Please. God. No.

I want VX to expand naturally as the legacies shrink themselves to extinction. Agree that buying assets (planes, routes, etc) at a discount could be an opportunity, but wholesale acquisition does not strike me as a smart strategic move.

F9 BK info
 

For those who don't live in DEN or check the F9 boards. The BK was caused by FirstData changing the credit card processing terms overnight from paying F9 70% of the fare upon purchase to 0%. F9 would only get paid when the pax took the flight. Is F9's burn rate higher than other carriers? Yes. Is F9 that much in trouble to where VX could try a takeover? No. They still have cash in the bank and in BK. A little info on FirstData is that it is jointly owned by Chase and Barclays. I think Barclays is the minor (49%) but Barclays does have outstanding debt with F9 (either #1 or #2 largest creditor). I believe that this was Barclays and Chase making a run on F9 to cause a debt default and Barclays getting F9 assets on the cheap. F9 owns a considerable number of it's planes so there isn't a long list of debtors compared to other carriers. FirstData was forced to back off their processing terms in a settlement and F9 will probably stay in BK until fuel becomes more reasonable. Survival will depend solely on the fuel prices.

F9 and B6 were considering a merger or code share at one time but B6 flies routes with a lot of competition where as F9 has less. F9 does have reciprocity with AirTran (AT) but there isn't much overlap between the two carriers. A VX reciprocity would make sense as F9 has had issues breaking into the West Coast market and give VX pax access to Mexico & Costa Rica via F9.

According to F9's last SEC filing (unaudited and extrapolated from previous data to some extent), they had an operating loss of $12.3 million during just the 20 days between April 11 and April 30. They had about $100 million in cash and cash equivalents on hand. Net loss for the 20 day period was $16.5 mil. Also, "liabilities subject to compromise includes trade accounts payable related to pre-petition purchases, some of which was scheduled for payment in the April 11 to April 30 period. As a result, the April 11 through April 30 cash flows from operations were favorably affected by the stay of payment related to these accounts payable."

The last filing was for Q4 07, which showed $170 mil in cash/equivalents, an operating loss of $25.6 mil for the three month period and a net loss of $32.5 mil. So, despite the efforts to vindicate the CC processor, it certainly doesn't appear that F9 was doing all that well prior to filing for Ch.11

As for competition, Southwest has been seriously ramping up service in Denver, with more new flights starting within the past 6 weeks. It's going to be almost impossible for F9 to fend off WN with its lower cost structure. The only major US airline that actually has a lower cost structure than WN is B6.

Wow. That's seriously bleeding cash like a stuck pig.