Will SWA buy, or merge with another airline in the near future?

[swamt]

Rumors are flying around that SWA will once again forgo in another airline purchase, or merger.  We have always heard about Alaska Airlines.  Someone finally asked G. Kelly about it. Take it as you will, BUT, why can't he talk about confidential information on this issue.  Here's his response to an employees question about future airline mergers.:
 
Jason: My name is Jason. I'm an Operation Agent in Nashville, and my question for Gary is: do we have 
any intentions on buying any other airlines down the road?
Gary: Well, hello, Jason. Great question and, you know, that's one of those things that I can't give you 
anything that's confidential, so, let me just answer this question this way: we've acquired airlines in our history and AirTran is, depending on how you count some of the acquisitions we’ve made, the fourth. I 
think acquisitions are challenging—they are very unique—and they need to make sense. It especially 
helps to do an acquisition if other growth opportunities are not available because every company 
aspires to grow. Growth is good for our People; growth is good for Shareholders; it's certainly good for 
the Company.
At this point, we worked really hard, and, especially over the last four years, to create the capabilities to 
grow Southwest Airlines and the interesting thing is—again, I've been at Southwest for 28 years—in my 
28-year history, we've never had a point in time like this one where we have so many growth 
opportunities. So, you probably heard me say that right now we have 50 potential destinations that we 
could add to the Southwest route map. They're all beyond the 48 states, but we've never had that many 
opportunities at a given point in time ever in our history. Some of it was the nature of our route system 
where we would grow gradually and any point in time we might be able to add five new cities—and we 
wouldn't add them all at once. But, I'm just talking about having an opportunity. So, very significant 
opportunities to grow, and we don't need an acquisition to grow Southwest Airlines is the point. 
AirTran has worked out beautifully. AirTran has boosted Southwest by 20-to-25 percent. You look at 
our record stock price—our record earnings—that we're enjoying. The fact that we have our return on
invested capital target within our sights—AirTran has helped us achieve all that in a very meaningful 
way, and it's worked out very well. AirTran added a significant amount of domestic geography; it added 
Washington Reagan Airport; it added Atlanta and 15 other domestic cities—much less, you know, a toe 
in the water, if you will, in terms of international service. So, it's worked very well.
Right now our focus is on completing the work that we set out to do in 2010. We brought online the 
737 -800; we've implemented a new frequent flyer program; we've launched international; we're in the 
final stages integrating AirTran; and we have launched the replacement of our reservation system.
That's our focus, and that will continue to be for other foreseeable future. Over the next five years, I 
think, our focus ought to be on growing Southwest Airlines, focusing on hospitality—serving our 
Customers exceptionally well, and running a very reliable airline. In particular, we need to make sure 
that we restore our ontime performance to where we were in 2012, and I'm very confident that we will 
do that.
So, that's what we need to be passionate about. That will be our focus over the next five years and as to 
whether or not another acquisition makes sense, we'll just have to stay tuned on that. But we have
wonderful growth opportunities at Southwest Airlines now that I know you're as excited about as I am

 

[jimntx]

 
Rumors are flying around that SWA will once again forgo in another airline purchase, or merger.  We have always heard about Alaska Airlines.  Someone finally asked G. Kelly about it. Take it as you will, BUT, why can't he talk about confidential information on this issue.
 
 

Uh, because if it is public knowledge, it's no longer confidential.  Mergers and acquisitions are activities that need to stay under the radar while the negotiating is going on.  First off, the parties must be careful that nothing is done by either party that might peak the interest of the SEC as stock trading based on "inside knowledge."   Also, if both parties are agreeable to merging with each other, they like to avoid interference from other airlines that might want to prevent the merger for competitive reasons.

 

[WorldTraveler]

the sad thing is that Gary Kelly stated that he is focused on internal growth even though swamt interprets it quite differently. He's not going to draw pictures. Wonder if swamt has as hard of a time interpreting Boeing's service manuals as he does what Gary said.

and are you sure that he would be proud to see an internal WN discussion being posted on the internet?

 

[swamt]

Uh, because if it is public knowledge, it's no longer confidential.  Mergers and acquisitions are activities that need to stay under the radar while the negotiating is going on.  First off, the parties must be careful that nothing is done by either party that might peak the interest of the SEC as stock trading based on "inside knowledge."   Also, if both parties are agreeable to merging with each other, they like to avoid interference from other airlines that might want to prevent the merger for competitive reasons.

