Who will be Southwest's merger partner?

[Jet41]

Colgan

 

[Andy]

No merger, just internal growth. My bet is that the bulk of it occurs in DEN. F9 will be shrinking in bankruptcy and LUV is likely planning a big expansion there. That should be enough to keep them busy for a while. It'll be interesting to see if LUV pushes to pick up a bunch of A gates in DEN.

 

[FatesPawn]

You're right, if it wasn't for the recent legislation, I'd be much more concerned.

If the company is sold whole, the pilots go.

If the company is parted out while still a viable entity, the pilots have to go with any deal that is considered a large portion of the operation taken as a large combination of aircraft and gates to a single buyer.

Lear,

I don't disagree with you that the Bond/McCaskill legislation makes it much harder to NOT take employees.....

...however, the new legislation only applies IF employees are part of the deal. A scenario like the former Muse/Transtar deal perhaps operated separately, in a wet-lease deal slowly moving assets like gates and airplanes over the the acquiring company that DOES NOT involve the transfer of people does not fall under the language of the Bond/McCaskill legislation.

This may sound far fetched but the bottom line is Allegheny Mohawk will only apply if people are part of the deal. If it's for assets only, your merger/fragmentation language is your only protection.

-fate

 

[WalterSobchak]

I'm certain no one wants our 717's... it's probably what kept someone from coming after us before. The problem is selling them to someone who wants what we owe on them.

I could see Hawaiian interested in a few of them for interisland service...not sure who would take the remaining 80-something airframes.

 

[GuppyWN]

No merger, just internal growth. My bet is that the bulk of it occurs in DEN. F9 will be shrinking in bankruptcy and LUV is likely planning a big expansion there. That should be enough to keep them busy for a while. It'll be interesting to see if LUV pushes to pick up a bunch of A gates in DEN.

Nail meet hammer. Good summation Andy. I was in DAL this week and there's big talk about DEN. Market it growing exponentially and most all our growth plans this year were focused on Denver. That was before Friday. I'd expect a major push second half of the year to include taking more airplanes and pilots than expected for 2008.

Gup

 

[bmxandjets]

Nail meet hammer. Good summation Andy. I was in DAL this week and there's big talk about DEN. Market it growing exponentially and most all our growth plans this year were focused on Denver. That was before Friday. I'd expect a major push second half of the year to include taking more airplanes and pilots than expected for 2008.

Gup

so would that mean HR would start gearing up for more interviews..?

 

[Secret Squirrel]

so would that mean HR would start gearing up for more interviews..?

Or they could buy someone, like airtran, and pull overlapping capacity, like BWI, and send it to Denver.

 

[GuppyWN]

BMX, don't know. I didn't ask how deep the pool was but last I heard there are 3 classes this month and 2 in May. Could very well be just to catch up. We are fat on the captain side and really short on FO's. I love the F9 guys and hope they are doing all the right things to revive their cash position but if there is a void left in Denver I'd hope it would be us that filled it.

I'm just a line guy. All I have is speculation based on what I heard in Dallas.

Gup

 

[RedDogC130]

I think the pool was 300+ deep...from what I remember way back

 

[vandypilot]

Spirit has gates in LGA, BOS, ATL

 

[Skybus]

Spirit has gates in LGA, BOS, ATL

One would have to assume is we wanted gates in those places we would have kept the ATA gates that they gave up???

 

[TZtoSWA]

so would that mean HR would start gearing up for more interviews..?

From one of our chiefs this week. We may be interviewing this year after all but...
it won't be until late summer or early fall at the earliest.

 

[Lear70]

Lear,

I don't disagree with you that the Bond/McCaskill legislation makes it much harder to NOT take employees.....

...however, the new legislation only applies IF employees are part of the deal. A scenario like the former Muse/Transtar deal perhaps operated separately, in a wet-lease deal slowly moving assets like gates and airplanes over the the acquiring company that DOES NOT involve the transfer of people does not fall under the language of the Bond/McCaskill legislation.

This may sound far fetched but the bottom line is Allegheny Mohawk will only apply if people are part of the deal. If it's for assets only, your merger/fragmentation language is your only protection.

-fate

I agree with you completely...

In all these scenarios, we haven't talked about ANYTHING being done slowly; we've talked outright purchase.

If they purchase the entire operation, they have to take the pilots, that's in our M&A language.

What's not in there is clear language on fragmentation, i.e. they buy the entire airline then immediately split it up. That's covered by Bond/McCaskill.

If the airTran BoD were to sign a deal to slowly transfer portions to other places, similar to how ATA has slowly eased into the sunset, then we'd likely be screwed.

