With Trump at the helm you never know of course but I dont think the regulators want to let the big 4 get any bigger by gobbling up one of the larger remaining independents. 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. This chart shows a view of problem reports submitted in the past 24 hours compared to the typical volume of reports by time of day. Spirit has about 140 planes (all AirBus) with 100 320 neo orders and 50 options through 2027 thats a lot of growth potential. Thats because larger airlines have advantages. Spirit has not committed to either deal. Bigger airlines also get lower prices and better service from airplane manufacturers. 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. Source: Southwest Image Library. 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. Most international servicegone. By getting larger, any airline would be better able to spread out costs. Maintenance will be kept low because of the 737 aircraft and being able to swap out parts. Card Rating is based on the opinion of TPGs editors and is not influenced by the card issuer. Southwest has acquired in 4 different US states. Sun Country! However, DeNardi says that on Southwests October earnings call, CEO Kelly was surprisingly candid about plans to formally reconsider Southwest's single-fleet type strategy. DeNardi believes that Boeings woes materially increase the likelihood that Southwest diversify its fleet., Southwest Airlines Boeing 737 MAX aircraft are parked on the tarmac after being grounded, at the [+] Southern California Logistics Airport in Victorville, California on March 28, 2019. Not a chance in heck. Southwest was formed in 1967 and is based in Dallas, Texas. 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A position that many have rumors and many would not have thought possible. I simply cannot see it happening. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. The threat of such an acquisition could force an airline like #5 Alaska (6.4% share) to consider a JetBlue purchase or look for another partner. So now why Spirit? Then Republic took over. Becker has Market perform ratings on both United and JetBlue. This site does not include all credit card companies or all available credit card offers. Limited Time Offer: Earn 125,000 Bonus Marriott Bonvoy Points after you use your new Card to make $5,000 in purchases within the first 3 months of Card Membership. The buzz followed a report by Stifel analyst Joseph DeNardi diving into the feasibility of a Southwest-JetBlue tie-up. Is a Senior Aviation Business Reporter at The Points Guy. Shares of the Big Four airlines are down on average 36% over the past year, according to Yahoo Finance Premium data. You could see United Airlines buying JetBlue (JBLU). More likely is that WN goes out of the box and finds a way to lease previous gen 737s or hunt out a few that are on the market for sale to bridge the gap. Improve earnings, maximize rewards and track progress toward dream trips. Smaller airlines could be the next to merge. Thoughts? Aurora. "[Southwest] wants to be prepared for opportunities in what has historically been an opportunity-rich industry," DeNardi wrote. Since the industry was deregulated in the late 1970s, airlines have undergone successive waves of consolidation as they sought first regional, national and then international strength. are down on average 36% over the past year. Still, it's hardly a match made in heaven. 4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping. Could JetBlue be an answer to Southwests problems? The rules here have not changed, but the enforcement will now result in a 30 day ban from APC for violations. Frontier, Spirit Airlines complete $6.6 billion merger to become fifth-largest U.S. airline. They could very quickly repaint those planes and re do the cabins and absorb them into their system without much need to worry about what Sun Country used to be. Will miss the @united #globalfirstlounge at #ord. Rumors on Delta Airline pilot forums that Delta will be securing approx 25 717's from another carrier. DeNardi, however, is not the first to pose such a question. Alaska Air (ALK 1.14%), Hawaiian Airlines (HA 6.25%), and JetBlue (JBLU 2.73%) top the list of speculation (via Chicago Business Journal). Regarding JetBlue, acquiring them would have significant value for sure, but would be much more challenging. Best card for premium perks while traveling, Capital One Venture X Rewards Credit Card, The Business Platinum Card from American Express, Marriott Bonvoy Business American Express Card, Southwest unveils stunning new Hawaii-themed aircraft, How to redeem Chase Ultimate Rewards points for maximum value, IHG Rewards Premier Business card review: The annual fee is justified. The credit card offers that appear on the website are from credit card companies from which ThePointsGuy.com receives compensation. Were expecting M&A to occur. What happens when you acquire another airline is, for quite a while (4 or 5 years more if you want to slow roll it), both airlines operate under their separate brands. The Big Four in the airline