It would quickly give WN a dual fleet and a large presence in Central and South America, which they want. Southwest paid $1.4 billion for AirTran. A brewing fight over the future of the budget carrier Spirit Airlines may give rise to a credible, albeit still smaller, competitor to the industrys giants. And, it would also put itself in a position to be a market share consolidator in the post-pandemic recovery. The Motley Fool has no position in any of the stocks mentioned. Neither the U.S. Department of Transportation nor A4A maintains official records of airline M&A activity. Its not necessarily an amazing strategy (Alaska has the same basic problem with future growth and the MAX), but its arguably more viable than two airlines merging that would yield a dumbbell shaped network that doesnt have a hub or a focus city more than five miles from a coastline- Southwest, unlike Alaska and Jet Blue, actually doesnt treat flyover country like a joke and a spoke (and Alaska at Love Field is a joke). This is actually an interesting theory. According to inc.com, the company got in some trouble for taking their passengers to the wrong airport, and someone even sued them for doing this. Selling Groups, family and Adventure Travel. JetBlues stock has fallen more than 10 percent since The Times reported its offer for Spirit in part because investors are unsure of JetBlues ability to fully take advantage of the acquisition. With Spirit being smaller (and among the most disliked airlines in America, BTW), I think its an easier sell. Terms apply to the offers listed on this page. While obviously a smaller number of aircraft, the A321neo does offer about 25% more seats than the MAX8, and so could address much of Southwests capacity growth needs. Downdetector only reports an incident when the number of problem reports is significantly . Southwest is probably also large enough to fit in this too-big-to-merge category. And US Airways had much less in the way of contested hubs than an Alaska/Jet Blue hybrid would- they would literally have a bigger competitor in EVERY hub or focus city outside of Anchorage (lol). (Photo by FG/Bauer-Griffin/GC Images), conference at Southwest Airlines headquarters on April 17, 2018 in Dallas, Texas. 2008 - Acquired Tampa Cargo. Added Becker, You can see Allegiant, Frontier and Spirit merge. Downdetector only reports an incident when the number of problem reports is significantly higher than the typical volume for that time of day. Acquiring JetBlue makes sense in terms of acquiring a foothold back in New York, but they operate an all Embraer/Airbus fleet, which clashes with their current model. Frontier could also offer to pay any costs associated with the risk that regulators would challenge the merger in court. Enjoy Complimentary Marriott Bonvoy Gold Elite Status with your Card. This adds a ton of complexity that Southwest's management is not accustomed to. Southwest is a discount airline serving the US market. Even in ideal circumstances, airline mergers can be difficult to pull off. This heat map shows where user-submitted problem reports are concentrated over the past 24 hours. Alaska has a completely incompatible culture to include not hiring pilots if they use nicotine. Rumors are swirling that Southwest Airlines may solve its lingering Boeing 737 MAX problem by acquiring another airline. With a complementary narrowbody feet, Alaska Airlines and JetBlue are best positioned to absorb or be absorbed by Southwest. There might also be some push-back from federal regulators. Though Virgin was a relatively small airline, Alaska probably won't be making any other acquisitions in the near future. (214) 792-4000 Southwest is the #3 US airline by marketshare. In Q2 WN had the highest net margin DESPITE the issues with the MAX. The MAX saga has introduced a new risk for Southwestthat of operating a single fleet type where your ability to fly the aircraft is determined by other airlines, other airlines' pilots, and Boeing, writes DeNardi. In the meantime, the 737 MAX continues to drag on Southwest. Not a chance in heck. 'Blue was outbid by Alaska, but the move did show that the carrier is open to the possibility of merging its operation with another airline. Improve earnings, maximize rewards and track progress toward dream trips. I recently spent a weekend at the @ventanabigsur. ATA is in a horrible position. Southwest Airlines' Destination 225 Program ST. GEORGE, UTAH, March 17, 2022 - SkyWest Airlines, a wholly-owned subsidiary of SkyWest, Inc. (NASDAQ: SKYW), is pleased to announce a new partnership with Southwest Airlines as part of the carrier's Destination 225 Program. Airline acquisition stories are always intriguing, like the perpetual rumor that Warren Buffett would buy Southwest (he does own about 10.2%.) Such a complicated industry. 717sgone. The real reason why Southwest CEO Gary Kelly is so eager to reach new labor contracts probably has a lot more to do with a desire to keep operations smooth in a period when Southwest Airlines is earning record profits. However, it is highly unlikely that Southwest Airlines is thinking about any merger. It would be the first merger of large . But one has to wonder if there are any logical merger targets left for JetBlue now that VA is off the market. WASHINGTON, February 2, 2022 Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, led a coalition of travel-industry groups urging 2023 Airlines for America (A4A). Alaska and JetBlue would be a stronger force, as would American and Southwest. Entrance to Southwest's corporate headquarters in Dallas, Texas. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Yes they can unwind those contracts over time but until they do their business model has just changed dramatically. Not too many people would miss Sun Country and its planes fit. Rumors that, if correct, could dramatically change the playing field in Hawaii travel. This requires amenities like first class seats and airport lounges that don't exist at Southwest. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Some critics of corporate consolidation disagree and say that airline mergers could be bad for consumers and workers. www.southwest.com. Financial troubles, including a string of bankruptcies, in the 2000s led to the latest wave of large mergers, motivated in large part by survival, said William Swelbar, an aviation consultant and research engineer at the Massachusetts Institute of Technologys International Center for Air Transportation. Alaska Air is also a 737 operator, but that doesn't make it a great merger partner for Southwest Airlines. It is the only known comprehensive, centralized, publicly available source. Southwests largest acquisition to date was in 2010, when it acquired AirTran Airways for $1.4B. Becker has Market perform ratings on both United and JetBlue. Finally, the free night award certificate with a redemption level of 35,000 points or less can get you hundreds of dollars in potential value each year. Southwest aircraft taxiing in Ft. Lauderdale, Florida. As a subscriber, you have 10 gift articles to give each month. Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, and reddit. The company's sprawling factory in Renton, Washington is a hive of activity on this sunny Wednesday, March 28, 2019, during a tightly-managed media tour as Boeing tries to communicate confidence that it has nothing to hide. It operated 194 A320 family jets and 60 Embraer 190s at the time. Yes, a small amount of planes, but all 737 NG planes and they wouldnt need a ton of reconfiguration. It is against the APC Forum Rules to advocate any labor action which is not authorized by the RLA/NMB. For such reasons, a deal is unlikely to happen. Alaska is the exact opposite of Southwest. Unfortunately, Airbus has a backlog of 3200 aircraft to deliver. Save my name, email, and website in this browser for the next time I comment. The airline has removed the aircraft from schedules through Feb. 8, and continues awaiting clarity from U.S . Adam Levine-Weinberg owns shares of Hawaiian Holdings, and The Boeing Company and is long January 2017 $17 calls on JetBlue Airways. Alaska could cost close to 10 times that amount, given that its market cap is already $9.7 billion and a merger premium would be necessary. Today, DeNardi writes,Currently, Southwest's business model is entirely dependent upon the [737]MAX returning and Boeing resuming/ramping production. Southwest is arguably the US airline most affected by the continuing Boeing 737 MAX disaster. But its instructive to note that what was originally considered tragic but short term problem for Boeingthe initial crash of a Lion Air Boeing 737 MAX on October 29, 2018has morphed into a massive issue that has consumed the company, its now-fired CEO, its reputation and stock price. 75235 The AirTran merger brought a second type of plane -- the 717 -- into Southwest's fleet. The new United Polaris Lounge at Washington Dulles, @malaysiaairlines just announced it would retire i, Welcome to @fly_bur @aveloair! makes WN a player in MSP also. Related:Southwests 737-700s Among Jets Sticking Around Longer Because of the MAX, "Southwest needs aircraft. We dont think any of the big U.S. airlines are in danger of bankruptcy at this juncture, Becker adds. A combined Southwest and JetBlue would have a solid 25% share of U.S. domestic traffic, based on DOT data for 2018. That would be a more reasonably sized candidate than AS or B6. If You Do This, You Won't Have to Worry About Them, 1 Trillion-Dollar Growth Stock Down 28% You'll Regret Not Buying on the Dip, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. Its style and company profile do not present any viable merger candidates in the United States. Classless Southwest Hawaii Review SJC to LIH: Quirky, Unique, How Some Tourists are Ruining Hawaii Travel for Everyone, Stunned! But dear @flysas , next time if I a, Ready for #PIA from #MAN to #JFK -- we will be rac, Another room with a beautiful view #hyattregenc, Enjoying #shanghai with @onemileatatime from the i, From my front gate to my boarding gate in 15 minut, @malaysiaairlines #747 out of retirement and in se, View from my 61st floor room at the beautiful bran. From a single cabin of service to free checked baggage to no redeyes to an aversion to aircraft diversity, Southwest is a lone star airline that dances to the beat of a different drum. It is irrelevant whether the union itself has anything to do with the action. That mindset has just been proven false with Alaska Airline's acquisition of Virgin America. - After two fatal crashes in five months, Boeing is trying hard -- very hard -- to present itself as unfazed by the crisis that surrounds the company. The Justice Department is seeking to nullify an alliance between JetBlue and American in the Northeast. Hawaiian serves its namesake state from the West Coast, and JetBlue has a number of routes in the Eastern U.S. A merger could give Hawaiian a nationwide network to feed its bread-and-butter flights to the islands from the West Coast. With its recent Virgin America purchase, Alaska Airlines is now the fifth largest carrier in the country. Second I tend to doubt that an Alaska or JetBlue acquisition would be allowed by the DOT. Edward joined the TPG team in June 2019 after seven years at FlightGlobal. Southwest has acquired in 4 