Southwest Line on Credit?

[humveedriver]

GK confirmed to our transition class recently that there are used -700s out there for the taking and that the -800 is in more demand. So if SWA picked up 88 or so used -700s to replace the 717s,at a cheaper rate than the brand new -800's they defered, I would hardly be surprised. If they can get those planes with cheap borrowed money vs. using their own cash, that would seem reasonsable.

As far as the timing of all that, I would still think it ties in with the deaprture rate of the 717 and amadeus coming online. So maybe we will see some used planes show up later this year, but mostly next year.

 

[PCL_128]

I agree Scoreboard.

Would Gary have them sign a NDA for say an order of 100 777's? Maybe.

For the purchase of another airline? Absolutely.

I guess the technical answer is written deep in SEC rules.

I just can't imagine that Gary would jump into another airline merger when the first one still isn't even half-way complete. I don't think much of his management abilities, but I certainly think he's smarter than that. Besides, what could this mystery airline be? Alaska? No, Delta has dibs on them, and even the notoriously cheap Richard Anderson will pony up big money to keep someone else from grabbing them. JetBlue? Nah, two unrelated fleet types, and if you wait long enough, you can probably get the entire company at fire-sale prices. Hawaiian? I don't see Gary trying to gobble up an airline that is making a good chunk of its profits from far-international flying now.

I'm just not seeing the potential merger.

 

[THEPRFCT10]

The way it was explained to me was that GK will almost be forced to buy someone now that the big three are here. SWA can't compete with their niches. SWA doesn't do international. Jet blue would give GK New York and Boston markets I'm sure he'd love to have but otherwise has no chance of getting. Plus they're all over the Caribbean already. There'd be a fence around the fleet types right? Makes sense to me.

~10

 

[redflyer65]

The way it was explained to me was that GK will almost be forced to buy someone now that the big three are here. SWA can't compete with their niches. SWA doesn't do international. Jet blue would give GK New York and Boston markets I'm sure he'd love to have but otherwise has no chance of getting. Plus they're all over the Caribbean already. There'd be a fence around the fleet types right? Makes sense to me.

~10

Completely agree ~10.

Do any Southwest or Airtran employees want another acquistion? That's probably a huge NO.

But from a business perspective, you need to get in on 'what's left', or just be completely left out to your own devices. This sentiment with the past mergers is here right now. I agree that JetBlue is the most likely candidate. I'd place Hawaiian number two on the list with AK a distant third.


Humvee,

Transistion class? Welcome aboard. You driving to work yet?

 

[Flyby1206]

The way it was explained to me was that GK will almost be forced to buy someone now that the big three are here. SWA can't compete with their niches. SWA doesn't do international. Jet blue would give GK New York and Boston markets I'm sure he'd love to have but otherwise has no chance of getting. Plus they're all over the Caribbean already. There'd be a fence around the fleet types right? Makes sense to me.

~10

This is gonna hurt! Please use lube

Has there been any serious talk of widebody international flying at WN eventually? With your huge domestic network I would imagine it could easily support a nice network of overseas type flying.

 

[Saluki Dawg]

This is gonna hurt! Please use lube

Has there been any serious talk of widebody international flying at WN eventually? With your huge domestic network I would imagine it could easily support a nice network of overseas type flying.

Yes, after a JetBlue Aquisition I could easily see a follow on order for 787-8/-9's and far International out of JFK and possibly BOS, and BWI. I would think that SWA would probably actually operate the Airbusses at least for a while. The E190's however could be toast though. I would guess that any potential deal would probably not be announced until sometime in 2015 after AirTran has been fully absorbed and Amadeus is fully up and running.

 

[FlyinGuy]

Awesome!! So are you saying we would "acquire" JB, dump a bunch of their planes while keeping all their pilots? That is nuts. SWA management would never do something like that!

 

[redflyer65]

Yes, after a JetBlue Aquisition I could easily see a follow on order for 787-8/-9's and far International out of JFK and possibly BOS, and BWI. I would think that SWA would probably actually operate the Airbusses at least for a while. The E190's however could be toast though. I would guess that any potential deal would probably not be announced until sometime in 2015 after AirTran has been fully absorbed and Amadeus is fully up and running.

I think your 2015 timeframe pay be pushed back too far.

Think in terms of announcing a purchase agreement, getting approval, then codesharing the next day.