industry long known as Delta ( DAL ), American Airlines ( AAL ), United Airlines ( UAL) and Southwest Airlines ( LUV) may look a little different at some. If Southwest bought JetBlue, it would not only remove the #6 US airline (JetBlue has 5.5% share ) from competition, Southwest would also become the largest US airline. Moreover, most airlines lack the cash on the balance sheet to do a splashy deal. I could see WN and Spirit before anything else. Second, Alaska's route network is heavily concentrated in Seattle, where it caters to a lot of business travelers. www.southwest.com. Whether Spirit ends up merging with Frontier or JetBlue, the combined company could pose a more formidable threat to the nation's four largest airlines American Airlines, Delta Air Lines,. JetBlue Airways this week made its own bid, of $3.6 billion, for Spirit, which said late Thursday night that it would consider the proposal. Sell side analysts and their version of click bait. Review: Lufthansa Business Lounge Athens (ATH), U.S. Tightens The Screws On Cuban Tourism, Southwest Airlines Technology Trouble Re-Emerges, Guessing JetBlues Next European Destination, Irrefutable Proof The JetBlue-Spirit Merger Hurts Consumers, Hyatt Acquisition of Mr. And Mrs. Smith Platform Aligns Well, Huge Frequent Flyer Programs Struggle At Freddie Awards, American Airlines First Class Passenger Dragged Off Plane After Demanding Pre-Departure Beverage. Enjoy Complimentary Marriott Bonvoy Gold Elite Status with your Card. That makes almost too much sense. It would be the first merger of large . 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. Mr. Denis said regulators examining airline deals had historically focused on the impact of combining large, legacy airlines those in business for decades. No, but we agree it increases with every month that Southwests growth ambitions remain neutered.". Southwest needs to diversify its fleet away from the 737," wrote Baker on Tuesday. United States, Cash is primarily being used to fund the losses being driven by the plunge in demand and high structural costs (see airplane maintenance, unionized employees, etc.). Third, one thing the AirTran merger showed us was Southwests distaste for operating multiple fleet types. Southwest will not be merging with Alaska Airlines There is really no real benefit for Southwest to do so. Especially to cure what really is a short term issue with the MAX. Apologizing to its passengers for its bad service, the . Also, with increasing competition for pilot hiring, bringing the pilots of Spirit over to SWA reduces the challenge of finding enough pilots over the next 6 or 7 years, at least. Downdetector only reports an incident when the number of problem reports is significantly . Problematically for Southwest, the eventual re-certification of the 737 MAX may not re-balance the current trajectory. Though it might make more sense for it to merge with a legacy carrier (and become its low-cost wing) than for two legacies to merge with each other, approval for a Southwest merger would be very difficult, if not impossible, because of the low-cost carrier's size. 2009 - Acquired AeroGal. The tentative agreement would have kept Southwest's flight attendants at the top of the industry in pay and benefits, according to the company. Southwest expected 44 MAX deliveries in 2019, 38 in 2020, 44 in 2021 and 41 in 2022, for a hoped-for growth of 3-5% annually, according to DeNardi. He says that JetBlue has approximately 15 A321neo deliveries scheduled annually through 2022. Keeping flight attendants and pilots on hand will be easy everybodys qualified. The real reason why Southwest CEO Gary Kelly is so eager to reach new labor contracts probably has. Would make more sense than any other merger. Potentially even doing the unthinkable: Adding Airbus to the fleet. Neither the U.S. Department of Transportation nor A4A maintains official records of airline M&A activity. alask Airlines has basically no debt paid off buying virgin thankfully before pandemic hit. Southwest aircraft taxiing in Ft. Lauderdale, Florida. Alaska and JetBlue merger talk is completely out to lunch. His scenario for a potential acquisition of JetBlue is based on valuation, a consensus view that JetBlue is under-earning, and the challenge of getting sufficient delivery slots at a backlogged Airbus organically over the next few years. With its recent Virgin America purchase, Alaska Airlines is now the fifth largest carrier in the country. reduce the dependence on Boeing). For the airlines that want it done right then RIGHT now is the time to work out brain damage of airlines coming together! If you want to talk mergers, lets talk about Alaska and JetBluenow there is a merger that seems possible. Alaskas fleet has a lot more in common with Southwest (mostly 737) than Jet Blue (all-Airbus). Excerpts and links may be used, provided that full and clear credit is given to Live and Let's Fly with appropriate and specific directions to the original content. 