pdf

Now that was the Milwaukee market, what about Atlanta? You claim there are fewer flights due to "de-Hubbing"(?). According to Southwest, it was due to higher fuel prices. Umm, ok...the Southwest effect

http://www.star-telegram.com/news/business/article3848896.html

I get GK's motives, and it's all about yield. He's a savvy CEO and a glib talker and kudos to him for adding to SWA's bottom line. But for Bubba to state SWA welcomes competition and you to chime in is asinine. No company wants pressure on yield.

 

[HowardBorden]

You claim there are fewer flights due to "de-Hubbing"(?). According to Southwest, it was due to higher fuel prices. Umm, ok...the Southwest effect

http://www.star-telegram.com/news/business/article3848896.html

Actually, Kelly stated higher prices were due to high fuel costs not fewer flights according to the article you cited:

"Kelly has blamed a steep rise in fuel costs for Southwest?s higher fares. Southwest said its fuel cost per gallon, including taxes, increased 28 percent between the third quarter of 2010, when it announced the AirTran deal, and the fourth quarter of 2013. Other airlines have also seen higher fuel costs in recent years and raised fares."

 

[HowardBorden]

But for Bubba to state SWA welcomes competition and you to chime in is asinine. No company wants pressure on yield.

I said nothing about Bubba's assertions, I was providing a counterpoint to your argument that, "They bought them to rid themselves of competition." For the reasons I stated I stand by my assertion that you posses an extremely myopic view of the acquisition.

 

[freightdogfred]

I said nothing about Bubba's assertions, I was providing a counterpoint to your argument that, "They bought them to rid themselves of competition." For the reasons I stated I stand by my assertion that you posses an extremely myopic view of the acquisition.

You're right! They bought FL because pilots, and FA's are in such short supply.
Atlanta's not building anymore gates they needed those too. (Although why they gave up all those gates on D concourse remains a mystery) Thank god Delta took those money-losing 717s, complete with new paint, interiors, new galleys. Eliminating a competitor, or competition, had nothing to do with it.

You wouldn't be in the market for a bridge, would you?

 

[SWA Bubba]

Well, not so much, hence the buyout of FL. It's quite obvious, even to the most obtuse, that they didn't want Atlanta, (it's been cut in half) they didn't want the 717's, they (and SWAPA) damn sure didn't want the pilot group. They bought them to rid themselves of competition.

Well, Howard beat me to it as far as the reasons for downsizing Atlanta (changing AirTran's hub-and-spoke system changed to our point-to-point), but overall, I'm gonna have to give you about a D+ on your shotgun response, throwing upeverything you could think of, hoping something stuck.

1. Southwest most certainly DID want Atlanta, since we talked about getting into Atlanta before the acquisition (it was the largest US metropolitan area that we didn't serve). I'm not sure how that wasn't obvious to "even the most obtuse." Buying AirTran was the fastest and easiest way to do so. And now that it's finished being dehubbed, it's slowly expanding again.

2. Southwest didn't want the 717s, but as Howard said, so what? They saved money subleasing them and replacing them with 737s.

3. What has SWAPA "not wanting" the AirTran pilots got to do with the company's strategic plans? Red herring. The company could give a crap where the pilots come from, as long as there's the proper number. And of course, any pilot union would rather hire guys new off the street, than try to intergrate an existing group.

4. You forgot all about international. That was a big part of the reason as well.

But for Bubba to state SWA welcomes competition and you to chime in is asinine. No company wants pressure on yield.

As far as eliminating competition goes, get it right. I never said that SWA "welcomes competition," I said that we don't have a problem with it. If the Love Field law was changed, and more gates were built for other airlines, then as long as we got all the gates we paid for, you wouldn't hear crap in protest from Southwest. Unlike other airlines. They'd do their thing, and we'd continue to do ours.

And there's a world of difference between buying a smaller airline for multiple objectives (and from an owner who was just dying to sell it to us, for that matter), and mounting a sustained, meritless legal attack, followed by all other kinds of obstructionism, legal or otherwise, just to keep from having to compete in the first place.

Was competition any part at all of the reason for the acquisition? I'm sure it was. A small part of a multifaceted reason. Hell, we didn't compete with AirTran head-to-head on that many city-pairs to begin with. But for you to ignore everything else, and pretend that's the main or only reason, for your own bitter personal reasons, .... well, in your own words, that's just "asinine."

Hey, good to hear from you again, Fred.

