Southest wants DL-US merger scraps

[gso-crew]

Southwest reportedly eyes Delta-US Air assets
Low-cost carrier wants to purchase any planes or airport gates, especially on the East Coast, that become available, according to newspaper.
November 21 2006: 7:48 AM EST


NEW YORK (Reuters) -- Low-cost carrier Southwest Airlines has told Delta Air Lines and US Airways Group it would buy any assets they sell if they merged, according to a report Monday.

http://money.cnn.com/2006/11/21/news/compa...rce=yahoo_quote

 

[jimcfs]

More like SW is licking its chops? 😉

 

[USFlyer]

This is one of the reasons why I believe the DOJ will ultimately approve the merger. The LCCs I'm sure want this to happen as it's a way for them to buy additional assets they would otherwise never be able to.

 

[FM2436]

Southwest reportedly eyes Delta-US Air assets
Low-cost carrier wants to purchase any planes or airport gates, especially on the East Coast, that become available, according to newspaper.
November 21 2006: 7:48 AM EST
NEW YORK (Reuters) -- Low-cost carrier Southwest Airlines has told Delta Air Lines and US Airways Group it would buy any assets they sell if they merged, according to a report Monday.

http://money.cnn.com/2006/11/21/news/compa...rce=yahoo_quote

More like Southwest will make demands that it be allowed to purchase any assets that Southwest wants. Could those demands deminish Parker's intend on pursuing this merger?

One of the greater concerns coming from members of Congress is the potential lose and/or reduction of scheduled airline service into smaller non-hub communities as a result of this merger. I doubt Southwest would care about that nor would Southwest propose a plan to provide service into these smaller non-hub communities.

My suggestion is if Southwest wants (demands) to purchase assets, especially on the East Coast, then Southwest must start a regional airline and provide hub and spoke service into these smaller East Coast non-hub markets. They can start with regional service connecting SBY into BWI. A minimum of 5 round trip flights per day flying an aircraft with no fewer than 37 seats.

 

[jimntx]

This also supports my view that there will be NO reduction in capacity in our airline industry. If someone abandons a money-losing route, there will always be another airline that thinks it can make money on the same route.

 

[gso-crew]

This also supports my view that there will be NO reduction in capacity in our airline industry. If someone abandons a money-losing route, there will always be another airline that thinks it can make money on the same route.

I think you're wrong, a lot of the overlapping duplicate capacity Delta through at US Airways in an attempt to run them out of business will go away fast. Example LGA to RIC/GSO/ORF etc. Which might mean, that instead of 5 DL rj's and 5 US rj's, you might see the return of mainline aircraft to the route. We all know that a full 100+ seat aircraft is the ticket.

I think Southwest is interested in the Shuttle.

 

[TechBoy]

I think that Southwest will do whatever it reasonably can do to facilitate this merger. The merger is strongly in Southwest's interest for the following reasons:

1. It will raise the average labor rates at 3 of its competitors (US, HP, DL).

2. It could put some interesting assets in Southwest's hands -- slots at LGA, DCA and gates at CLT -- that might be more difficult to obtain otherwise. Even if Southwest does not want these assets itself, they may provide useful diversions for JetBlue and AirTran.

3. 2 of its major competitors will be distracted by the merger for a couple of years.

4. A 10% reduction in capacity at US and DL creates a lot of headroom for all those new 737s that Southwest has coming. Consolidation of the network carriers is the best thing that could happen to Southwest.

 

[jimntx]

I think you're wrong, a lot of the overlapping duplicate capacity Delta through at US Airways in an attempt to run them out of business will go away fast. Example LGA to RIC/GSO/ORF etc. Which might mean, that instead of 5 DL rj's and 5 US rj's, you might see the return of mainline aircraft to the route. We all know that a full 100+ seat aircraft is the ticket.

I think Southwest is interested in the Shuttle.