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. Lastly I strongly suspect this story is being driven more by analysts who love mergers and love pushing mergers than by anyone at Southwest themselves. Southwest Airlines Bets on New York LaGuardia Following Newark Exit, Southwests 737-700s Among Jets Sticking Around Longer Because of the MAX, Do Not Sell or Share My Personal Information. The U.S. Justice Department, which would have to approve such a deal, is likely to raise concerns on the impact to consumers from a merger. All told I suspect Alaska or Jet Blue would ask for a good premium on their value. Now They Are Suing United. Seems like an awfully expensive way to solve what their management should hope is a shorter-term issue. Unfortunately, Airbus has a backlog of 3200 aircraft to deliver. Southwest is great too its the greyhound in the sky no frills you pay for what you get-no expectation. From a network perspective, though, Alaska doesnt make a ton of sense since Southwest is pretty well-established on the West Coast and probably does not have a lot of interest in operating Alaskas large EAS intra-Alaska routes. Frontier Airlines has single cabins. 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. 2008 - Acquired Tampa Cargo. With either Alaska or JetBlue (and especially JetBlue) they would be buying a ton of different airplanes. From an operational perspective, it seems that Alaska would make more sense since they have a lot more Boeing aircraft. Not sure anyone would or should pay it. Thats what stopped it 10 years ago, there unions there unions dragged there feet over it so both parties walked. At the end of the day thats what this is all about Customer service people want to be treated like theyre special especially when theyre going on a special vacation or even a meetinglife events. I feel like Southwest does have red eyes flights. Matthew is an avid traveler who calls Los Angeles home. It has emerged that the airline, which is now the sixth largest in the United States, was trying to acquire Virgin America. Alaska and JetBlue would be a stronger force, as would American and Southwest. Allegiant Air. Second I tend to doubt that an Alaska or JetBlue acquisition would be allowed by the DOT. That's a strong incentive to stand pat, beyond the business issues that make a merger with Hawaiian Airlines, JetBlue, or Alaska Air suspect. Southwest had a 7% share in Boston and a 3% share in New York, the latter before it announced plans to pull out of Newark. The prospect of a hypothetical merger between Southwest Airlines and JetBlue Airways piqued the interest of aviation observers on Monday. The table is provided as a service rather than an authoritative source. Alaska Airlines does operate an all-737 fleet in its mainline operations. Concerns over new strains of the coronavirus have amplified the concerns on travel demand. But even this schedule change was before Boeings latest disastrous 737 MAX announcement. (Photo by FG/Bauer-Griffin/GC Images). Tie-6. Neither the U.S. Department of Transportation nor A4A maintains official records of airline M&A activity. Whatever challenges the D.O.J. I see their planes landing after midnight regularly at BOS. In addition, all airlines broke previous 52-week highs post merger something that would push JetBlue past its 2003 high of $30.00, or a 44% upside from yesterday's closing price if it followed . 2014 - Acquired AeroUnion, which continues to operate as a separate airline. 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. Those three airlines have a 3% market share, maybe a little more now since they are so domestic. That mindset has just been proven false with Alaska Airline's acquisition of Virgin America. 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). Thus, Southwest will merge or acquire another carrier in order to stem the flow to its competition. And while Spirit and JetBlue have some overlap, for example in similar fleets of planes, they operate differently. Alaska is not a fan of Airbus with exception of A321. Alaska Air is also a 737 operator, but that doesn't make it a great merger partner for Southwest Airlines. Herb is probably twitching in his grave even hearing someone mention it! First of all, Alaska has a fairly extensive regional operation, with turboprop flights operated by its own regional subsidiary (Horizon Air) and regional jet flights that are contracted out. Some legal experts said that either deal could win the backing of regulators with some compromises like an agreement to divest gates at some airports. A combined Southwest and JetBlue would have a solid 25% share of U.S. domestic traffic, based on DOT data for 2018. To make the world smarter, happier, and richer. Dallas, Texas The perfect @flysas name tag for #Longyearben! I still think that at the end of the day, either deal that could possibly be challenged would likely be approved, said Kerry Tan, an economics professor at Loyola University Maryland. Please don't sabotage your own union's efforts on your behalf. As a best-case scenario, airlines this year are facing a low-demand first half followed by a potentially swift recovery at least of leisure business in the second