Bubba

 

[maru657]

You've got to watch bubba and Howie, there probably paid mouthpieces for southwest. Notice they always have an excuse.

 

[SWA Bubba]

You've got to watch bubba and Howie, there probably paid mouthpieces for southwest. Notice they always have an excuse.

Is that as opposed to you, a guy who never has an "excuse" for the stupid things that continually come out of his mouth? The guy who has failed to back up literally a single one of the laughable claims that he's made? Who, when called out on his stupidity, always falls back on one of three possible answers: ignore, change the subject, or just pretend you said something else. That guy?

By the way, you meant "they're," a contraction of "they are," rather than "there." Also, for your information, the only thing Southwest pays me for is to fly airplanes. I have to make fun of you on my own time.

It's my pleasure, actually. :blush:

Bubba

 

[freightdogfred]

Well, Howard beat me to it as far as the reasons for downsizing Atlanta (changing AirTran's hub-and-spoke system changed to our point-to-point), but overall, I'm gonna have to give you about a D+ on your shotgun response, throwing upeverything you could think of, hoping something stuck.

1. Southwest most certainly DID want Atlanta, since we talked about getting into Atlanta before the acquisition (it was the largest US metropolitan area that we didn't serve). I'm not sure how that wasn't obvious to "even the most obtuse." Buying AirTran was the fastest and easiest way to do so. And now that it's finished being dehubbed, it's slowly expanding again.

2. Southwest didn't want the 717s, but as Howard said, so what? They saved money subleasing them and replacing them with 737s.

3. What has SWAPA "not wanting" the AirTran pilots got to do with the company's strategic plans? Red herring. The company could give a crap where the pilots come from, as long as there's the proper number. And of course, any pilot union would rather hire guys new off the street, than try to intergrate an existing group.

4. You forgot all about international. That was a big part of the reason as well.



As far as eliminating competition goes, get it right. I never said that SWA "welcomes competition," I said that we don't have a problem with it. If the Love Field law was changed, and more gates were built for other airlines, then as long as we got all the gates we paid for, you wouldn't hear crap in protest from Southwest. Unlike other airlines. They'd do their thing, and we'd continue to do ours.

And there's a world of difference between buying a smaller airline for multiple objectives (and from an owner who was just dying to sell it to us, for that matter), and mounting a sustained, meritless legal attack, followed by all other kinds of obstructionism, legal or otherwise, just to keep from having to compete in the first place.

Was competition any part at all of the reason for the acquisition? I'm sure it was. A small part of a multifaceted reason. Hell, we didn't compete with AirTran head-to-head on that many city-pairs to begin with. But for you to ignore everything else, and pretend that's the main or only reason, for your own bitter personal reasons, .... well, in your own words, that's just "asinine."

Hey, good to hear from you again, Fred.

Bubba

http://www.cbsnews.com/news/southwest-acquires-airtran-six-reasons-this-is-a-great-move/

Well, more than 1 outsider seems to disagree, but you're the expert lol. But as Maru said, it's pointless to argue with you. I'd say we agree that one of reasons was to kill off competition, we just disagree on how far up the list that was. As far as being bitter, I've told you before, I'm not I learned long ago not to stress over things you can't change. For some reason you consider a differing opinion as an attack, when it's just that-a differing opinion. Don't be so defensive, every coin has 2 sides

 

[maru657]

Is that as opposed to you, a guy who never has an "excuse" for the stupid things that continually come out of his mouth? The guy who has failed to back up literally a single one of the laughable claims that he's made? Who, when called out on his stupidity, always falls back on one of three possible answers: ignore, change the subject, or just pretend you said something else. That guy?

By the way, you meant "they're," a contraction of "they are," rather than "there." Also, for your information, the only thing Southwest pays me for is to fly airplanes. I have to make fun of you on my own time.

It's my pleasure, actually. :blush:

Bubba

Why Bubba, go verb your adverb verb! While you were learning to spell the rest of us were learning to fly.

 

[SWA Bubba]

http://www.cbsnews.com/news/southwest-acquires-airtran-six-reasons-this-is-a-great-move/

Well, more than 1 outsider seems to disagree, but you're the expert lol. But as Maru said, it's pointless to argue with you. I'd say we agree that one of reasons was to kill off competition, we just disagree on how far up the list that was. As far as being bitter, I've told you before, I'm not I learned long ago not to stress over things you can't change. For some reason you consider a differing opinion as an attack, when it's just that-a differing opinion. Don't be so defensive, every coin has 2 sides

Well, then maybe you shouldn't argue with me!

