Southwest CEO: AirTran Deal 'Imperative' To Counter Fuel Spike

[texman]

Here is a link to Airtran SEC filings:

http://investor.airtran.com/phoenix.zhtml?c=64267&p=irol-secSplash

On 2/9/2011, Airtran filed a DEFM14A (Filing Group Merger & Aquisitions).

Looking at the Termination of Merger Agreement section (located on page 85-86) and in Appendix A, Article III, Section 3.1 (located on page A-9), it appears that Southwest can back out of the merger if the AAI shareholders vote no, DOJ says no, AAI Board of Directors doesn't live up to their part of the deal, or Fornaro misrepresented Airtran in any way. It seems to say the deal can't fall through due to changes in economic conditions or changes in fuel price levels.

Can you point out the section that says Kelly can pull out of the deal if he doesn't like the deal anymore? You are correct that the breakup fee of $39 million only applies to Airtran.

I don't think he will pull out of the deal. But what if oil goes through the roof? You guy's will have to be team players, we all will. If not some of us will be on the street since SWA owns us all.

 

[kwick]

Staple the domestic Sw pilots below the International Qualified Airtran Pilots!

Thats the only fair way! SW needs this merger with Airtran for it's
International routes.

International flying has always been senior to domestic.

The Arbitrators will give this full consideration.

 

[Skyboy722]

Staple the domestic Sw pilots below the International Qualified Airtran Pilots!

Thats the only fair way! SW needs this merger with Airtran for it's
International routes.

International flying has always been senior to domestic.

The Arbitrators will give this full consideration.

WOW! And here we have it....the solution!:laugh:

 

[maxblast72]

I don't think he will pull out of the deal. But what if oil goes through the roof? You guy's will have to be team players, we all will. If not some of us will be on the street since SWA owns us all.

The Airtran pilot group is familar with being team players. Airtran (and ValuJet) has had to compete with a much larger competitor (Delta) in their main hub since day 1. Airtran has faced alot of tough times just like Southwest did during their first decade or two of existance. Even though Airtran pilots have not always been rewarded by management the same way Southwest pilots might have been, they have continued to do their jobs professionally and produce a quality product.

If oil goes through the roof, the whole airline industry will go through another large change similar to 2008. I believe Gary Kelly which know which airlines will have to retreat first (USAir, Frontier) and be ready to pounce on opportunities. That is why Airtran and Southwest pilots need to be ready to move past the SLI once it is done. Also, I can't wait to see 300+ plus Southwest flights a day in ATL and watch Delta feel a little pain after all the irrational ways Delta has competed with Airtran over the years.

 

[vixin]

Staple the domestic Sw pilots below the International Qualified Airtran Pilots!

Thats the only fair way! SW needs this merger with Airtran for it's
International routes.

International flying has always been senior to domestic.

The Arbitrators will give this full consideration.

Ask any old legacy pilot why they flew Intl. It was because it paid more for working less days. They did it for the money. So, SWA pays more (alot more) for less days. You can figure out the rest.

Lets fence it or keep it in GH forever with your payrates. Then you can have your Intl. Been their done it. To alot more place then little old AAI goes. Gets old real quick.

 

[tankerhead]

Sheesh I think kwick was attempting a funny and there's vixen responding with pure warrior spirit. Put away the bow and arrows and try out that fun luving attitude! You may live a little longer by not over-stressing your servant's heart.

 

[Roomwithaview]

Max

thanks for the link. It appears the first easy caveat to killing the deal would be the inability to achieve the 9/26/11 closing date. Something to consider if ALPA's game plan is to wait swapa out or to go to arbitration.

As much as people here like to say, "It's not like buying a house" to a certain extent it is a transaction, with a time line and a termination if that time line is not achieved. Also, if you say you want to buy something and then it no longer is economically feasible, then you don't buy it. Southwest protected itself pretty good on that front as there is no clause in there for us to pay if GK backs out of the deal. You can't put a gun to someone's head and make them buy something if they don't want it and if it becomes a bad deal economically he will not buy it.

Bob and the AAI BOD can sue Gary if he backs out but then they will have to go to war with SWA's legal department.

 

[Ky.BrownBourbn]

I guess it is a merger of equals. Both need each other equally. You do have to wonder what a difference it makes now that SWA no longer has the advantage with fuel hedging like it did last time fuel spiked?

