You're pretty far onto the "kool aid" scale when folks start arguing that it was a good thing a company put the one you were working for out of business.
Obviously, if you were lucky enough to be hired by Southwest, it could be true. Sometimes you lose a job and get a better one. But the reason WN structured the deal as they did was because they didn't want to hire most of ATA's employees (as opposed to the way HP had structured their offer). So the vast majority of ATA employees were obviously not better off that WN won the bidding and "put ATA out of business."
You're pretty far onto the "kool aid" scale when folks start arguing that it was a good thing a company put the one you were working for out of business.
Obviously, if you were lucky enough to be hired by Southwest, it could be true. Sometimes you lose a job and get a better one. But the reason WN structured the deal as they did was because they didn't want to hire most of ATA's employees (as opposed to the way HP had structured their offer). So the vast majority of ATA employees were obviously not better off that WN won the bidding and "put ATA out of business."
I'm coming from a place of knowledge on the topic. You're not. Simple as that.
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Last edited by num1bearsfan; Dec 26, 08 at 7:38 pm.
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Quote:
Originally Posted by num1bearsfan
All the ones I know do, and your link doesn't work.
Sorry about the link, here is the relevant text from an article written in the Indianapolis Business Journal published on Dec 1, 2008 (apparently the article is too old to link).
Quote:
Southwest Airlines first swooped in as the apparent savior of ATA Airlines four years ago, giving the bankrupt Indianapolis carrier a much-needed $117 million in return for its valuable gates at Chicago Midway Airport.The Dallas-based carrier paid ATA tens of millions of dollars more in the years to follow when ATA flew its passengers places Southwest didn't, such as New York's LaGuardia Airport.
But in the end, Southwest appears to be playing the vulture, striking a deal to acquire those valuable landing slots at LaGuardia and most of ATA's remaining assets for $7.5 million.
A hearing to approve the sale is set for Dec. 2 in U.S. District Bankruptcy Court in Indianapolis, where ATA landed in bankruptcy for the second and final time in April of this year. Southwest is likely to prevail barring a last-minute offer from another carrier or legal complications.
"Southwest is getting a terrific deal. Those [14] slots are probably worth $1 million apiece," said Don Wurster, a former ATA first officer who represents the interests of former ATA pilots as a member of the Air Line Pilots Association.
The deal struck by Southwest is effectively the last nail in the coffin for ATA, which was the nation's 10th-largest passenger carrier until it began shedding routes to stay alive in 2005.
ALPA said much of the route reduction was to placate Southwest, which entered into a code-sharing arrangement with ATA.
"They came in as our partner, and our friend, and immediately we went into a reduction mode, a regressive state where we vacated routes," Wurster said.
Over the last several months, suspicions some pilots had of Southwest's playing the vulture role from the start have been steeled.
"This Texas airline acted in bad faith for the past several years to steal ATA Airlines from the employees who proudly built the company brick by brick," one former ATA pilot wrote in a recent e-mail.
What stoked those suspicions was Southwest's recent announcement that it had named former ATA chief executive and chairman John Denison to its board.
Denison had been retired from Southwest as its chief financial officer when he took control of ATA during the first bankruptcy filing. At the time, Denison publicly shrugged off the appointment as something to keep him busy after retirement.
ALPA is dubious.
"I was struck by the coincidental nature of Denison joining the Southwest board the day after they filed for the ATA slots," said Rusty Ayers, an ALPA spokesman in Chicago.
Wurster compared Denison to a "Trojan horse" for Southwest, allowing the Dallas carrier to gain valuable insight into ATA's cost structure and learn from its experience in markets where Southwest didn't operate.
In November, The Wall Street Journal noted that Southwest, which for years focused on airports where it could make quick turnarounds between takeoffs and landings, learned about delay patterns at LaGuardia through its ATA partnership.
Some former ATA pilots see Southwest as behind ATA's sudden decision to shutter the company and file for bankruptcy...
bearsfan, you're not being very logical here. Obviously you're affiliated with WN and obviously you love your job. However, you can't speak for the entire WN workforce and you especially can't speak for employees of ATA who lost their jobs.
I think you need to accept that Southwest has faults and understand that it's practices are not necesserily always the best. Sometimes these practices affect the airline employees, such as those from ATA that lost their jobs. Sometimes these practices affect the shareholders (fuel hedging and/or lack of aggressiveness).
In any case, we should probably get back on topic. Is Kelley really the problem? Personally, I'm not so sure. Seems to me like he himself is in the mold of Herb and the southwest old guard. I'm not sure anyone would have done it differently. I mean, it was one of the reasons why Neeleman was let go from Southwest when Morris Air got bought out. Southwest is simply NOT a forward thinker and I think southwest has to hit some hard times before they realize that inovation and/or breaking with the model is the way to go, sometimes.
