Who might Southwest merge with?

[Eagle757shark]

Posted on March 11, 2008 at 3:15 PM]
E-mail | Comments (2)
Filed under: Airlines | Editor's Choice | M&A

Record oil prices are creating additional stress in the airline industry and may lead to different consolidation scenarios, according to Credit Suisse Group analyst Daniel McKenzie. Higher fuel prices will mean fewer lower fares, which McKenzie in a Tuesday note said will make it harder for discounters like Southwest Airlines Co. and AirTran Airways Inc. to win market share. Those airlines instead could look to combine for the sake of scale.

A Southwest-AirTran combination "has appeal as it represents an alternative for [Southwest] to gain share in key markets," the analyst wrote. Given his revised consolidation outlook, McKenzie raised Credit Suisse's rating on AirTran from neutral to outperform.
Whispers of a potential Southwest-AirTran deal have circulated for months, but then again whispers of almost every possible combination have circulated amid growing investor enthusiasm for airline M&A. But it remains far from certain that either company would be interested in such a combination. AirTran, though smaller than Southwest, ranks among the industry's lowest-cost operators, giving it some wherewithal to survive high fuel prices or a travel slowdown. Southwest, meanwhile, is expected to be an opportunistic dealmaker and might not be interested in paying anything more than a distressed price for AirTran if other, cheaper, options are available.
Without doubt both AirTran and Southwest are likely to be actively involved should a round of airline consolidation start as expected. Southwest has been mentioned as a potential acquirer of the Hawaiian operations and other assets of partner ATA Airlines Inc., and it could make a run at Aloha Airgroup Inc. or another company, while AirTran has already made an unsuccessful bid for Midwest Air Group Inc. and could consider other targets or a sale. But for now the companies appear just as likely to be bidding against each other for divested assets from other deals as they are walking down the aisle together. - Lou Whiteman

 

[instructordude]

Holy cow, just imagine...... Southwest Maintenance combined with Airtran Pilots. Danger Danger Danger!!

 

[lowecur]

Probably, the FAA.

imp:​

 

[fam62c]

I don't see why LUV would really want to merge with anyone else. They seem to have a unique corporate culture that works, why throw a wrench into things? LUV/AAI seems unlikely because the majority of AAI's fleet doesn't match with LUV. Mergers generally create more trouble than they are worth. LUV and AAI seem to be doing as well as you can in this type of economy and aren't in any immediate danger of liquidity problems so I would think they would just wait and see what happens around them. Their best opportunities may be organic expansion into voids left by merging/failing majors. Anyway, who knows; anything is possible in this industry and fuel prices are moving into uncharted waters. Hang on for a wild ride.

 

[FBN0223]

Next time, post in the LCC forum. Thanks

 

[Reebo]

Next time, post in the LCC forum. Thanks

Why, is WN not a Major?



BTS 8-08
Contact: Dave Smallen, Tel.: (202) 366-5568
Thursday, February 14, 2008
BTS Releases November 2007 Airline Traffic Data;
11-Month 2007 System Traffic Up 3.2 Percent From 2006

The number of scheduled domestic and international passengers on U.S. airlines during the first 11 months of 2007 grew by 3.2 percent from the same period in 2006, reaching 706.6 million, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) today reported in a release of preliminary data (Table 1).
BTS, a part of DOT’s Research and Innovative Technology Administration, reported that in November, the most recent data month, U.S. airlines carried 59.9 million scheduled domestic and international passengers, 0.7 percent fewer than in November 2006 (Table 2). The number of domestic passengers decreased 1.5 percent in November from a year earlier and international passengers increased 5.4 percent (Tables 7, 13).
The combined domestic and international system load factor of 80.3 percent from January through November was a record for the 11-month period (Table 1). Load factor measures how much of the airlines’ passenger capacity is used.
During the first 11 months, U.S. airlines carried 22.6 million more total system passengers than during the first 11 months of 2006. U.S. airlines would carry a record number of passengers in 2007 if the growth rate over 2006 is sustained in the final month of the year.
U.S. airlines carried 3.1 percent more domestic passengers and 4.6 percent more international passengers during the first 11 months of 2007 than during the same period in 2006 (Tables 7, 13).
Top Airlines
Southwest Airlines carried more total system and more domestic passengers for the first 11 months than any other U.S. airline (Tables 3 and 9). American Airlines carried more international passengers than any U.S. carrier (Table 15).
America West Airlines and US Airways are now operating under a single certificate and are reporting jointly as US Airways for the first time. Numbers reported as US Airways in this release for previous years do not include America West’s numbers. See the notes for system, domestic and international airline ranking tables 3, 4, 9, 10, 15 and 16 for 2007 and 2006 passenger numbers previously reported for America West.

 

[Sedona16]

Merging with http://www.flybe.com/ then buying seats on DeltaWest to get pax across the pond. Then they can trade trailer park pax from Europe with those in America back and forth. Good times.

 

[RIDETHELIGHTING]

Next time, post in the LCC forum. Thanks

No, AirTran and SW are both major airlines. or do you have to be a BK legacy to qulify as a major?

 

[atafan]

No, AirTran and SW are both major airlines. or do you have to be a BK legacy to qulify as a major?

Best boomerang burn of the year!

Ouch...:smash:

 

[71driver]

Next time, post in the LCC forum. Thanks

Dork.....enough said.