different US states. All Rights Reserved. Then Republic took over. However, gaining the terminal at JFK (which would be an extremely valuable gateway to Europe) would be the boon. Southwest grew tremendously internationally after acquiring AirTran. Regarding anti-trust issues JetBlue is an awfully big acquisition and may be harder to get past regulators. Bigger airlines also get lower prices and better service from airplane manufacturers. People talk about business models, aircraft type, etc most of that is irrelevant. By logging into your account, you agree to our. Learn More. It charges extra for seat selection and carry-on baggage and packs seats close together. (Photo by Stewart F. House/Getty Images), Southern California Logistics Airport in Victorville, California on March 28, 2019. Not setting foot on one for a few years until I am certain it is safe. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel. Rumors of a Frontier-Spirit marriage have gained new energy now that a former Spirit exec is at the head of Frontier and Spirit's new CEO was running AirTran when it merged with Southwest in 2010. There haven't really been any recent rumors about a deal between Hawaiian Airlines and JetBlue, but it does seem like a match that could work. 2003 - Acquired OceanAir and VIP Ecuador. Senator Elizabeth Warren, the Massachusetts Democrat, is another skeptic. JetBlue and Spirit Airlines announced Thursday they have reached an agreement on a merger that would create the fifth largest airline in the U.S. This summer, flying Southwest Airlines has been a toxic mix of canceled flights, long delays and disgruntled pilots and flight attendants. JetBlue operates two models of aircraft already. Concerns over new strains of the coronavirus have amplified the concerns on travel demand. Would make more sense than any other merger. However, in the fourth quarter Spirit posted revenues 1.8 percent higher than in 2019 at $988 million; Frontier revenues were down 7 percent year-over-two-years to $609 million. But to Beckers point, some airline executives with the better balance sheets and stomachs of steel may be the reason they have no choice but to strike now on a target. In an illustration of the industrys lopsided nature, Alaska Airlines, the fifth-largest carrier last year, controlled just 5 percent of the domestic air travel market, while United, the fourth biggest, had nearly 13 percent. Why a merger doesn't make senseHistorically, one of Southwest's main tools for keeping costs down has been operating a single fleet type: the Boeing 737. It is common for some problems to be reported throughout the day. We're not sure if what is being reported in the Journal article is correct or it is just a slow news day in civil aviation. But Spirits ultracheap fares may not survive because JetBlue tends to cater to more affluent travelers and has been expanding premium services like business-class seats. (Photo by Mark RALSTON / AFP) (Photo credit should read MARK RALSTON/AFP/Getty Images), JetBlue Mint Pop-Up Experience at The Grove on June 12, 2014 in Los Angeles, California. Now They Are Suing United. Please don't sabotage your own union's efforts on your behalf. The Companys most targeted sectors include airlines (75%) and aerospace (25%). Airline merger rumors buzzing in 2021 With business airline travel down 85 percent in 2020, airlines across the board. Highest passenger count of an airline in the USA. The combo would, in one fell swoop, catapult Southwest to a strong market-leading position domestically, strengthen its network in the Northeast and to the Caribbean and Latin America, and provide it with an Airbus fleet and robust order book that would diversify its all-Boeing 737 fleet. This is not the first time JetBlue has tried to grow by acquiring another airline. Seems like an awfully expensive way to solve what their management should hope is a shorter-term issue. Smaller airlines could be the next to merge. The airlines reported $117 million and $473 million net losses, respectively, in 2021 on Monday. The Flight Attendants & Pilots unions, wouldnt allow it to happen. Alison Brown could just predict this for me so I know which one of my favorite be going and Im just glad to be on the side and a man thank you moving forward positively! According to data from the TSA, December passenger demand declined 62.4% year-over-year, cited by Becker. The Southwest Changes and Cancellations Hub is where you will find answers and information on refunds, overbooking, and flight credits. Not sure anyone would or should pay it. That said, as Baker pointed out, Southwest's lack of fees and expanding that practice to JetBlue could be looked at positively by the regulator. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Ask Doug Parker how much fun it was running a network with zero between Phoenix and Charlotte if you think hubs on coasts and zero between them work. But that does . Both deals present a new challenge to antitrust agencies, said Paul Denis, who represented US Airways in its merger with American Airlines, which closed in 2013. 2009 - Merged with TACA Airlines. Most international service gone? The rival bids for Spirit from Frontier and JetBlue could create an airline that presents a more formidable challenge to American, Delta, Southwest and United. The airline was the largest U.S. operator of the type with 34 aircraft when it was grounded in March and has not taken delivery of a single new aircraft since then. Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Gaining pricing power over Spirit helps SWA and increases profitability, growth, etc.
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