half, dependent on an effective vaccine rollout. In addition, Frontier and Spirit have been criticized for poor customer service, and Phil Weiser, the attorney general of Colorado, where Frontier is based, warned federal regulators last month that the merger creates a real and pressing risk that service could worsen if the two companies merged. However, this deal would likely not go forward until Frontier goes public, something that is in the works but has not yet taken place. The Flight Attendants & Pilots unions, wouldnt allow it to happen. It would be an upgrade for Spirits current customers as well. JetBlue executives said this week that they intended to continue the companys partnership with American in the Northeast. PO Box 36611, Until you achieve FAA approval for single operating certificate, nothing really has to change unless you want it to. However the merger rumors play out in the weeks and months to come, Southwest flight attendants are planning to get back to the negotiating table, perhaps as early as mid-August, sources indicated. They also said that buying Spirit would allow JetBlue to compete more aggressively with the four big airlines. Regulators would probably never approve a merger between, say, United and Delta. Southwest Airlines outages reported in the last 24 hours. Southwest grew tremendously internationally after acquiring AirTran. Check here before booking an award fare. That would be a more reasonably sized candidate than AS or B6. Consider the Alaska/Virgin American merger or Southwest/AirTran. No other airline comes close. 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. Mergers and Acquisitions Facts, rumors, and conjecture New Thread Subscribe Page 1 of 20 1 2 3 4 5 11 > CANADA (FR), Last updated: 4:30 PM ET, Wed April 6, 2016. And while an acquisition of JetBlue may not be the answer, DeNardi is right that airlines like Southwest will need to think out of the box to grow, even as the 737 MAX mess continues to fester. Southwest has acquired in 4 different US states. We have been contacted by major union legal teams regarding this issue. The International Air Transport Association (IATA) said last November the airline industry will lose $157 billion in 2020 and 2021. Most international service gone? Fearing this, Stifel, a major investment banking firm, downgraded Southwest yesterday with the following warning: An acquisition by Southwest motivated by a desire to diversify away from the Max creates significant risks in the near term for LUV. Not too many people would miss Sun Country and its planes fit. We built Mergr to save people the arduous and time-consuming process of tracking when companies are bought, sold, and who currently owns them. For example, last summer Southwest dropped service to Newark (EWR) and 9 million New Jersey residents, citing the continued grounding of the MAX. For such reasons, a deal is unlikely to happen. AirTran flew off into the sunset last December. A combined Southwest and JetBlue would have a solid 25% share of U.S. domestic traffic, based on DOT data for 2018. Airline acquisition stories are always intriguing, like the perpetual rumor that Warren Buffett would buy Southwest (he does own about 10.2%.) They want to know how a proposed merger affects travelers, including whether the combined company will be able to significantly raise fares on routes where the two companies previously competed head-to-head. The rules here have not changed, but the enforcement will now result in a 30 day ban from APC for violations. Rumors that, if correct, could dramatically change the playing field in Hawaii travel. The idea that Southwest would merge with JetBlue or Alaska is fanciful at best and delusional at worst. It is the only known comprehensive, centralized, publicly available source. The union says the merger will also create more competition against four airlines that currently occupy 81% of the aviation industry, American, Delta, Southwest and United. The merger, valued at $6.6 billion, would create the fifth-largest U.S. airline carrier and is slated to close in the second half of 2022. Opinions expressed here are the authors alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities. With no end in sight to the grounding and other airlines like Delta (which has none) and United (which has a more agile fleet) stepping into fill the void, Southwest is losing market share. Southwest is the #3 US airline by marketshare. At some point, that risk becomes strategically unacceptable to Southwest. As such, we cannot verify the accuracy of each individual entry. Southwest paid $1.4 billion for AirTran. Alaskas network complements Southwest in the Pacific Northwest and California more than Jet Blues tiny little hub in Long Beach + hubs on the other coast. The Big Four in the airline industry long known as Delta (DAL), American Airlines (AAL), United Airlines (UAL) and Southwest Airlines (LUV) may look a little different at some point this year as executives pull the trigger on mergers to consolidate costs as the slog from the depths of the pandemic stretches on. Our points-obsessed