Remember how long it took with the AAI announcement? Over a year to really get anything started. So with with JetBlue, you could start the process as early as this year. Just a thought.

A follow on widebody would be perfect in the SW/JB scenerio. Everything would pretty much be in place.

 

[HowardBorden]

Think in terms of announcing a purchase agreement, getting approval, then codesharing the next day.

This is what I'm worried about! The code share technical hurdles are mostly gone as the new reservations system spools up. Any new acquisition would go much more smoothly as far as realizing synergies much more quickly because codeshare could happen almost immediately. The kicker is our CBA doesn't allow domestic codeshare without the approval of SWAPA, which would require the whole deal to be revealed to SWAPA and lots of work done regarding offering relief from that clause, hence the NDA. There is a carve out in the CBA that grants some limited codeshare during an acquisition scenario for 18 months I believe, but then all flights need to be flown by SWAPA pilots.

 

[fam62c]

I can't see where SW would have any advantage over competitors doing widebody international flying. Never say never but if that ever happens it's a very long way off. As far as another acquisition is concerned, who knows. They learned some things with AT that could possibly make the next one easier. JB would be a good fit as far as routes are concerned and the fleet/product problem can be solved over time but it would be very tough to integrate quickly. If the SW unions would allow it to be operated as a separate unit behind a fence for a long enough period it could be possible but who knows if they would go along with that.

My bet is that SW doesn't do anything new for many years. I think they will be concentrating on fully absorbing AT, fleet renewal, the upcoming opportunities in Texas and dealing with labor issues created by all their groups being in negotiations at once. SW has seen a lot of change lately and it's probably all they can handle for awhile. SW has always been smaller than the biggest carriers in the industry, nothing has changed that would force them to buy another airline after AT to gain size quickly. My guess is that if you go forward ten years SW will be doing domestic and near international flying with 737's and that will be it. If it's not broken don't fix it.

 

[afhercdriver]

How does the JB pilot contract work? I thought I heard they signed 5 year contracts?? Can they be let go after the contract has expired?

Jim

By the way, I don't believe SWA will buy anyone.

 

[scoreboardII]

SW has always been smaller than the biggest carriers in the industry,

??? Dude, you are so wrong.


Us Domestic enplanements 2012:

AA 55M
US 57M
US air 40M

and the as you put it the "always been a smaller airline":

WN 100M

I'll even be generous and add in international to AA, another 17M, still lags WN by 25%

http://www.transtats.bts.gov/Oneway...m&Data_Type=CAT&Percent_Flag=0&Display_Flag=0

 

[scoreboardII]

By the way, I don't believe SWA will buy anyone.

you are correct, low hanging fruit gone, everything from now on will be a merger.

 

[fam62c]

??? Dude, you are so wrong.


Us Domestic enplanements 2012:

AA 55M
US 57M
US air 40M

and the as you put it the "always been a smaller airline":

WN 100M

I'll even be generous and add in international to AA, another 17M, still lags WN by 25%

http://www.transtats.bts.gov/Oneway...m&Data_Type=CAT&Percent_Flag=0&Display_Flag=0

These other airlines do more than domestic flying, look at total ASM levels. SW has always been a smaller airline than United, Delta and American.

My point is simply that SW doesn't need to be the same or larger than the other carriers just because there has been consolidation. They have never been the biggest carrier and it's never hurt them before. They don't need to do another acquisition to be competitive. Damn, touchy

 

[humveedriver]

Completely agree ~10.

Do any Southwest or Airtran employees want another acquistion? That's probably a huge NO.

But from a business perspective, you need to get in on 'what's left', or just be completely left out to your own devices. This sentiment with the past mergers is here right now. I agree that JetBlue is the most likely candidate. I'd place Hawaiian number two on the list with AK a distant third.


Humvee,

Transistion class? Welcome aboard. You driving to work yet?

Driving to work! And the new DAL terminal is way above what my expectations were. In fact I think I smokes the new int'l terminal in ATL even though they share similar design features.

Yeah, stayin organic would be nice. If you told me we had to merge with JB and that means 787s, western Europe and I would never have to update my resume again, I would be down with it. The AT/SWA deal diluted the seniority list so much that playing the king of the seniority hill game isn't something I can win anymore. So I ain't afraid of what comes down the road. I really don't see it happening soon. I think especially with JB it's more complicated than we think and job preservation may not be attainable like it was for AT.

