Perspectives on an AirTran and SWA merger

[Ty Webb]

You guys are arguing over something that isn't happening .. . nothing but a bunch of mental masturbation :laugh:

 

[beagle pilot]

I bet against it ever happening unless Airtran switched to an all 737 fleet first and even then it'd be unlikely.

 

[Bake]

I just got off the phone with "the" CEO a few minutes ago. There is no SWA/Airtran merger in the works now or in the next ten years at least, he said.. Airtran, will not be bought or sold until Delta folds Atlanta. I equated that with hell freezing over, but weirder things have been know to happen. After all pigs can fly.

 

[dicko]

LOL! Thanks! I'm guessing you are new and at the bottom of the list. Man, I can't wait to go back to LBB and ELP! Have fun raising the gear for me tough guy!

Actually, 'comet boy' is not an airline pilot (by his own admission).

 

[chase]

To the AirTran pilots who replied,

Thanks for your perspective. In a perfect world, keeping our own brands is preferred for both airlines. I don't know if it would be a good fit or not for the two to merge, some of the points are well stated as to why a merger should not from the perspective of AirTran....some of those same reasons would apply from a SWA pilot's perspective also.

Some could argue, with some degree of justification, that AirTran has the greater "growth" potential simply based upon size as compared to SWA. From the perspective from someone who is very junior, any merger with an airline with older average pilots, that upward mobility could be stifled.

Age 60 will only increase retirements at SWA by 120-150 for the nearterm once 2013 rolls around so without growth at SWA, longer upgrades will be the norm. However, the ability to connect many of the 68 (soon to be 69 with Panama City) cities to ATL in which AT doesn't have city pairings on, an argument could be made that a new growth spurt could occur thereby making way for more growth opportunities.

SWAPA has been told we are overmanned, the precise numbers float between 200-350 depending on the time of the year....growth would solve that obviously, whether that comes from new city pairings or frequencies. In the last year, SWA's market share of domestic capacity has grown by nearly 12.98% to 13.85%, AT's has increased only slightly 3.33% to 3.4% but the important thing it has increased...the other major carriers have all seen a decrease so clearly the LCC like AT and SWA have synergies in terms of showing increased market share as significant.

GK has stated that each 1% of passenger revenue miles increases SWA's bottom line by $800m. SWA is still working off the hedge fiasco of last year and the previous year. AT's current CASM is lower than SWA's....some efficiencies would be gained from combining but again at what costs to the morale and expectations. Would Wall Street see a combining of two successful LCC as a plus or minus; capacity coming out of the marketplace isn't the intended goal longterm as any short-term capacity cuts could result in furloughs...no one wants that. Lots of interesting variables at play.

As some have said, it isn't always about $$$ and despite an increase from $153 to $204 for a 12 yr CA and an increase from $74 to $144 for a 12 yr FO, I can fully understand why some at AirTran would still choose keeping the status quo, known expectations vs. unknown (even though in this business some would argue there are only unknown vs. known expectations) and not supporting a merger. Change is difficult and mergers are full of changes to those involved.

The divergence of the topic to speaking about F9 and SWA is unfortunate as it doesn't pertain to the title of the topic but most understand what the purpose of the thread is all about. As someone earlier said, that is all history and how SWAPA and SWA would deal with AT and their employees would be very different I believe....two very different circumstances.

Thanks to those who have replied on theme, it makes for interesting reading and while I realize it is a small sample, it has helped me understand a little better what some of the concerns from the AT standpoint are.....if others from AT wish to continue the "education", please feel free to do so.

 

[DonVerita]

You are correct. Nobody there wants your group or any other group. They want to grow on their own. You need them not the other way around. You need to accept the fact that you are a large regional with 1500 pilots. You will do very well with Republic. Get use to it.

And how many pilots do you have furloughed at that Fractional you work at...NetJets, Rajflyboy? 500 is it?

Go look at what the DOT definition of a Major is; then you can accept the fact that you'll never be part of one.

Next time try to at least get the pilot count right in your clueless posts. With the new hire classes, the total count is more like 1700.