Actually, Fred, I welcome a good argument, and as you say, matters of opinion are just that. In this particular case, I was making a point that elimination of competition wasn't the only or even primary motivation. And as far as an "attack," I was just repeating back the phrasing that you used yourself.

And I would hope that you know better than to put any credence in anything Maru says. He has never, to the best of my knowledge, argued anything. All he's ever done is spout ridiculous, obviously-false stuff, and then ran away when pressed to justify or even explain anything he's said. At least you post facts about things that actually happened, and links to articles that support your point of view. Then one may argue merits.

Maru is incapable of any such thing. He's a moronic clown with the intellect and speaking/writing ability of a third grader. Go back and read some of his posts, and see if you don't agree.

Bubba

 

[SWA Bubba]

Why Bubba, go verb your adverb verb! While you were learning to spell the rest of us were learning to fly.

Well Maru, if you actually know how to fly an airplane, why don't you stick with that? You clearly aren't capable making an actual argument. Hell, most times, you aren't even capable of expressing a coherent thought....or writing a sentence longer than six words without misspelling or misusing several of them.

Bubba

 

[freightdogfred]

Well, then maybe you shouldn't argue with me!

Actually, Fred, I welcome a good argument, and as you say, matters of opinion are just that. In this particular case, I was making a point that elimination of competition wasn't the only or even primary motivation.
Bubba

That's where we disagree I guess. Case in point, was the attempted takeover of Frontier. To what end? To get the Airbus fleet? nein
To get the Denver gates? negativo
To get a list of names on the seniority lists? nyet (I guess that iswhat killed the deal?)

No, it was to kill off a competitor in Denver, and increase yield, cheaply I might add. Frontier was struggling. A similar situation in Atlanta, but Airtran was much stronger, ergo SWA had to pony up more cheese. Fornaro, blindsided by zero hedging and ********************ting in his pants when fuel spiked willing sold out ASAP and the rest is history. I'm not sure how these bean counters divvy up "synergy realized" in GAAP but I'm sure increased yield has a lot to do with it. But what the hell do I know I sit in an airplane for a living, and not even in the Captain's seat so I post my thoughts with a disclaimer


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[SWA Bubba]

That's where we disagree I guess. Case in point, was the attempted takeover of Frontier. To what end? To get the Airbus fleet? nein
To get the Denver gates? negativo
To get a list of names on the seniority lists? nyet (I guess that iswhat killed the deal?)

No, it was to kill off a competitor in Denver, and increase yield, cheaply I might add. Frontier was struggling. A similar situation in Atlanta, but Airtran was much stronger, ergo SWA had to pony up more cheese. Fornaro, blindsided by zero hedging and ********************ting in his pants when fuel spiked willing sold out ASAP and the rest is history. I'm not sure how these bean counters divvy up "synergy realized" in GAAP but I'm sure increased yield has a lot to do with it. But what the hell do I know I sit in an airplane for a living, and not even in the Captain's seat so I post my thoughts with a disclaimer

Actually, I think the Frontier deal was even less of a "competition-eliminator" than the AirTran deal, but I guess we'll never know for sure. Clearly, the company didn't want Frontier all that badly; they were willing to place a contingency on SWAPA concurrence, and then their final bid was only about $100M (which is reportedly about we paid just for two gates at DAL). That's chump change in this industry.

The stated reason was for Frontier's routes from DEN, and the rumor was just to look at their books, but I don't think they were thought of as much in the way of competition in any case. Clearly, growth was intended, as every employee was to be retained, and every Airbus was to be replaced by B737s. In that case, it was intended to be similar to AirTran, as in instant growth (company and market), but particularly, it would be growth at a very inexpensive cost.

But you're right; a lot of this is clearly opinion, and how one looks at and interprets the facts. Obviously, we look at them differently. You see both of these cases as solely competition-elimination, and have stated as much. In the AirTran case, you overlooked or actually dismissed outright every other possible motivation (entering Atlanta, gaining new routes, gaining international abilities, etc.) just to highlight your single declared motivation. Bitter or not, you are looking at things through a particularly-colored set of glasses (obviously not rose ), and I think that skews your perspective.

Bubba

 

[maru657]

Well Bubba, I hear Virgin is considering a merger with Jet Blue and Frontier with Sprit. I think that might crimp Southwest's growth. Should be entertaining.