Give you something else to think about...

Rumor at US Airways last week is that they are buying Hawaiian, if so...Welcome to the party!

I know before you start, they want the big A/C...and your next argument, they have no money...That hasn't stopped anyone before! Rumors probably don't travel real fast from the mainland...You heard it here first!
KBB

 

[Scope out RJ's]

I don't think he will pull out of the deal. But what if oil goes through the roof? You guy's will have to be team players, we all will. If not some of us will be on the street since SWA owns us all.

The good news, with your GED and fondness for trolling the malls and playgrounds, you'll do great as a security guard at the local prison. That is if you don't find yourself on the inside looking out!:blush::laugh:

 

[FIREMAN]

thanks for the link. It appears the first easy caveat to killing the deal would be the inability to achieve the 9/26/11 closing date. Something to consider if ALPA's game plan is to wait swapa out or to go to arbitration.

.

SWAPA, ALPA nor the SLI has anything to do with the DOCC . The DOCC will happen as soon as the DOJ and stock holders have given their approval. After that it is a done deal and that will happen long before the SLI has been worked out. Most likely mid May.

 

[jonjuan]

SWAPA, ALPA nor the SLI has anything to do with the DOCC . The DOCC will happen as soon as the DOJ and stock holders have given their approval. After that it is a done deal and that will happen long before the SLI has been worked out. Most likely mid May.

Finally, a factual post. And no, the aai mec hasn't been attending sli meetings because they haven't happened yet. Rest assured, alpa will have its say before being turned over to the arbie.

 

[Roomwithaview]

Fireman

SWAPA, ALPA nor the SLI has anything to do with the DOCC . The DOCC will happen as soon as the DOJ and stock holders have given their approval. After that it is a done deal and that will happen long before the SLI has been worked out. Most likely mid May.

I guess you haven't read Sideletter 8.

 

[texman]

X

The good news, with your GED and fondness for trolling the malls and playgrounds, you'll do great as a security guard at the local prison. That is if you don't find yourself on the inside looking out!:blush::laugh:

hey it was hard to get 5hay GED.LOL

 

[Dan Roman]

Give you something else to think about...

Rumor at US Airways last week is that they are buying Hawaiian, if so...Welcome to the party!

I know before you start, they want the big A/C...and your next argument, they have no money...That hasn't stopped anyone before! Rumors probably don't travel real fast from the mainland...You heard it here first!
KBB

Your right about us being isolated from rumors, I get mine from Flight Info!
Actually I heard that one and it already got squashed by their CEO pretty soundly in a company Q and A. We hear Delta and Alaska rumors much more often. The most recent one was AK was going to operate us as a separate company. I actually heard the same thing about SWA too.
The reality is Hawaiian Air is the States largest employer (after the Government of course!) and letting it become a part of a mainland company could be problematic politically to say the least. Hawaiian would not be cheap to buy, with a very strong balance sheet and over 300 mil cash on hand. However you are right, with creative financing anyone can buy anyone. Wasn't USAir trying to buy Delta? The other reality is Hawaiian is very successful being Hawaiian Airlines to Hawaii. Our Asia routes are proving to be doing even better than anticipated and we have no problem filling up widebodies to the mainland. People like to start their vacations to Hawaii on Hawaiian Air. Were you to paint Alaska, USAir, Delta etc on the airplanes and lose our local feel they would be spending a lot of money just to have a few more routes that they can fly anyway. Also, they would lose the competitive advantage Hawaiian has being "Hawaiian".

All that said the only thing we know for sure is everything will change in this business. It really boils down to money talks. There was a time when Piedmont had as good employee relations as SWA does now. Piedmont and USAir were two of the financially strongest in the industry when they merged. We all work in the screwiest industry around. I heard even PanAm is having financial troubles (we are a little isolated out here).

 

[FIREMAN]

I guess you haven't read Sideletter 8.

From Sidelatter 8. SWAP or ALPA with their Panties in a wad will not stop it

Under the Merger Agreement, effective on the Merger Closing Date, Southwest, through a series of simultaneous transactions, would acquire all of the stock of AirTran Holdings, conditioned on approval of the shareholders of AirTran Holdings, receipt of regulatory clearance, and customary closing conditions.