Fortunately (for now), we're not in a position to need to do that operationally. It would have to be a LOT of money to even consider it. Southwest doesn't really spend money like that without getting it bargain-basement and, thankfully, they seem to be focused elsewhere at the moment.

It's all a big crap shoot anyway.

 

[Green Banana]

So, as I understand it, LUV went with ATA for the Hawaii connection. Now that ATA is out of the picture, Won't they go for somebody with some Hawaii routes. Somebody that goes to say, Honolulu, Kauai, and newly announced Maui with an all 737 fleet?????

 

[Cobra17]

I'm guessing they are looking for an international codeshare partner since that's where the revenue is. I've heard they are willing to swap some Harlingen gates for some Singapore Air FA's.

 

[Nightrain_080]

Why doesn't SW start their own Hawaii and Mexico runs? The growth will continue

 

[DesertFalcon]

Alaska is my hugely uneducated guess. More west coast presence, especially the northwest. Mostly 737 fleet.

Actually, that is one I didn't think about. Alaska might be a good merger?

I don't think would be the only addition to SWA. They really need more than just an Alaska merger.

SWA really needs to stay with there successful model; merging with other aircraft types just makes them like everyone else... They need to avoid this at all costs!

 

[Secret Squirrel]

Why doesn't SW start their own Hawaii and Mexico runs? The growth will continue

It is probably easier to buy someone who has ETOPS in their ops already with ETOPS airplanes.

 

[Esprit]

Why would anyone want to be WN's "merger partner"? Didn't you guys see what they did to their "codeshare partner"?

ESPRIT

 

[GuppyWN]

I take offense to that.

We didn't "do" anything to ATA except buy the gates YOU had for sale and give you an interest free loan of $135 MILLION bucks.

And whoever / whatever it is it aint gonna be a "merger."

Gup

 

[Lear70]

Maybe not, but it's not going to be a "staple", either.

New laws don't allow for it.

 

[Esprit]

I take offense to that.

We didn't "do" anything to ATA except buy the gates YOU had for sale and give you an interest free loan of $135 MILLION bucks.

Gup

Don't forget WN helped ATA's Pilots by in effect nixing the AWA merger that would have kept them all employed today. They also helped ATA by bringing that scumbag John Dennison (ex-SWA CEO) in to scuttle all of their routes (MDW-Florida, MDW-DEN, DEN-PHX, many others) and create the lop-sided codeshare agreement to Hawaii. When they finally closed the doors, airlines were tripping over themselves to help ATA Pilots out with extended jumpseat agreements and preferential interviews (Delta, Continental, Atlas, Omni, Netjets to name a few). What did SWA do? Cue the crickets. Believe what you want to believe, but to many ATA Pilots, SWA played a part in their airlines demise. Rising fuel, inept managers, and old piece-of-crap DC-10s being some others.

ESPRIT

 

[FatesPawn]

Maybe not, but it's not going to be a "staple", either.

New laws don't allow for it.

Lear,

There are 2 points that everyone really needs to realize.

1. The Bond-McCaskill bill only applies where a "transaction" includes "combining" workforces. If someone buys 50%+ of a company, and takes no employees (of a certain class or craft), applying allegheny-mohawk is not necessary.

2. Allegheny-Mohawk does not preclude stapling if it is done in a "fair and equitable" manner. Now, how is stapling EVER fair and equitable? I'm sure everyone can think of examples so I won't try to fuel a flame war.

..... and I'm not insinuating that SWA stapling Airtran WOULD be fair. I'm just stating that although the new legislation DOES provide new protections, there are also unintended consequences for both sides of a merger/acquisition.

-fate

 

[PCL_128]

Lear,

There are 2 points that everyone really needs to realize.

1. The Bond-McCaskill bill only applies where a "transaction" includes "combining" workforces. If someone buys 50%+ of a company, and takes no employees (of a certain class or craft), applying allegheny-mohawk is not necessary.

Purchasing 50% of an airline without taking employees with it is impossible. How exactly would SWA operate 139 aircraft without taking the pilots with them? While your statement is technically correct, in practice it's not really relevant.

2. Allegheny-Mohawk does not preclude stapling if it is done in a "fair and equitable" manner. Now, how is stapling EVER fair and equitable? I'm sure everyone can think of examples so I won't try to fuel a flame war.

The only example I could think of would be a major merging a regional into the mainline list. Stapling another mainline group would never pass the smell test in this legislation.

