swa buying f9

[FO 4 Life]

First, ATA didn't cease operations until 3+ years after SWA propped them up. For Frontier guys/gals I hope it will be different but I think SWA just wants the gates and some routes. They could just buy assets out of the bankruptcy.

Or, give money for Frontier to continue operations on city pairs not flown by SWA. As SWA expands, F9 routes decrease. ATA code shared to Hawaii, LGA and a few other places that SWA did not operate. Today, SWA operates to most of the cities ATA did (LGA, SFO, etc) except Hawaii.

 

[sshrae]

First, ATA didn't cease operations until 3+ years after SWA propped them up. For Frontier guys/gals I hope it will be different but I think SWA just wants the gates and some routes. They could just buy assets out of the bankruptcy.

I agree, the assets alone would yield more than they are offering to buy them for. 118 million is pretty cheap in my opinion. Those gates in DEN are not cheap.

 

[Minimaniac]

I am surprised that SWA offered just 5 million more. I would have imagined the offer would have been sweetened to level that RAH could not counter offer. But, I guess this is just an auction, and 5 million seems to be the incremental bid increase. Look for 118 from RAH shortly, followed by 123 from SWA, etc.

I don't know how much actual interest SWA has in F9, but it certainly benefits SWA to drain the resources of RAH, and raising the cost of F9 through auction is an easy way to do it.

 

[Indy319FA]

Funning thing is, if SWA is successful they have to cut Bedford a check for the financing Republic provided Frontier.

Typical Bedford. If he wins, he wins. If he loses, he still wins.

 

[sshrae]

Funning thing is, if SWA is successful they have to cut Bedford a check for the financing Republic provided Frontier.

Typical Bedford. If he wins, he wins. If he loses, he still wins.

He is going to need the money to stay afloat after his plan falls apart. That money is not going to last too long.

 

[Indy319FA]

He is going to need the money to stay afloat after his plan falls apart. That money is not going to last too long

Never said it was going to work. The jury is still out on that. As it stands he has bought a brand known for outstanding customer service (Midwest) and is trying to buy another (Frontier). Whether it continues its reputation for service with all flights operated by Republic is an open question.

It will be interesting to see what the company does. I'm hoping you will see some of the Midwest middle management, inflight training, and flight training departments taking over at Republic. This is the only chance for this to work, IMO. Republic has a management group that is good at running a fee for departure operation designed to operate as cheaply as possible to underbid other regional airlines. That is a far cry from running a company designed to recruit and retain customers necessary to build a brand. It is particularly critical for the inflight department, as Midwest's service reputation was largely built on the success of their inflight product. This will also require investments in training and people that Republic has not made so far because of their emphasis on getting everything as cheaply as possible.

The next year will be interesting to see how this all shakes out. I will say that if major changes in Republic Management and operations are not made, it is unlikely this venture will be successful in the long term.

 

[BUDDHA145]

He is going to need the money to stay afloat after his plan falls apart. That money is not going to last too long.

If it doent happend, he will have plenty of it!!! thats what Indy319FA was traying to explain!! any way good luck to all involved if it is SW+F9 or RAH+F9, lets hope it doesnt go USAirways stile or a wipsaw!!!

ill be in the regionals like...let see....ah for ever!!!!

 

[sshrae]

If it doent happend, he will have plenty of it!!! thats what Indy319FA was traying to explain!! any way good luck to all involved if it is SW+F9 or RAH+F9, lets hope it doesnt go USAirways stile or a wipsaw!!!

ill be in the regionals like...let see....ah for ever!!!!

I got the point!!!!! What I'm am trying to explain is that money might seem like a lot right now but in reality it aint sh!t. If this falls through the midwest thing is a bust as well, he needed both of these carriers to carry out his mega plan, that will be caput. That is all I am saying. How long do you think that money will last? My guess is not long.

 

[starchkr]

I am surprised that SWA offered just 5 million more. I would have imagined the offer would have been sweetened to level that RAH could not counter offer. But, I guess this is just an auction, and 5 million seems to be the incremental bid increase. Look for 118 from RAH shortly, followed by 123 from SWA, etc.

I don't know how much actual interest SWA has in F9, but it certainly benefits SWA to drain the resources of RAH, and raising the cost of F9 through auction is an easy way to do it.

Right now everyone who enters the "auction" only has to bid the same amount SWA did. That amount is the dollar amount RAH offered plus a "payoff" to RAH should the other carrier win. All the payoff fees owed to RAH total right at about that 5 million difference...it's a benefit they have as being the first to come forward with a reorganization plan. The actual auction phase will not happen until August 11th at which time the bids will then go up typical live auction style...which can go up by as little at a time as the bidders wish.

Plus, any carrier that purchases us besides RAH will incur that $40 million payoff as well. So if anyone but RAH wins they owe RAH ~$45 million. Nice payoff to Bedford if he was to lose.

As far as SWA having interest in us. The Dallas Morning News states SWA as saying they are "in this to win it." Now they could be bluffing of course, but i would bet they will probably take the high bid in the auction since they have the most cash to spend to eliminate a fierce competitor in DEN.

 

[texman]

Right now everyone who enters the "auction" only has to bid the same amount SWA did. That amount is the dollar amount RAH offered plus a "payoff" to RAH should the other carrier win. All the payoff fees owed to RAH total right at about that 5 million difference...it's a benefit they have as being the first to come forward with a reorganization plan. The actual auction phase will not happen until August 11th at which time the bids will then go up typical live auction style...which can go up by as little at a time as the bidders wish.

Plus, any carrier that purchases us besides RAH will incur that $40 million payoff as well. So if anyone but RAH wins they owe RAH ~$45 million. Nice payoff to Bedford if he was to lose.

As far as SWA having interest in us. The Dallas Morning News states SWA as saying they are "in this to win it." Now they could be bluffing of course, but i would bet they will probably take the high bid in the auction since they have the most cash to spend to eliminate a fierce competitor in DEN.

Hey starchkr what do all the F9 guys and girls think about a staple with pay protection? Would that be fair or a straight DOH seniority? Because If it was DOH then you guy's would jump at least 2500 overall numbers I think. Just trying to get a vibe.