staff uses a plethora of credit cards on a daily basis. Unless you like paying more and getting less, asking for less competitive airlines is a bad idea. When the dust settled on a big round of airline consolidation nearly a decade ago, four large companies came to dominate the industry. Southwest is a discount airline serving the US market. This summer, flying Southwest Airlines has been a toxic mix of canceled flights, long delays and disgruntled pilots and flight attendants. It is against the APC Forum Rules to advocate any labor action which is not authorized by the RLA/NMB. Experiencing Planet Positive Travel At Wakaya, Fiji's Most Luxurious Private Island, The Greek Island Glow With Virgin Voyages, American Queen Voyages Spring Savings Event. As the 737 MAX problems continue and Southwest is forced to cancel an increasing number of flights (as more deliveries are deferred), the financial implications grow. A total of 2 acquisitions came from private equity firms.It has also divested 1 asset.. Southwest's largest acquisition to date was in 2010, when it acquired AirTran Airways for $1.4B. The airlines reported $117 million and $473 million net losses, respectively, in 2021 on Monday. Boeing gathered hundreds of pilots and reporters to unveil the changes to the MCAS stall prevention system, which has been implicated in the crashes in Ethiopia and Indonesia, as part of a charm offensive to restore the company's reputation. Smaller operator, all 737. It would seem as if Southwest Airlines has a much stronger clientele base. As well, not put them in a position like this when a debacle happens with the aircraft type they are so heavily relying on. They would be a really terrific competitor to the Big Four because they are so low cost and their so domestic and leisure focused. Becker rates Allegiant (ALGT) at Market perform and Spirit (SAVE) at Outperform. This review, however, would explore whether there is a unique rivalry among the lower-cost carriers that is deserving of protection by the Justice Department. Please don't sabotage your own union's efforts on your behalf. It is the first merger of large U.S. airlines since. Making the world smarter, happier, and richer. United Airlines. And the easiest way to grow at many airports is to buy another airline that has gates and takeoff and landing slots. Rumors swirling again that Southwest is looking to merge or acquire Hawaiian Airlines as the company has announced internally that they are ceasing all hiring effective immediately. Except for one thing: AirTran's not completely folded in yet. JetBlue was looking for a merger as well. Spotted four #polarbear outside of #longyearbyen -, One of the best crews I have ever had the pleasure, Next stop ARN! Airline industry has a lot to ponder with what they just went through/pandemic. If Southwest is sick of waiting for the 737 MAX to be declared safe to fly, why not just order some planes from Boeings competitor? Southwest Airlines is profitable but has a growth problem created by the continued grounding of its 34 Boeing 737 MAX aircraft (of 310 on order). Integrating another airline via acquisition can be time-consuming and difficult. Most major airlines are in negotiations at this time, and many are contentious. 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. 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. This Southwest Airlines merger talk simply seems to be a case of the rumor mill run amok. 2003 - Acquired OceanAir and VIP Ecuador. Photo: The Motley Fool. Related:Southwests 737-700s Among Jets Sticking Around Longer Because of the MAX, "Southwest needs aircraft. It makes more . You'll earn 15 elite night credits each calendar year, and receive automatic Gold elite status. The Motley Fool has no position in any of the stocks mentioned. Is The White Lotus breaking up with Four Seasons ahead of Season 3? The last round of consolidation really was about balance sheets, he said. Invest better with The Motley Fool. United Airlines Fires Six Senior Flight Attendants For Bullying Junior Flight Attendant. brilliant suggestion. The largest A320NEO order in the world under parent company Indigo Partners. Do you see any possibility of merger between Southwest and Alaska or JetBlue? Southwest has performed multiple mergers in the past, most recently with AirTran, whose service model wasnt that much different from Alaskas- regional carrier having to be an LCC because Delta was a big force in one of their markets, competitive with Southwest elsewhere, had a first class cabin. Added Becker, You can see Allegiant, Frontier and Spirit merge. For example, executives from Southwest visited Airbus to check out the A220 as early as April, reported The Air Current. Though Virgin was a relatively small airline, Alaska probably won't be making any other acquisitions in the near future. Analysts speculated that JetBlue made its offer in part because it feared losing business to a combined Frontier-Spirit, which the airline cited as a potential risk to its competitiveness in its annual report.
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