SWA SEC 8-K 19Sep07 . . . thoughts?

[Skank]

You use it to buy back shares, hence returning cash to the shareholders, which is what corporations are supposed to do.

What about manufacturing a product or providing a service? Does that come in to play somewhere?

 

[AlbieF15]

What about manufacturing a product or providing a service? Does that come in to play somewhere?

Tsk Tsk. She's a witch! Heretic! Burn her!

 

[STL717]

Like I said earler, dirtying up the balance sheet.

I like the move. Gary Kelly is in this for the long run, not propping us up to drain the cash and run.

Gup

Buying an airline would dirty up the balance sheet.

 

[Whataburger]

We've heard many people say we will increase our bottom line by $1Bil in the near future. I think we buy GAL, use the 757s for Hawaii, sell 737s, use the wide bodies for cargo. It's no secret, cargo=big cash.

 

[GuppyWN]

Hell, I'm in! You don't just borrow 1/2 BILLION dollars to pay interest on it.

Now. Who is REALLY the target? Honestly I think you guys are thinking on too small a scale.

Gup

 

[mbd]

Aren't they simply borrowing the money to buy the 16 aircraft next year? Getting a good rate at approx 6% interest.

 

[328dude]

We have ordered up another batch of 737's a few month's back with later delivery dates. (Can't find the article) All orders up to that point (2010) I think, are already paid for.

 

[Dirty Sanchez]

There is nothing wrong with debt financing, especially with the declining interest rates. The funds could be used for a variety of purposes, including stock repurchase.

 

[PCL_128]

Hell, I'm in! You don't just borrow 1/2 BILLION dollars to pay interest on it.

Now. Who is REALLY the target? Honestly I think you guys are thinking on too small a scale.

What do you have in mind? Personally, I can't imagine SWA management being stupid enough to try to merge a legacy carrier, or even another large LCC. Personally, I think this is nothing but getting their hands on some cheap money while the interest rates are down so they can make a large aircraft purchase or stock buy-back program. I just don't see any large-scale mergers in SWA's future.

 

[GuppyWN]

I agree. Everybody was going merger/buyout crazy so I just thought I'd gas up the fire.

Personally, I think it's nothing more than ledger entries to make us less a target for a LBO and to have a little cash on hand "just in case".

Gup

 

[Reebo]

Think Internationally...

Not AirTran or Alaska. I think the purchase will be Global Aero Logistics (GAL) and operated as a separate subsidiary.

Of course I'm almost always wrong.

One thing for sure.

Whatever happens, it will not be anything we can come up here on any bulletin board.

Good Idea!!!

Between all the GAL groups you have aprox 1500 pilots, ETOPS certification, oceanic experience, and lucrative millitary and cargo contracts.

Could intially be operated separately and eventually merged into one airline. Pay increases for the GAL group pilots and plenty of domestic feed for international flights.

Would put more pressure on the legacys and fleet simplification could come with future 787 and 737RS orders.

 

[obadie]

I thought the money was for a peanut plant.

 

[SkiFishFly]

I thought the money was for a peanut plant.

They have figured out a way to make Jet fuel from the shells... They knew this was coming and that is why they let their hedges "expire".

 

[CF34-3B1]

What we're really doing is building our own refinery.

Hedging is so last year.

 

[Thunderchief]

What is the nearest city that SWA services to Atlanta? BHM? How many people live within 50 miles of ATL? 5 million? hmmmm......

 

[snozberry]

I've heard Lockheed Martin and the city of Marietta want commercial service into Dobbins since the NAS has closed. Most of the business is on the North side of Atlanta near Dobbins. How much does it cost to build a terminal?

 

[STL717]

The Atlanta MSA has 5.1 Million population.

 

[Aubie]

The conspiracy theories of eventual international expansion (beyond El Paso) took a hit when we announced we are sticking to our policy of not assigning seats.

 

[elcid]

SWA buys back over a billion in stock (which is in the toilet), borrows 1/2 billion w/ great financing to buy an airline and still have emergency cash on hand, stock goes through the roof, swa pays off some debt with stock profits, still has billions cash on hand, and more markets/less competition. Genius. Maybe gain international routes, lucrative military charter contracts, cargo, whatever. Our stock’s in the toilet because we have been so conservative. The investors don't see how we're going to set any record profits on this curent track. This ought to shake things up. Just dreaming. But it's a thought. The question is how ugly will a merger be wrt culture, seniority, pay, etc.?

 

[mach zero]

The conspiracy theories of eventual international expansion (beyond El Paso) took a hit when we announced we are sticking to our policy of not assigning seats.

Then why is the SWA Technology Dept. reprogramming our reservations system to handle international flights? Their work should be done on this in the next 12 months. I know I have talked personally to a couple of people who are working on this project.

Who will operate these flights is the question. ATA, SWA, or someone else. Methinks this is why our negiotiating committee is spending such a large amount of time on the scope / merger/ acquisition language right now.

War Eagle BTW!
Mach Zero - fellow AU Aviation Alum