First off, think how many times it has been trumpeted in the past 10 years that there is too much capacity in the U.S. airline industry. Every time one airline has attempted to cut capacity or has gone out of business or merged with another airline, another airline has bought up the a/c and started/expanded service to the city or cities where the cutbacks occurred. There are airlines (AA, for instance) that are not in the LGA-RIC market right now because there are already 2 airlines in that market. If those two become one and reduce their combined service, someone (maybe AA) would think, "Hey, if two airlines could make money in that market and now there's only one, I think WE should be in that market."

Case in point...a friend and I were driving back to DEN from Breckenridge yesterday. She is a f/a with Frontier based in Denver. She lives there. We saw a billboard for an airline providing service Grand Junction from DEN I don't remember the name on the billboard. She commented that she had never heard of that airline or seen any of their a/c. This is in addition to the fact UEX already flies there and Frontier is starting up a regional carrier to serve the mountains from DEN.

The closest we have managed to come to actually cutting capacity has been to move service from mainline to the applicable regional carrier. Even there, there hasn't been a true capacity cut. Maybe someone might eliminate 3 mainline flights/day, but replace it with 5-6 regional carrier flights/day.

If Southwest goes after the East Coast Shuttle, I predict a bidding war with AMR. There is a reason why we are holding $5.5 billion in cash right now. I think the original purpose was to buy Asian routes if NWA didn't make it or to buy new a/c when available (to replace MD-80s). Buying an East Coast Shuttle would also be a good use of the money.

 

[PHL]

I don't think SW would move into shuttle territory. Too much over head and a very loyal customer base. The new DL would keep the prices competitive to keep their new combined large share. AMR might put mainline jets on the route, though.

Let SW run a shuttle from BWI-ISP-PVD......

 

[Travelpro72]

Let SW run a shuttle from BWI-ISP-PVD......
[/quote]
Sure would be convenient for the flipflop and backpack crowd....LOL. BWI-ISP-PVD would be a business mans dream...lol. I bet a few will be fighting over the shuttle routes that we give up if this happens. AA or WN, hmmmmm who would win that battle?

 

[mrman]

Let SW run a shuttle from BWI-ISP-PVD......

Sure would be convenient for the flipflop and backpack crowd....LOL. BWI-ISP-PVD would be a business mans dream...lol. I bet a few will be fighting over the shuttle routes that we give up if this happens. AA or WN, hmmmmm who would win that battle?

One only has to look at the shuttles in Texas, FLA, and California to see it would be WN. They even have more frequency than the NE shuttles

 

[DCAflyer]

Let them have the MD80's! B)

 

[wings396]

Yea, SWA along with every other Airline standing on the sidelines is going to want the scraps too. They can get in line with everyone else, and buy what the can afford. I see no reason to kiss their butts exclusivly to make this deal happen. Catering to SWA along with a few of the other
cry-baby Airlines over the years has only contributed to the over capacity mess to begin with. All of the airlines had to deal with the slot restriced airports for years, and then the new guys on the block cry that they should be
"Awarded" some slots too. None of the majors took this route, and played along with the game by purchasing slots when and if they became available. I can't even begin to list all of the perks that have been handed out to a few LCC's by some Airports over the last few years. My former Airport gave any of them tons of freebies over the years, most of which came off the backs of the established carriers that had served the Airport for decades. Most of them left once the free ride was over, and more than one burned the Aiport authority for Millions. I'm sure everyone here recalls the crying that went on in PHL when US tookover most of the EA gates by Midway Airlines.

 

[FWAAA]

If Southwest goes after the East Coast Shuttle, I predict a bidding war with AMR. There is a reason why we are holding $5.5 billion in cash right now. I think the original purpose was to buy Asian routes if NWA didn't make it or to buy new a/c when available (to replace MD-80s). Buying an East Coast Shuttle would also be a good use of the money.

Fortunately, the east coast shuttles are worth only about $300 - $400 million each, so there will be lots of cash left over even if AA buys the assets of one.

Like buying NW (or the valuable parts of NW) sometime after the holidays. Count on it. B)

 

[wnbubbleboy]

Catering to SWA along with a few of the other
cry-baby Airlines over the years has only contributed to the over capacity mess to begin with.

I would like to take this opportinity to apoligize for any inconveince we may have caused you.