I know this Jim.  The post is to enlighten the fact that he avoided answering this question.  It seems to perk up the idea that something (although later down the road) might be in the works.  It just seems to help support the rumor a little.  Pretty sure SWA/Alaska merger would be great and good for everybody in the long run.

 

[WorldTraveler]

his response was for internal growth whether you can read it or not.

personally, I would be for an AS/WN merger though.

WN would dismantle the hub, raise prices, and DL would be better off.

 

[blue collar]

I know this Jim.  The post is to enlighten the fact that he avoided answering this question.  It seems to perk up the idea that something (although later down the road) might be in the works.  It just seems to help support the rumor a little.  Pretty sure SWA/Alaska merger would be great and good for everybody in the long run.

Seems like WT is following you around. Must be a slow news day in Brazil.

 

[WorldTraveler]

I don't think they are worrying about Ebola there today.

 

[jimntx]

I know this Jim.  The post is to enlighten the fact that he avoided answering this question.  It seems to perk up the idea that something (although later down the road) might be in the works.  It just seems to help support the rumor a little.  Pretty sure SWA/Alaska merger would be great and good for everybody in the long run.
 
 

I hope you don't think that if he had divulged to that employee and the others in the room some confidential information and then told them "Now, you can't say anything about this to anyone.  Will each of you promise not to tell?" that the information would remain confidential.  Every company on the planet has at least one employee who would sell their grandmother for a cheeseburger and two beers.    There is no way to keep mergers and acquisition info confidential if you even answer the question with "Yes.  We are working on merging with another company."  Because at that point you then owe information to your stockholders so that they can evaluate the effect a merger would have on their investments.  Bye, Bye, Confidentiality
 
And if, in the end, the merger/acquisition does not go through, it ends up having negative consequences for someone--stockholders, employees, and/or the reputation of the executive who had the idea in the first place.

 

[ChockJockey]

Keep Alaska their Alaska.  I think that after the last round of mergers it's hard to see the DOJ approving any more consolidation involving the Big Four anytime soon.  Doesn't SWA have enough to focus on with international expansion and the overhaul of their information systems?

 

[WorldTraveler]

[background=#f7f7f7]I hope you don't think that if he had divulged to that employee and the others in the room some confidential information and then told them "Now, you can't say anything about this to anyone.  Will each of you promise not to tell?" that the information would remain confidential.  Every company on the planet has at least one employee who would sell their grandmother for a cheeseburger and two beers.    There is no way to keep mergers and acquisition info confidential if you even answer the question with "Yes.  We are working on merging with another company."  Because at that point you then owe information to your stockholders so that they can evaluate the effect a merger would have on their investments.  Bye, Bye, Confidentiality[/background]

 
[background=#f7f7f7]And if, in the end, the merger/acquisition does not go through, it ends up having negative consequences for someone--stockholders, employees, and/or the reputation of the executive who had the idea in the first place.[/background]

information that is told to employees IS considered public.
the point is not that WN was telling its employees something that would have provided information to their strategic moves.

that won't happen.

the point is that a transcript of a WN employee meeting was never intended to be published on the internet and I am pretty sure they have internal regulations about copying information from WN's internal website.


I don't think WN is going to go after AS either.

But if they do, it would be great news for DL. WN does wonders of clearing out of markets that involve DL and raising prices as they pull out.

It isn't entirely a surprise that DL's profits are closely related to WN's drawdown of ATL.

besides, WN is reportedly going to develop FLL as its 2nd major int'l gateway behind HOU.

two WN int'l hubs in AA and UA backyards.... such a beautiful thing.

 

[WNMECH]

I hope you don't think that if he had divulged to that employee and the others in the room some confidential information and then told them "Now, you can't say anything about this to anyone.  Will each of you promise not to tell?" that the information would remain confidential.  Every company on the planet has at least one employee who would sell their grandmother for a cheeseburger and two beers.    There is no way to keep mergers and acquisition info confidential if you even answer the question with "Yes.  We are working on merging with another company."  Because at that point you then owe information to your stockholders so that they can evaluate the effect a merger would have on their investments.  Bye, Bye, Confidentiality
 
And if, in the end, the merger/acquisition does not go through, it ends up having negative consequences for someone--stockholders, employees, and/or the reputation of the executive who had the idea in the first place.