 

[FatesPawn]

Don't forget WN helped ATA's Pilots by in effect nixing the AWA merger that would have kept them all employed today. They also helped ATA by bringing that scumbag John Dennison (ex-SWA CEO) in to scuttle all of their routes (MDW-Florida, MDW-DEN, DEN-PHX, many others) and create the lop-sided codeshare agreement to Hawaii. When they finally closed the doors, airlines were tripping over themselves to help ATA Pilots out with extended jumpseat agreements and preferential interviews (Delta, Continental, Atlas, Omni, Netjets to name a few). What did SWA do? Cue the crickets. Believe what you want to believe, but to many ATA Pilots, SWA played a part in their airlines demise. Rising fuel, inept managers, and old piece-of-crap DC-10s being some others.

ESPRIT

Esprit,

First of all, I'm truly sorry for you guys. I have a couple of friends that lost their jobs - and a couple more that DID come to SWA over the last few years.

With regard to who was who's savior.... wasn't jumping in bed with SWA the result of RUNNING from the proposed Airtran wet-lease deal? I remember America West came in late in the process, but I truly forget the specifics. Why didn't ATA go with AWA if it was a better deal?

With regard to what SWA did for you guys after the shutdown, I do know we extended jumpseat privileges. How may of those above listed airlines offered you guys preferential interviews because it sounds like SWA did pretty much what other did? Is that wrong?

-fate

 

[FatesPawn]

Purchasing 50% of an airline without taking employees with it is impossible. How exactly would SWA operate 139 aircraft without taking the pilots with them? While your statement is technically correct, in practice it's not really relevant.

Hey, I'm not arguing that is would be improbable at the numbers you're talking. But think of SMALLER companies or wet lease agreements with elaborate codeshares set in place and the picture starts to get fuzzier. While fully CONTROLLING the newly acquired company through a codeshare/holding company/wet lease agreement, we could transfer assets on a graduated basis with NO employees there by bypassing the need to "fairly and equitably" integrating groups.

BELIEVE ME, I'm not hoping for ANY of this. I'm only stating that the new laws aren't the panacea that a potential "acquiree" might believe.

Got Scope?
Got Merger/Acquisition Language?
Get some.

That's what's important.

The only example I could think of would be a major merging a regional into the mainline list. Stapling another mainline group would never pass the smell test in this legislation.

Or another unorganized pilot group. Belonging to a Union is very important. Ask the Morris or Muse air guys how the integration went without any collective bargaining agreement to fall back on.

-fate

 

[FatesPawn]

How exactly would SWA operate 139 aircraft without taking the pilots with them?

PCL.... also, this assumes that SWA would be taking any airplanes in the first place. SWA's MO (ask the ATA guys) is more up the codeshare alley. SWA could codeshare for a while, and begin to move into gates and markets they formerly didn't serve.

Don't expect any GRANDIOSE move by SWA. It'll be more insidious and gradual. But don't think the result won't be good for SWA at the expense of their competition. Maintaining growth at SWA is VERY important to our business model. Keeping our employee ranks filled with new hires really helps keep our costs in place.

-fate

 

[regionaltard]

Or another unorganized pilot group. Belonging to a Union is very important. Ask the Morris or Muse air guys how the integration went without any collective bargaining agreement to fall back on.

Your point about being unionized is well taken, but I'm guessing that you'd have a tough time finding a Morris Air pilot who isn't tickled pink by the way things turned out.

 

[PCL_128]

PCL.... also, this assumes that SWA would be taking any airplanes in the first place. SWA's MO (ask the ATA guys) is more up the codeshare alley. SWA could codeshare for a while, and begin to move into gates and markets they formerly didn't serve.

Don't expect any GRANDIOSE move by SWA. It'll be more insidious and gradual. But don't think the result won't be good for SWA at the expense of their competition. Maintaining growth at SWA is VERY important to our business model. Keeping our employee ranks filled with new hires really helps keep our costs in place.

-fate

That's an interesting take on it, and I think that works when dealing with distressed smaller airlines like ATA, but when dealing with an airline the size of AirTran, Alaska, etc..., those sorts of agreements aren't really workable. Unless we are in distress and in bankruptcy, the shareholders would never accept a deal that allows the gradual destruction of their airline in favor of the new codeshare partner. If we get close to bankruptcy, then all bets are off, but we're at least a good 18 months away from that even being a remote possibility. With our financial condition as it stands now, an ATA-style codeshare agreement would never fly.

 

[DesertFalcon]

So, besides Alaska who is a good partner with Southwest?

I am enjoying the discussion you guys are putting out there but we haven't identified a partner for Southwest yet?

What company out there has the routes and, the B-737 fleet Southwest might want?

I guess Alaska and Airtran is it.. I suppose Southwest could sell the AirTran fleet and replace the sold aircraft with B-737's?