ashill

Umm, the DL/VS relationship is not a merger and acquisition, it's a joint venture with a minority ownership stake. Airline joint ventures are completely different and exist only because of foreign ownership laws (meaning airlines in different countries -- with a handful of exceptions like the EU/EEC and Australia/New Zealand -- can't merge). I think there's no chance of the DOT approving a joint venture between two US airlines (except maybe as part of an international joint venture -- before they merged, CO and UA were in a joint venture with LH and AC, but CO and UA still competed domestically and on other international routes). The anticompetitive effect of a domestic joint venture would be essentially identical to a merger; reduced competition. I see no reason why either the DOT would approve a joint venture when they wouldn't approve a merger or why two domestic airlines would prefer a joint venture to a merger.

I agree that it is highly likely that DL will enter more joint ventures with foreign airlines in the future. And if foreign ownership laws change, it's possible that there will be mergers with overseas airlines (but that's a gigantic if). However, I certainly hope that none of the big four will be allowed to merge with or purchase any domestic airlines with the exception of regional carriers that don't market their own flights and airlines that are imminently going out of business (not just Chapter 11), and even that latter case should be subject to anti-trust scrutiny and likely divestiture of some assets.

GRALISTAIR

Or purchase 49% of them or similar like they did with VS

EDIT: just saw -

^

Widgets

I don't know anything about VX except their safety music video and Richard Branson. If Delta just buys ~30% to complement Branson's legally limited ~20-25%, they could collude with majority ownership... within regulatory limits of course

readywhenyouare

If VX is sick then we should just let them die and then any other airline will be welcome to purchase assets. This is what we did for Pan Am, Eastern, etc. I would have preferred this to happen over the big mergers of the last decade. We should have just allowed a couple of unhealthy airlines to go under (US would definitely have been one of them) and that would have corrected he market.

BenA

I think VX is going to have a tough time finding a buyer. I agree with other posters that the legacies couldn't get a deal approved.

That leaves basically three potential bidders: AS, B6, and HA. B6 needs a west coast network, and VX might work for that - but they'd be better served by holding out for an AS merger. AS will likely sit on the sidelines and keep its options open.

That leaves HA - which actually would make some sense on a number of levels, but would commit them to a large mainland expansion. If they want to go that route and morph into something resembling AS, this is the easiest path, but it does carry a lot more competitive risk than the little niche they've carved out for themselves.

More likely, some failing regional carrier will try to absorb VX and go down in a flaming ball of glory the likes of which haven't been seen since Independence Air, though

BenA

On the other hand, if JetBlue and VX do merge, perhaps they can rebrand as Virgin Blue and get a killer deal on leftover c̶o̶c̶k̶t̶a̶i̶l̶ ̶n̶a̶p̶k̶i̶n̶s̶ ̶f̶r̶o̶m̶ ̶D̶H in-flight serviceware from DJ down under

ashill

A nitpick: US had record profits before the merger with AA, so it's very unlikely they would have gone under.

But I completely agree that DL, UA, AA, or WN should only be allowed to pick up VX assets in a Chapter 7 liquidation proceedings, not in a merger. If B6 (makes the most sense due to complementary route networks and compatible fleets), AS, or HA want to merge with VX now, have at it.



Though I suspect the Virgin Blue serviettes (don't call them napkins down under -- that's something else!) have all been used up; Virgin Australia was still using them for quite a while after the rebranding.

And since I'm nitpicking, they were DJ, not DH.

BenA

Ack! Fixed, thanks for the corrections. Had Independence Air on the brain and mangled airline codes...

tvnwz

I don't think a Delta purchase would be all that hard. VX is just not that big. Blip on the radar screen.

SJC ORD LDR

I think the other issue with VX is that they have very few assets. The only assets I can think of are their gates in DAL (which DL would love to get), and slots at DCA and NYC. Otherwise, pretty much everything else including the entire fleet of planes are leased.

lamont2718

DOJ would absolutely not allow DL (or AA or UA, for that matter) to acquire VX.

exwannabe

Why?

Virgin is tiny. DL + VX would still be smaller than AA.

They might have specific airport issues, but that would be handled by gate/slot divestitures.

Jeff767

Such a deal is prohibited under the current pilot working agreement. I suspect the pilots would strike before allowing any additional domestic outsourcing. The Alaskan code share was inherited from NWA and is hated by the pilots.

airplanegod

DOJ wouldn't allow it, and they have nothing in common other than routes and love of Dallas Love Field.

flyerCO

However one needs to remember the US merger before AA. America West bought out USAir, but decided to keep the USAIR name instead of America West. USAIR in bankruptcy or just outside of it when AW decided to buy out USAir.