 

[Flyby1206]

How does the JB pilot contract work? I thought I heard they signed 5 year contracts?? Can they be let go after the contract has expired?

Jim

By the way, I don't believe SWA will buy anyone.

Kinda sorta. At the end of the 5year term the company may discharge for a list of reasons, many are pretty vague like negligence, disobeying instructions, etc. If the person isnt discharged then the agreement auto-renews for another 5 year term.

 

[afhercdriver]

Kinda sorta. At the end of the 5year term the company may discharge for a list of reasons, many are pretty vague like negligence, disobeying instructions, etc. If the person isnt discharged then the agreement auto-renews for another 5 year term.

Thanks for the reply. Now back to lurking
Jim

 

[717capt]

I don't think SW is ready for widebodies, Europe and the like. Not yet. Maybe in 10-15 years. But not now. Not with Gary in charge. They have an agenda and will stick to it. I mean come on. They do proving runs to SJU in October and start service 6 months later? Who does that? You do proving runs and start service the next week. Not half a year later. The biggest thing happening in the next few years, on the international front anyway, will be the opening of the Intl terminal in HOU. That seems to be the game plan for now, but things do change. ATL was supposed to be a "super hub". Hmmm.
As far as other acquisitions go, Don't forget about Frontier. They have a presence in the Caribbean. Granted, not as much as jetblue, but it's there. Maybe, Just maybe, after the AA/US merger was officially announced Gary and co realized that the getting into the near int'l game will be much more difficult. No offense to our friends at DL, but the combined AA/US will own Mexico, the Caribbean and Central America. So yeah.. maybe it is $$$ being raised for an established near int'l presence. Personally I think that the day AA announced bankruptcy, Gary kicked himself in the ass for having spent all that money on AirTran. Should've waited it out and gone after AA. After all Parker did it, and he's a drunk.

 

[redflyer65]

I don't think SW is ready for widebodies, Europe and the like. Not yet. Maybe in 10-15 years. But not now. Not with Gary in charge. They have an agenda and will stick to it. I mean come on. They do proving runs to SJU in October and start service 6 months later? Who does that? You do proving runs and start service the next week. Not half a year later. The biggest thing happening in the next few years, on the international front anyway, will be the opening of the Intl terminal in HOU. That seems to be the game plan for now, but things do change. ATL was supposed to be a "super hub". Hmmm.
As far as other acquisitions go, Don't forget about Frontier. They have a presence in the Caribbean. Granted, not as much as jetblue, but it's there. Maybe, Just maybe, after the AA/US merger was officially announced Gary and co realized that the getting into the near int'l game will be much more difficult. No offense to our friends at DL, but the combined AA/US will own Mexico, the Caribbean and Central America. So yeah.. maybe it is $$$ being raised for an established near int'l presence. Personally I think that the day AA announced bankruptcy, Gary kicked himself in the ass for having spent all that money on AirTran. Should've waited it out and gone after AA. After all Parker did it, and he's a drunk.

Your right. Nobody said widebodies tomorrow, or even 4 years from now so your timeline might be right.

But think of it this way....SW has the best domestic feed in the US...bar none. Add JB with JFK, BOS, and the Carib and 5-10 years down the road add the widebody. Every widebody would be oversold. Guaranteed.

Launch points....BOS, JFK, BWI, ATL, DEN, MCO, HOU, PHX, LAS, LAX. Other possiblities would be MCI, STL, etc, etc.

When a carrier is only domestic, just thing of the possible growth opportuntities going forward.

 

[Flyby1206]

Your right. Nobody said widebodies tomorrow, or even 4 years from now so your timeline might be right.

But think of it this way....SW has the best domestic feed in the US...bar none. Add JB with JFK, BOS, and the Carib and 5-10 years down the road add the widebody. Every widebody would be oversold. Guaranteed.

Launch points....BOS, JFK, BWI, ATL, DEN, MCO, HOU, PHX, LAS, LAX. Other possiblities would be MCI, STL, etc, etc.

When a carrier is only domestic, just thing of the possible growth opportuntities going forward.

+1

The legacy carriers build their networks around international routes, and half-a** the domestic stuff. WN starts with an incredibly strong domestic network that the legacies can never compare to. If WN can get their house in order in terms of IT department then they could be a serious powerhouse globally.