Southwest's new plan to screw Airtran pilots

[humveedriver]

Just a question? I thought AT had 2 plus billion in debt that we are paying off? What kind of Debt was it?

Dunno. SWA bought AT for 670 million cash and assumed 2 billion dollars in debt. The result was an advertised sale of 1.4 billion dollars. I'm not a tax attorney, but I'm guessing there are addition benefits like tax write offs that go with that assumption of debt and other merger related items. Then you throw in the pricing power and market control SWA gets and viola, deal looks good on paper.

 

[SWA/FO]

2 billion dollars in debt

are we talking AT debt or the loss of our fuel hedges??

 

[humveedriver]

are we talking AT debt or the loss of our fuel hedges??

Maybe that information can be found at Edgar online. I just looked at this article.

http://www.huffingtonpost.com/mobileweb/2010/09/27/southwest-airlines-airtran_n_739975.html

I enjoyed the part where it said SWA would drop AT's baggage fees in 2012 :-O

 

[texman]

are we talking AT debt or the loss of our fuel hedges??

Yes 2 bil for debt. The hedges, I think are paid off first quarter in 2013 we actually got AT pretty cheap. The 717 deal with Boeing cost wise is a wash. Even though we are paying to convert them to DL the cost savings we are getting from Boeing is tremendous. I think we will be pretty close to 15 % roic next year.

 

[SWA/FO]

In welcome news for weary travelers, Southwest said it will drop AirTran's bag fees when the pair combine in 2012. Right now, AirTran charges $20 for the first checked bag, $25 for the second.

Funny, we "love" the bag fees I but we just can't lower ourselves to that level. I mean who needs the extra billion or 2 anyway. We just recently raised the tranny bag fee from $20.00 a bag to $25.00 I guess we need the extra cash to pay them?

 

[carl p]

Why cant we (SWA) start charging for a second bag? Save face by keeping the first bag free, collect revenue on the second...a win/win and a way to move toward the eventual charging for all checked bags if they choose.

 

[jonjuan]

Why cant we (SWA) start charging for a second bag? Save face by keeping the first bag free, collect revenue on the second...a win/win and a way to move toward the eventual charging for all checked bags if they choose.

The problem with charging for bags is lost market share. It's all about the unintended consequences.

 

[climbhappy]

i dont think there is any data to support a claim like that. sometimes a policy has to be tried and then it can be rescinded...if the goal is to grow revenue then a second bag fee and overweight bag fees are sure to do it...spirit customers certainly dont leave spirit because of their ancillary fees...

 

[SWA/FO]

Why cant we (SWA) start charging for a second bag? Save face by keeping the first bag free, collect revenue on the second...a win/win and a way to move toward the eventual charging for all checked bags if they choose.

Thats where it will start. We should do it. The public has accepted this practice.

 

[LeeRoyJenkins]

The problem with charging for bags is lost market share. It's all about the unintended consequences.

Can you prove to me where SWA has gained market share by not charging for bags?

No you can't, and the financial analysts that cover the airline industry can't seem to see it either. That's why they keep asking Gary to prove his claims of increased market share.