The point is, Gary could have just said no.
But he didn't and he left the door open.

 

[WNMECH]

Keep Alaska their Alaska.  I think that after the last round of mergers it's hard to see the DOJ approving any more consolidation involving the Big Four anytime soon. 

I don't believe that.
If WN bought Alaska, we still would not be the largest airline in the country and there would still only be four big airlines.
If the DOJ allowed the other guys to be that big, why not allow a low cost airline to be as large?

 

[WNMECH]

He's not going to draw pictures. Wonder if swamt has as hard of a time interpreting Boeing's service manuals as he does what Gary said.

You are not so good at interpreting plain English either.
I posted plenty of links to the Wright amendment reform act and links to the lease passages in the Dallas airport competition plan that explained exactly what would happen to DAL at Love Field.
You didn't grasp any of it until everything I said would happen slowly did.

We will read our own tea leaves thank you.

 

[WorldTraveler]

The point is, Gary could have just said no.
But he didn't and he left the door open.

 and you clearly don't understand business if you think that no answer means anything other than not defined.

It doesn't mean the opposite of what the question or anything else.

And he still said that WN's focus was on internal int'l growth.

How you can fail to see that is really breathtaking.

Perhaps it isn't such a surprise that WN ahs incurred numerous massive FAA maintenance penalties given the reading comprehension of their "spokespersons" on here who claim to be mechanics.
 

You are not so good at interpreting plain English either.
I posted plenty of links to the Wright amendment reform act and links to the lease passages in the Dallas airport competition plan that explained exactly what would happen to DAL at Love Field.
You didn't grasp any of it until everything I said would happen slowly did.

We will read our own tea leaves thank you.

and you don't grasp that DL could care less as long as DL was allowed to play.

the whole basis of the WA and all of its revisions was because the interested parties - AA, WN, and gov't officials all were happy with what they saw.

DL flew from DFW for years because AA and WN couldn't do anything more at DAL than DL could.

The legal flaw was that there has never been anyone left out - until DL was told they couldn't fly to DAL.

YOu can bet your bottom dollar that the whole arrangement will be reviewed with objective, unbiased eyes like it never has before.

WN better have plans for how to hold their DAL operation together but I would strongly suggest that a distinct possibility exists that the whole notion that 16 gates were WN's will be questioned along with how any other carriers were allowed to enter the market and the basis on which anyone else could as well.

DAL is unlike any other airport in the country and I can assure you it will be shown the current arrangement doesn't meet federal law.

WN will either have to decide to operate the airport as a private airport paying for DAL itself or comply with federal law.

 

[WNMECH]

and you clearly don't understand business if you think that no answer means anything other than not defined.It doesn't mean the opposite of what the question or anything else.And he still said that WN's focus was on internal int'l growth.How you can fail to see that is really breathtaking.Perhaps it isn't such a surprise that WN ahs incurred numerous massive FAA maintenance penalties given the reading comprehension of their "spokespersons" on here who claim to be mechanics. and you don't grasp that DL could care less as long as DL was allowed to play.the whole basis of the WA and all of its revisions was because the interested parties - AA, WN, and gov't officials all were happy with what they saw.DL flew from DFW for years because AA and WN couldn't do anything more at DAL than DL could.The legal flaw was that there has never been anyone left out - until DL was told they couldn't fly to DAL.YOu can bet your bottom dollar that the whole arrangement will be reviewed with objective, unbiased eyes like it never has before.WN better have plans for how to hold their DAL operation together but I would strongly suggest that a distinct possibility exists that the whole notion that 16 gates were WN's will be questioned along with how any other carriers were allowed to enter the market and the basis on which anyone else could as well.DAL is unlike any other airport in the country and I can assure you it will be shown the current arrangement doesn't meet federal law.WN will either have to decide to operate the airport as a private airport paying for DAL itself or comply with federal law.

You are showing again that you can't understand how Love Field works.

The Wright Amendment Reform Act had plenty of unbiased eyes on it and was passed by both houses of congress and signed into law by the Potus. The DOJ also blessed the agreement.

It is the law and has antitrust protection.

You should have read the links I posted over a year ago when you were arguing the same BS.
You would have learned something instead of continuing to show your ignorance on the subject.