But the reason WN structured the deal as they did was because they didn't want to hire most of ATA's employees (as opposed to the way HP had structured their offer). So the vast majority of ATA employees were obviously not better off that WN won the bidding and "put ATA out of business."
You seem to be mixing bankruptcies. HP doesn't exist to participate in the current bankruptcy, and they offered no bid in TZ's first.
You seem to be mixing bankruptcies. HP doesn't exist to participate in the current bankruptcy, and they offered no bid in TZ's first.
He was comparing the two, not saying that HP actually made a bid. His point was that WN could have well made an offer in the style of HP and hired all of the employees, etc. but instead chose to acquire some of the assets and put ATA employees out on the streets. The moral of the story being that it's not very nice of southwest to do something like that.
Now, he wasn't trying to argue that southwest should have done that, but that the kool-aid drinkers need to realize southwest isn't godly and does things that aren't always great.
I think originally this argument was somehow related to the fact that Kelley could have bought out HP and WN could have owned PHX and that Kelley was shortsighted not to simply because of WN's ideology of not buy and eliminate (competition).
His point was that WN could have well made an offer in the style of HP and hired all of the employees, etc. but instead chose to acquire some of the assets and put ATA employees out on the streets.
And again, both of you are missing the point that TZ's bankruptcy back in April put its employees out on the streets as it shut down all operations at that time. WN had nothing to do with that, and its asset bid this month has nothing to do with that.
And again, both of you are missing the point that TZ's bankruptcy back in April put its employees out on the streets as it shut down all operations at that time. WN had nothing to do with that, and its asset bid this month has nothing to do with that.
I didn't say anything about my position on the deal. I was only restating his argument in simpler terms.
But if you're going to drag me into this, let me point out that the article he put out specifically talks about southwest's dance with ATA 4 years ago and its choice to take MDW slots and hire a limited number of those employees leaving a shell of an airline with almost no chance of surviving. Presumably, southwest could have bought out ATA which would have saved those people down the road.
Again, I'm merely repeating/restating what's been said because the kool-aid drinkers seem to overlook a lot of the facts about Southwests interaction with ATA.
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At the time the ATA partnership was announced, it was clear to everyone that Southwest was interested first and foremost in the MDW gates. The code share was the price of acquiring the gates. Southwest would not have contemplated a code share without a major sweetener. But even the gates were not enough sweetener for a full merger.
for 2009 and 2010. Quite a turnaround from the past 2 years -- when all the other airlines had this enormous financial headwind, and WN had a great tailwind. I've always said WN's hedging was more luck than skill, and now it looks like the luck has run out. How Kelly manages this difficult time for the airline will perhaps determine whether he is ultimately viewed as a hero or a goat.
Back to original topic (which didn't cover ATA) - I think WN will look good in hindsight. Oil prices have probably bottomed out - they tend to overshoot in both directions. When the world economy picks up sometime later this year, demand and prices will go thru the roof. And then WN will look smart. Wall Street tends to be too focused on quarterly #s, the smart execs have longer term vision.
When the world economy picks up sometime later this year, demand and prices will go thru the roof. And then WN will look smart.
I thought WN had unwound a large portion of their hedging positions in order to mitigate liquidity risks? I wouldn't be surprised if they start building hedge positions again but the trouble with that is the oil futures curve is a bit steep right now. Though oil is in the $30s, I'm not sure that anyone is able to lock in fuel prices at these levels.
Even when hedging becomes more attractive, it will become more attractive for all airlines at once and I would be surprised if WN is able to recreate the hedging edge it had for most of this decade. The fuel playing field has been leveled so WN will need to rely on other aspects of its business model to compete.
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Quote:
Originally Posted by Boraxo
Back to original topic (which didn't cover ATA) - I think WN will look good in hindsight. Oil prices have probably bottomed out - they tend to overshoot in both directions. When the world economy picks up sometime later this year, demand and prices will go thru the roof. And then WN will look smart. Wall Street tends to be too focused on quarterly #s, the smart execs have longer term vision.
As you wrote this comment at 10:59pm Central time on 12/31/08, I suppose the economy picked up within a few hours.
Guess New Year Eve party was a late start for you.
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Quote:
Originally Posted by iahphx
It's funny because absent their oil plays (which were WAY too aggressive), I think they manage the business too conservatively.
Quote:
None of this probably matters much to their customers, but the failure to act has cost shareholders billions.
Their management direction is the only one but AA that has not destroyed all shareholder value in bankruptcy court. I'll take that versus anyone else.
Relative to their peers (and with more than a day-trader's timeline), WN is the only airline that can be trusted not to arbitrarily destroy shareholder value.
You must be aware of (or ignoring) the fact that WN has, for some time, put employees first, customers second, and shareholders third (on the thoery that happy employees make for happy customers which makes for happy shareholders). That model has consistently beat every other domestic airline issue.
