SWA's FAs Ponder CEO Gary Kelly's Next Move

Old Jul 29, 2015, 1:12 pm
  #16  
 
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Originally Posted by rsteinmetz70112
I'm not sure the board disagreed with my analysis.

The fact that the offer was above market price and took away risk of future economic uncertainty was in their favor. I think the Airtran Board did the right thing for their shareholders. I'm not sure Gary Kelly did the right thing for his.

Without a doubt Airtran customers suffered.
I was just a victim of this, a 20 year stint down the drain because someone else came along a offered a few dollars over current market, taking advantage of a temporary downturn. Once an offer is made above market, its really hard for a Board to ultimately turn it down (after the usual posturing to get a little more). They have to act in the best interests of Shareholders (and often they are heavily invested themselves) otherwise be slammed with suits. Employees, customers and the long term outlook/benefits/share price be damned...
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Old Jul 29, 2015, 8:40 pm
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Originally Posted by steved5480
"....Chief among them is the possibility Southwest Airlines and its CEO Gary Kelly could be contemplating another merger in the not too distant future.
Without Pilot and FA contracts that IMO would be allowing both groups to shoot for the sky and likely get it.

Nothing here IMO.
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Old Jul 30, 2015, 8:11 am
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BTW - If there is an acquisition, its Sun Country. Jet Blue and Alaska are to big and to different. SY just pulled put of LAN, has some awesome Caribbean destinations, and a pile of 737s.
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Old Jul 30, 2015, 10:34 am
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Originally Posted by returnoftheyeti
BTW - If there is an acquisition, its Sun Country. Jet Blue and Alaska are to big and to different. SY just pulled put of LAN, has some awesome Caribbean destinations, and a pile of 737s.
That's interesting. Looks like the pilots would be in favor of it.
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Old Jul 30, 2015, 9:43 pm
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Originally Posted by returnoftheyeti
BTW - If there is an acquisition, its Sun Country. Jet Blue and Alaska are to big and to different. SY just pulled put of LAN, has some awesome Caribbean destinations, and a pile of 737s.
Interesting but some duplication of routes.

WestJet OTOH would open up Canada and a ton of Carribean destinations with little duplication.

Yes they have an RJ operation but it's WestJet held which creates boundaries for Pilots. Not outsourced in any way.

And they apparently operate three 767s... Which those alone could fly HI and fly a lot more air freight

But I to admit I haven't been following currency between Canadian Loonies vs USD. If it's not favorable that increases the cost.

Last edited by traveller001; Jul 30, 2015 at 10:30 pm
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Old Jul 31, 2015, 6:56 am
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Originally Posted by traveller001
Interesting but some duplication of routes.

WestJet OTOH would open up Canada and a ton of Carribean destinations with little duplication.

Yes they have an RJ operation but it's WestJet held which creates boundaries for Pilots. Not outsourced in any way.

And they apparently operate three 767s... Which those alone could fly HI and fly a lot more air freight

But I to admit I haven't been following currency between Canadian Loonies vs USD. If it's not favorable that increases the cost.
A foreign airline cannot have a majority stake in a Canadian based airline. It maxes at 25% or 49% I believe.
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Old Jul 31, 2015, 8:40 am
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Originally Posted by traveller001
Interesting but some duplication of routes.
I don't think duplication would matter. What would matter is the ability to fly to more International destinations and the 21 737-700s and -800s

The Current Owner if a counter-top company, owned by a dairy products company, sort of odd bedfellows.

In July 2011, Cambria purchased Sun Country Airlines out of bankruptcy for $34 million after the collapse of the Ponzi scheme of Tom Petters and Petters Group Worldwide, the former owner of the airline.
There is also a long running labor negotiation with the Pilots and the current management.