 

[General Lee]

I honestly think this is hillarious. If it were up to me, I would allow SWA into ATL via Airtran JUST TO SEE AIRTRAN PILOTS INTERMINGLE ON THE SWA PILOT SENIORITY LIST. That would make SWA pilots BOIL. They would go crazy. They think everyone who would love to be a part of that airline SHOULD BE STAPLED. Gary Kelly made them think that it would be UP TO THEM, thinking he would need SWA pilot input. That is not how it works in the M&A business normally. (unless you have something in your contract, like CAL pilots do) It is NICE to allow input from employees, but normally that doesn't happen. The SWA pilots don't think the Airtran guys are good enough, and all they want are the planes and gates. Thanks to the Bond ammendment (?), no more stapling. You can do it if everyone agrees, but the Airtran pilots won't do that. The Frontier guys almost did, but their airline at the time was in BK and not doing well at all. Airtran is doing ok, and the pilots there would want a fair shake at a SLI. That just CAN'T BE according to SWA pilots IMO. It sure would be fun to watch, especially since my friend Ty Webb would be the new ATL Chief Pilot for SWA if it happened. Only bad thing for Airtran guys---they might have to fly to West Texas, and even, gasp, LBB. Have fun guys! Love ya.


Bye Bye---General Lee

 

[dicko]

To the AirTran pilots who replied,

Thanks for your perspective. In a perfect world, keeping our own brands is preferred for both airlines. I don't know if it would be a good fit or not for the two to merge, some of the points are well stated as to why a merger should not from the perspective of AirTran....some of those same reasons would apply from a SWA pilot's perspective also.

Some could argue, with some degree of justification, that AirTran has the greater "growth" potential simply based upon size as compared to SWA. From the perspective from someone who is very junior, any merger with an airline with older average pilots, that upward mobility could be stifled.

Age 60 will only increase retirements at SWA by 120-150 for the nearterm once 2013 rolls around so without growth at SWA, longer upgrades will be the norm. However, the ability to connect many of the 68 (soon to be 69 with Panama City) cities to ATL in which AT doesn't have city pairings on, an argument could be made that a new growth spurt could occur thereby making way for more growth opportunities.

SWAPA has been told we are overmanned, the precise numbers float between 200-350 depending on the time of the year....growth would solve that obviously, whether that comes from new city pairings or frequencies. In the last year, SWA's market share of domestic capacity has grown by nearly 12.98% to 13.85%, AT's has increased only slightly 3.33% to 3.4% but the important thing it has increased...the other major carriers have all seen a decrease so clearly the LCC like AT and SWA have synergies in terms of showing increased market share as significant.

GK has stated that each 1% of passenger revenue miles increases SWA's bottom line by $800m. SWA is still working off the hedge fiasco of last year and the previous year. AT's current CASM is lower than SWA's....some efficiencies would be gained from combining but again at what costs to the morale and expectations. Would Wall Street see a combining of two successful LCC as a plus or minus; capacity coming out of the marketplace isn't the intended goal longterm as any short-term capacity cuts could result in furloughs...no one wants that. Lots of interesting variables at play.

As some have said, it isn't always about $$$ and despite an increase from $153 to $204 for a 12 yr CA and an increase from $74 to $144 for a 12 yr FO, I can fully understand why some at AirTran would still choose keeping the status quo, known expectations vs. unknown (even though in this business some would argue there are only unknown vs. known expectations) and not supporting a merger. Change is difficult and mergers are full of changes to those involved.

The divergence of the topic to speaking about F9 and SWA is unfortunate as it doesn't pertain to the title of the topic but most understand what the purpose of the thread is all about. As someone earlier said, that is all history and how SWAPA and SWA would deal with AT and their employees would be very different I believe....two very different circumstances.

Thanks to those who have replied on theme, it makes for interesting reading and while I realize it is a small sample, it has helped me understand a little better what some of the concerns from the AT standpoint are.....if others from AT wish to continue the "education", please feel free to do so.

Hey Man,

I hope you don't think that even 2 % of the replies on this thread actually represent the attitude of AirTran pilots.

I don't want to single anyone out but ... 'Karma police' was probably told to pound sand by a SWA interview board. If he understood the meaning of 'Karma' he'd be curled up in a corner with a tin foil hat on.

I'm surprised PCL hasn't shown up yet. He despises SWAPA for purely ALPA reasons. Unfortunately he has some pull. Fortunately he is probably busy smearing rogaine on his upper lip to accelerate the beginning of his bushy 'Prater-stache'

It will never happen. Fonaro is an ex US Air idiot. He brought his buddies with him. However; if it does ever happen you'd be better of firing every mouth breather except the pilots and mechanics and allow a fair intergration of two great employee groups.

 

[ATLplt]

Chase...very well written post. You seem very level headed and in touch with what's going on. The payrates you list are in fact current (except for the fact that a 12 yr FO tops out at a whopping $79 an hour). Those rates though will soon be replaced with a more "modern" scale unless a complete break down at the negotiating table occurs. Top Capt rates will rise to the $180-190 range and the FO scale will likely top $115-120+. If not, I believe you'll see 140+ aircraft parked indefinitely around our system. A $10-30 an hour raise with your company is not worth losing a faster upgrade, my relative seniority, or my beloved 717. My opinion...take it with a grain of salt.

