Is NW YX's Secret Santa?
Jul 31, 2007, 10:20 am
#1
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Is NW YX's Secret Santa?
According to Midwest Airlines, the YX board has formed a committee to discuss possible acquisition by Air Tran or another potential suitor. The other potyential suitors aren't being named but NW is the #2 carrier at MKE and has almost no overlapping routes. NW could operate YX as a free-standing subsidiary and is already working out codeshares.
Jul 31, 2007, 10:25 am
#2
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Interesting idea, but I am not sure what, if anything, NW would acquire in this merger. If you look at what NW really needs they are 1. a western hub 2. Additional international service to Central and South America 3. Additional TATL service to replace potential loss of KLM at some point. I don't see how NW picks up any of these by buying YX.
Jul 31, 2007, 10:33 am
#3
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Jul 31, 2007, 10:38 am
#4
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Jul 31, 2007, 10:46 am
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Jul 31, 2007, 10:48 am
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Crazy thought: NW could buy YX, de-hub MKE, and move the assets of YX out to the west coast, say PDX/SEA where they have a decent presence and establish a mini-west coast operation with conduits back to MSP and/or MKE and/or DTW for connecting passengers, shuttling aircraft around, etc. The YX fleet is fairly well consolidated, and the MD-80/81/88s and 717s should be fairly easy to integrate with DC-9 maintenance.
Jul 31, 2007, 10:50 am
#7
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Crazy thought: NW could buy YX, de-hub MKE, and move the assets of YX out to the west coast, say PDX/SEA where they have a decent presence and establish a mini-west coast operation with conduits back to MSP and/or MKE and/or DTW for connecting passengers, shuttling aircraft around, etc. The YX fleet is fairly well consolidated, and the MD-80/81/88s and 717s should be fairly easy to integrate with DC-9 maintenance.
I suppose the West Coast market is overly saturated as it is? Or is there some room for growth?
Jul 31, 2007, 10:55 am
#8
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Nah, I think NW would be smart to leave YX as it as and run it essentially as a standalone subsidiary.
If NW acquires YX, there are almost no overlapping routes. It would give NW three-fourths market share at MKE. It allows NW to run a real mini-hub at MKE. NW doesn't have to do much but let YX alone and interface schedules. NW would continue the YX service and amenities and thus please the local customers. Community response would likely be favorable as it would be in NW's best interests to continue YX pretty much as it is plus the locals would likely favor the devil they know (NW) vs. the one they don't.
This would be a real win-win for NW.
If NW acquires YX, there are almost no overlapping routes. It would give NW three-fourths market share at MKE. It allows NW to run a real mini-hub at MKE. NW doesn't have to do much but let YX alone and interface schedules. NW would continue the YX service and amenities and thus please the local customers. Community response would likely be favorable as it would be in NW's best interests to continue YX pretty much as it is plus the locals would likely favor the devil they know (NW) vs. the one they don't.
This would be a real win-win for NW.
Jul 31, 2007, 10:56 am
#9
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They can have a fit all they want, but the current code-sharing agreement doesn't satisfy enough of NW's needs on the West Coast. I think there is room for growth out there as well as room for competition.
Jul 31, 2007, 10:57 am
#10
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If NW acquired YX (big if), they'd be better off scrapping the M80s as quickly as possible and using the 717s to build non-hub service out of DCA, LGA or other high-yield, O&D rich destinations.
Jul 31, 2007, 11:06 am
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But then again we have Delta who has committed to growth on the West Coast. How does that add to your analysis? Just curious.
Jul 31, 2007, 11:11 am
#12
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I would have said all the routes are overlapping, with a connection though MSP or DTW. It's a high concentration of monopoly pricing power in the midwest
Anti-trust concerns put the kibosh on Delta/US merger. Although I do agree that NW wants an acquisition and wants to protect its midwestern markets by limiting competition.
Tthe last thing NW wants is an Air Tran/Midwest merger.
Anti-trust concerns put the kibosh on Delta/US merger. Although I do agree that NW wants an acquisition and wants to protect its midwestern markets by limiting competition.
Tthe last thing NW wants is an Air Tran/Midwest merger.
Jul 31, 2007, 11:13 am
#13
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^ There you go!
It's like having Katie Couric on the CBS News. Whether it works out or not, CBS took a chunk out of NBC's Today show viewership. If things eventually turn around for her on the Evening News, then it's a two-fer!
David
It's like having Katie Couric on the CBS News. Whether it works out or not, CBS took a chunk out of NBC's Today show viewership. If things eventually turn around for her on the Evening News, then it's a two-fer!
David
Jul 31, 2007, 11:43 am
#14
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NW would make a good deal:
-consolidate their midwest presence
and
- rejuvenate their fleet by acquiring a bunch of relatively new DC9S aircraft:
http://www.airfleets.net/ageflotte/M...20Airlines.htm
-consolidate their midwest presence
and
- rejuvenate their fleet by acquiring a bunch of relatively new DC9S aircraft:
http://www.airfleets.net/ageflotte/M...20Airlines.htm
Aircraft Type Number Age Rank for the age per each aircraft type
Boeing 717 25 3 years On 9 airlines operating this aircraft Midwest Airlines is number 1
McDonnell Douglas MD-80/90 11 24.8 years On 82 airlines operating this aircraft Midwest Airlines is number 73
Boeing 717 25 3 years On 9 airlines operating this aircraft Midwest Airlines is number 1
McDonnell Douglas MD-80/90 11 24.8 years On 82 airlines operating this aircraft Midwest Airlines is number 73
Jul 31, 2007, 12:00 pm
#15
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I was unaware of this commitment by Delta and thus am unaware of their plans and goals. I would have to know this before updating my analysis. Care to fill me in?