Back in May:

The board of directors of Sun Country Airlines (SY, Minneapolis/St. Paul) has told its pilot union that the airline is heading for its 'ultimate shut-down' after neither party was able to reach a consensus regarding a revised Collective Labour Agreement (CLA).
Seems like a sale to Southwest would solve all of these problems. Southwest would get more planes and more pilots. The pilots would get more money under the current Southwest CBA and the current owner could make a nice profit.
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Old Jul 31, 2015, 12:24 pm
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Originally Posted by returnoftheyeti
You can't take a 737 from HNL to SYD...
Actually you can. Fiji Airways flies HNL-CXI (Christmas Island/Kiritimati)-NAN. You can then connect to a 737 flight to SYD, MEL, BNE, AKL etc.
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Old Jul 31, 2015, 4:11 pm
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Originally Posted by rsteinmetz70112
Seems like a sale to Southwest would solve all of these problems. Southwest would get more planes and more pilots. The pilots would get more money under the current Southwest CBA and the current owner could make a nice profit.
Labor cooperation is essential for any merger - it helped Parker steal AA during Chapter 11 proceedings, continues to cause all kinds of grief for Smisek, forcing pmUA and pmCO to continue operating as separate entities. Like Parker, Kelly would have to play Santa Claus to make everyone happy.

A better (but not likely) explanation for not agreeing to competitive contracts is if Kelly is trying to SELL LUV - make the numbers look as attractive as possible to extract maximum value. Perhaps Branson has several billion burning a hole in his pocket, partnership with DL has not work as he hoped, VA is not growing fast enough for him. I consider AS to be a better run, more customer friendly carrier than WN, would rather see Tilden send Kelly sailing in to the sunset on his golden parachute.
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Old Jul 31, 2015, 4:14 pm
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With the DOJ on an airline antitrust witch hunt, the LAST thing they will allow is another airline merger. Any such talk will have to wait until the next economic downturn, when airline CEOs can plead poverty, "too big to fail".
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Old Jul 31, 2015, 5:17 pm
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Originally Posted by diver858
Labor cooperation is essential for any merger - it helped Parker steal AA during Chapter 11 proceedings, continues to cause all kinds of grief for Smisek, forcing pmUA and pmCO to continue operating as separate entities. Like Parker, Kelly would have to play Santa Claus to make everyone happy.

A better (but not likely) explanation for not agreeing to competitive contracts is if Kelly is trying to SELL LUV - make the numbers look as attractive as possible to extract maximum value. Perhaps Branson has several billion burning a hole in his pocket, partnership with DL has not work as he hoped, VA is not growing fast enough for him. I consider AS to be a better run, more customer friendly carrier than WN, would rather see Tilden send Kelly sailing in to the sunset on his golden parachute.
BOLDED: Do you have a source for that statement?
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Old Jul 31, 2015, 6:38 pm
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Originally Posted by diver858
Labor cooperation is essential for any merger - it helped Parker steal AA during Chapter 11 proceedings, continues to cause all kinds of grief for Smisek, forcing pmUA and pmCO to continue operating as separate entities. Like Parker, Kelly would have to play Santa Claus to make everyone happy.

A better (but not likely) explanation for not agreeing to competitive contracts is if Kelly is trying to SELL LUV - make the numbers look as attractive as possible to extract maximum value. Perhaps Branson has several billion burning a hole in his pocket, partnership with DL has not work as he hoped, VA is not growing fast enough for him. I consider AS to be a better run, more customer friendly carrier than WN, would rather see Tilden send Kelly sailing in to the sunset on his golden parachute.
Huh?
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Old Jul 31, 2015, 6:40 pm
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Originally Posted by diver858
With the DOJ on an airline antitrust witch hunt, the LAST thing they will allow is another airline merger. Any such talk will have to wait until the next economic downturn, when airline CEOs can plead poverty, "too big to fail".
I doubt even DoJ could make much of a case that Southwest with nearly 700 planes would affect the market much by buying an airline with 21.
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Old Jul 31, 2015, 8:23 pm
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Originally Posted by rsteinmetz70112
Huh?
Management attempts to minimize costs, maximize revenues when looking to SELL a company, not buy another.
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Old Jul 31, 2015, 8:31 pm
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Originally Posted by rsteinmetz70112
I doubt even DoJ could make much of a case that Southwest with nearly 700 planes would affect the market much by buying an airline with 21.
Not a function of the number of aircraft, but extent to which merger will reduce competition or service, particularly to smaller communities. There is a fair amount of overlap in route maps, the AA/US DOJ settlement required divestiture of gates at specific airports, promise not to eliminate current hubs for a period of time, etc.

Congress, general public believe the 4 major airlines (which includes WN) are gouging the public, further acquisitions will play in to this narrative.
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