I do, however, feel that both groups truly respect one another and would work together to achieve common ground should an unlikely merger take place.

 

[dicko]

Chase...very well written post. You seem very level headed and in touch with what's going on. The payrates you list are in fact current (except for the fact that a 12 yr FO tops out at a whopping $79 an hour). Those rates though will soon be replaced with a more "modern" scale unless a complete break down at the negotiating table occurs. Top Capt rates will rise to the $180-190 range and the FO scale will likely top $115-120+. If not, I believe you'll see 140+ aircraft parked indefinitely around our system. A $10-30 an hour raise with your company is not worth losing a faster upgrade, my relative seniority, or my beloved 717. My opinion...take it with a grain of salt.

I do, however, feel that both groups truly respect one another and would work together to achieve common ground should an unlikely merger take place.

Reality at last.

 

[UALX727]

Chase,

Here are some reasons I can think of that an Airtran/SWA link-up may happen in the future:

1. Out of the 20 top O/D markets in the U.S., Southwest is in 19 of them. The one city that they lack in that group is Atlanta. SWA could get into Atlanta in a BIG way....

2. AirTran is big in BWI with 15%of the market.....Southwest has around 50% of the market in BWI....a SWA/Airtran hook-up would give SWA excellent pricing power with 65% marketshare.
Similiarly, AirTran has a large presence in Florida, particularly in Orlando, where SWA is the major player. Basically, as a rule, the bigger the marketshare an airline has in a city....the more they can charge passengers. Over time, this increased pricing power will pay for the cost of any merger/buyout.

3. AirTran has established 30% marketshare in MKE, with expectations to grow even more in the future. SWA may consider this a threat to the MDW operation, as AirTran attempts to draw leisure pax from the north Chicago suburbs. AirTran billboards are all along the highways in Northern Illinois.

4. Carribean operations now at AirTran which may compliment SWA ops.

5. 54 737-700's currently with many more 737 firm orders in the future at bargain basement pricing. The 717's, who knows...probably phased out over time.

6. SWA will take out a lower CASM, growing competitor. For years SWA had the lowest CASM around, now AirTran's CASM has surpassed SWA's.

That's just a quick summary of the top of my head...who knows. I tend to think that it makes sense...but other guys I fly with are not convinced. In the end we will be the last to know.

As far as seniority integration goes......I believe it will go to arbitration if it ever does go down. I am sure that the AirTran pilots will welcome a more friendly employee culture over there than we currently have now. FWIW......

 

[waveflyer]

And reasons AT pilots would want to be Swa.

1- culture: it's really nice to work for people who care about you and aren't blatantly trying to f^ck you

2- money

3- schedules/ best i've had

4- domiciles- OAK/PHX/LAS/MDW/DAL/HOU/BWI/MCO
it's nice to have coast to coast choices of where to live

----------------

on the Swa side- please tell me what AT offers any Swa pilot similar to above. I can't think of anything- but I don't know anything about the inner workings at AT
-----------------

positive for Swa is OBVIOUSLY Atlanta - which could lead to growth at wn.

------------------

negatives are cultural- most Morris pilots are pretty happy - but I've met some who still have issues- now think outside of the pilot box- will FAs be happy? Will gate agents? Mechanics? The wn culture is a LOT more than just pilots.
------------------

that said- Im a pilot, not a CEO -
IF GK says he's doing the deal- I will work my arse off to make sure every Tran pilot is welcome and part of the family and make sure greed on either side doesn't kill the golden goose.

 

[Cometman]

And how many pilots do you have furloughed at that Fractional you work at...NetJets, Rajflyboy? 500 is it?

Go look at what the DOT definition of a Major is; then you can accept the fact that you'll never be part of one.

Next time try to at least get the pilot count right in your clueless posts. With the new hire classes, the total count is more like 1700.

I never said I work for Netjets or any other fractional. OK, 1700 pilots instead of the 1500 I mentioned. Now you are really big. However, I would let Republic know about the additional 200. Maybe they will consider that when combining the list.

 

[Kharma Police]

Hey Man,

I hope you don't think that even 2 % of the replies on this thread actually represent the attitude of AirTran pilots.

I don't want to single anyone out but ... 'Karma police' was probably told to pound sand by a SWA interview board. If he understood the meaning of 'Karma' he'd be curled up in a corner with a tin foil hat on.

I'm surprised PCL hasn't shown up yet. He despises SWAPA for purely ALPA reasons. Unfortunately he has some pull. Fortunately he is probably busy smearing rogaine on his upper lip to accelerate the beginning of his bushy 'Prater-stache'

It will never happen. Fonaro is an ex US Air idiot. He brought his buddies with him. However; if it does ever happen you'd be better of firing every mouth breather except the pilots and mechanics and allow a fair intergration of two great employee groups.

