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

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As I've asked before, why on earth would SWA want anything to do with ATL?
I also think that merging or stapling over 1600 pilots would put the whole SWA culture at stake. Not that the AirTran guys and girls aren't a great bunch of people, but it would be a bit risky imo.

Instead of an acquisition of another carrier my guess could be they may be getting ready to fit all their planes with Direct TV and or WiFi? I think that WiFi will be the next big thing for airlines to capitialize on for revenue streams. Not sure what a retrofit of over 500 aircraft would cost though.

Just my .02 cents...

SLC
:cool:
 
United. DEN, IAD, and now SFO. Especially for Int'l ops.
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Not like there's any corporate culture issues or anything. :laugh:
 
Don't forget that SWA is sitting on about $1.5B of stock that they have bought back over the past couple years.
 
SELFloadingCRGO said:
As I've asked before, why on earth would SWA want anything to do with ATL?
I also think that merging or stapling over 1600 pilots would put the whole SWA culture at stake. Not that the AirTran guys and girls aren't a great bunch of people, but it would be a bit risky imo.

Instead of an acquisition of another carrier my guess could be they may be getting ready to fit all their planes with Direct TV and or WiFi? I think that WiFi will be the next big thing for airlines to capitialize on for revenue streams. Not sure what a retrofit of over 500 aircraft would cost though.

Just my .02 cents...

SLC
:cool:
Click to expand...

I was in class a couple of moths ago and we had some finance people come in and talk to us. We asked about ATL, EWR, LGA, JFK. They told us that we would luv to go to all these cities the only problem is no gate space. when asked about satalite airports they said there would be no way to convince somebody from spokane that swf is new york. So i think if there was a way to get gates we would be all over it.
 
SWA tech said:
It would nice to see us pick up Alaskan Airlines they have gotten rid of all of the 80's but 4 of them. Also they go to Mexico and Canada so swa could start flying "International" and we would not have to start up issues. And we would pick up Alaska nice stop also I guess the way they route the flights to Mexico no etops. The one issue may be horizon air just food for thought I would like to see swa do some thing so our stock picks up and so we can keep a good thing going.
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Well, that might be great for SWA but I'm sure Horizon would be f***ed since they have turboprops. SWA didn't want to codeshare with turboprops before so I am sure they won't want to own any.
 
Sep. 20--Southwest Airlines Co., under pressure from some investors to increase its financial leverage, plans to borrow $500 million against its fleet of aircraft.

Southwest is issuing "enhanced equipment trust certificates," or EETCs, secured by the value of 16 Boeing 737-700 jets delivered between Nov. 1, 2006, and May 31. The appraised value of the airplanes is $634 million, according to disclosures filed Wednesday with the Securities and Exchange Commission.

Southwest chief executive Gary Kelly and chief financial officer Laura Wright recently acknowledged that the company's ratio of debt to equity was below ideal levels, although Southwest prides itself on keeping its debt levels far below those of its major competitors.

Some shareholders have been pushing to increase its share buybacks or otherwise increase shareholder return.

Southwest shares rose 6 cents Wednesday to $15.13. They're down 25 cents since Jan. 1 and down $1.64 from a year ago.

Credit: The Dallas Morning News
 
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Nah, you guys are thinking in the wrong direction. They are going to buy Greyhound, just to make really sure that every trailer park in the country is empty...

Nu
 
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
 
SWA tech said:
It would nice to see us pick up Alaskan Airlines they have gotten rid of all of the 80's but 4 of them. Also they go to Mexico and Canada so swa could start flying "International" and we would not have to start up issues. And we would pick up Alaska nice stop also I guess the way they route the flights to Mexico no etops. The one issue may be horizon air just food for thought I would like to see swa do some thing so our stock picks up and so we can keep a good thing going.
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Bingo! I'm surprised that nobody else has done this.
 
GuppyWN said:
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
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Buying an airline would dirty up the balance sheet.:)
 
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.
 
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
 
Aren't they simply borrowing the money to buy the 16 aircraft next year? Getting a good rate at approx 6% interest.
 
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.
 
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.
 
GuppyWN said:
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.
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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.
 
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
 
atafan said:
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. :confused:
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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.
 
What is the nearest city that SWA services to Atlanta? BHM? How many people live within 50 miles of ATL? 5 million? hmmmm......
 
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?
 
The Atlanta MSA has 5.1 Million population.
 
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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.
 
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.?
 
Aubie said:
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.
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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
 

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