Glad to see AirTran Management's Useful Idiot is back. Well done Dick, you managed to slide in a jab at ATN ALPA with your post, the only entity that would try and protect you when SWAPA or any other airline tries to steamroller you. Your lack of respect for your fellow employees also shows your character. I know you think everything would be rosy and the grass would be greener if SWA bought us but I'm guessing you would still be miserable.

As for me and my choice of airlines, I'm from Atlanta and I didn't want to commute. That left me with two choices. AirTran interviewed and hired me first.

For the Southwest pilots, I will try and be more civil with my posts and not take the bait from the Southwest posers.

 

[chase]

Chase...very well written post. You seem very level headed and in touch with what's going on. The payrates you list are in fact current (except for the fact that a 12 yr FO tops out at a whopping $79 an hour). Those rates though will soon be replaced with a more "modern" scale unless a complete break down at the negotiating table occurs. Top Capt rates will rise to the $180-190 range and the FO scale will likely top $115-120+. If not, I believe you'll see 140+ aircraft parked indefinitely around our system. A $10-30 an hour raise with your company is not worth losing a faster upgrade, my relative seniority, or my beloved 717. My opinion...take it with a grain of salt.

I do, however, feel that both groups truly respect one another and would work together to achieve common ground should an unlikely merger take place.

Kharma,

No offense taken...post whatever you like in any manner, the readers will make the judgement on the value of it as they do with any poster. Glad you don't have to commute...I currently do and it is not the preferred plan but the lot I have in life but I'm not complaining...life is much better for me than I deserve:beer:

ATLpilot,

Like you, I'm hopeful that a new AAI contract can be worked out and that you get what you ask for in terms of dollars and cents as well as work rule changes. It is often the latter that gets less focus, rigs, per diem, scheduling flexibility, incentives, and then 401K, profitsharing etc. but hopefully those are being addressed to AAI pilot's liking also.

Such an increase in pay for AAI's pilots would take away the incentive that many might have toward supporting a SWA/AAI merger, no doubt.

I think the brand loyalty among your pilots appears to be pretty high and operating independently vs. a merger makes sense to them.

I don't think there is a groundswell of "merger mania" on SWAPA's side...we are just reading the tea leaves that GK is leaving out there, similar to the recent comments from your CEO.

Only time will tell and how negotiations go as well as if there are discussions going on behind the scenes between AAI/SWA...I know of none as said earlier.

Thanks for engaging with your perspective.

Dicko....your words of caution are noted and as an old timer on FI I've learned to weed out the bombastic and mentally challenged replies from those like yours and others who can stay focus on the thread's intent...it is somewhat predictable but also entertaining in a "can't resist the car-crash sneak a peek" kind of way.

I write for the sane poster and more for the lurkers who are looking for insight (like me) and info on the topics they are interested in...I suspect there are more lurkers interested into the thoughts of the two pilot groups for various reasons and would hope to coax some of those who belong to the two groups to post their opinions, that is my intent.

There are also just under 200 SWA poolies that would be impacted by any merger as it would most likely slow their time before being called by SWA for a future right seat but on the other hand it might lead to more rapid growth if connections could be made to ATL and other AAI cities....all unknown entities but another group that is watching and wondering I'm sure.

Me speculating about your pilot group or UAL, CAL, DAL or others in which I'm not a part of is indeed a waste of my time but asking for their opinions or yours about matters that directly impacts the specific group is very worthwhile I believe.....but this is a public forum and one gets all kinds, including my worthless drivel

UALX, (not sure if you are an AAI...maybe from the X part I figured)

You present some strong "bean-counter" facts (the same points have been made by SWA pilots to me about why it makes sense and they are valid points) that make a merger smart from a bottom line standpoint in the eyes of some but the issues that would impact the pilots are merging of culture, seniority integration (expectations), response from ALPA/SWAPA, etc. and those are the issues that I'm more interested in.

There will be some on both sides (if a merger were to go on) that would bury their heads in the sand and kick and scream but if it was to occur, the remaining ones of us would be left to make it as fair an integration, hopefully without arbitrators but understanding current A&M rules and McCaskill-Bond guidelines that would end up with a successful merger and integration.

I think there are enough sane folks at both airlines to discuss the issues...that is my point in starting the thread.

I realize we (those on here) at the bottom of the food chain are not impacting the direction or likelihood of a merger at all but being more educated from both perspectives I think helps the debate and lays out some issues we can ask those who will be impacting those changes if they were to occur.

Thanks again to those who provided meaningful comments.