(Full disclosure: I own stock in Southwest Airlines, American Airlines and Jet Blue.). Thus, Southwest will merge or acquire another carrier in order to stem the flow to its competition. The AirTran merger brought a second type of plane -- the 717 -- into Southwest's fleet. structures, with completely different company cultures, said Robert Mann, an industry analyst and consultant. Lastly I strongly suspect this story is being driven more by analysts who love mergers and love pushing mergers than by anyone at Southwest themselves. 'Blue was outbid by Alaska, but the move did show that the carrier is open to the possibility of merging its operation with another airline. It makes more . 2009 - Acquired AeroGal. Update: This story has been updated to reflect Spirit and Frontier's announcement of a planned merger. The real reason why Southwest CEO Gary Kelly is so eager to reach new labor contracts probably has. Terms apply to the offers listed on this page. The Chicago Business Journal is reporting that Southwest CEO Gary Kelly appears to be in the acquisition mode, and Hawaii may not be far from his thoughts and plans. I still think that at the end of the day, either deal that could possibly be challenged would likely be approved, said Kerry Tan, an economics professor at Loyola University Maryland. Plus, your own feed of TPG content. Could Southwest get out of the box by buying JetBluein particular, that airlines order book of Airbus A321neo aircraft? With Spirit being smaller (and among the most disliked airlines in America, BTW), I think its an easier sell. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. In other words, because of the toll the pandemic has had on air travel and airline cash flow, the stock prices are crazy low and unattractive in trying to fund a deal. JetBlues multiple seating classes, such as the popular Mint Class, would also be a culture change from Southwests single class of service. Consider the Alaska/Virgin American merger or Southwest/AirTran. 2013 - Formed by merger of Aeroflot subsidiaries SAT Airlines and Vladivostok Air. That makes almost too much sense. Improve earnings, maximize rewards and track progress toward dream trips. The department is seeking to nullify an alliance between JetBlue and American in the Northeast, a deal that one official described last year as a de facto merger. The agency said in its lawsuit that American, the largest airline in the country, would use the partnership to co-opt a uniquely disruptive competitor. JetBlue and American deny that their deal is anticompetitive and are fighting the case in court. Josh Lew writes about travel, nature, special events and interesting places. It is the first merger of large U.S. airlines since. In terms of market share, JetBlue had a 28% share of passengers at Boston Logan (BOS) and a nearly 13% share of passengers at the three New York City airports -- John F. Kennedy (JFK), LaGuardia (LGA) and Newark (EWR) -- in 2018, according to U.S. Department of Transportation data via Diio by Cirium. In Q2 WN had the highest net margin DESPITE the issues with the MAX. I just don't see it happening. Neither the U.S. Department of Transportation nor A4A maintains official records of airline M&A activity. You could potentially convert some of those to XLR orders giving you the range to go to Europe or deep into South America. The Southwest Airlines mess and rumors of a vaccine walkout Join Mergr and gain access to Southwests M&A summary, the M&A summaries of companies just like it, as well as recent M&A activity in the airlines sector. no merger has been botched quite like the AirTran one, giving away BOTH market share at ATL and 717 fleet to DL on a silver fleet. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Its not necessarily an amazing strategy (Alaska has the same basic problem with future growth and the MAX), but its arguably more viable than two airlines merging that would yield a dumbbell shaped network that doesnt have a hub or a focus city more than five miles from a coastline- Southwest, unlike Alaska and Jet Blue, actually doesnt treat flyover country like a joke and a spoke (and Alaska at Love Field is a joke). Third, Alaska Air would be an extremely pricey acquisition. He says that JetBlue has approximately 15 A321neo deliveries scheduled annually through 2022. People talk about business models, aircraft type, etc most of that is irrelevant. With Trump at the helm you never know of course but I dont think the regulators want to let the big 4 get any bigger by gobbling up one of the larger remaining independents. There haven't really been any recent rumors about a deal between Hawaiian Airlines and JetBlue, but it does seem like a match that could work. Southwest has acquired 4 companies. Apologizing to its passengers for its bad service, the . Southwest Airlines outage and reported problems map Airline Mergers and Acquisitions Jan 17, 2023 The table below is an unofficial compilation of completed (not merely proposed) mergers and acquisitions since the inception of the U.S. airline industry. If anything, United and JetBlue (with their massive Orlando expansions) would be a far better fit. Alaska is the exact opposite of Southwest. Some legal experts said that either deal could win the backing of regulators with some compromises like an agreement to divest gates at some airports. Youd eventually bring the two together, but probably over 5 to 7 years it takes a while, but thats not a bad thing. It would let Sun Country go away gracefully although it really doesnt deserve such a decent demise. All told I suspect Alaska or Jet Blue would ask for a good premium on their value. The real reason why Southwest CEO Gary Kelly is so eager to reach new labor contracts probably has a lot more to do with a desire to keep operations smooth in a period when Southwest Airlines is earning record profits. But its instructive to note that what was originally considered tragic but short term problem for Boeingthe initial crash of a Lion Air Boeing 737 MAX on October 29, 2018has morphed into a massive issue that has consumed the company, its now-fired CEO, its reputation and stock price. Frontier and Spirit to merge, creating fifth-largest airline in U.S. in Becker said, however, that depressed stock prices make doing a big airline deal now problematic. Also, with increasing competition for pilot hiring, bringing the pilots of Spirit over to SWA reduces the challenge of finding enough pilots over the next 6 or 7 years, at least. There might also be some push-back from federal regulators. However, this deal would likely not go forward until Frontier goes public, something that is in the works but has not yet taken place. Frontier-Spirit merger would be main Southwest competitor at BWI, but According to inc.com, the company got in some trouble for taking their passengers to the wrong airport, and someone even sued them for doing this. Such a complicated industry. When the dust settled on a big round of airline consolidation nearly a decade ago, four large companies came to dominate the industry. This chart shows a view of problem reports submitted in the past 24 hours compared to the typical volume of reports by time of day. Southwest flight attendants ponder CEO Gary Kelly's next move after Previously, the IATA had forecast $100 billion in losses for the two-year period. There are simply too many antitrust issues. A position that many have rumors and many would not have thought possible. A brewing fight over the future of the budget carrier Spirit Airlines may give rise to a credible, albeit still smaller, competitor to the industrys giants. The new United Polaris Lounge at Washington Dulles, @malaysiaairlines just announced it would retire i, Welcome to @fly_bur @aveloair! Highest passenger count of an airline in the USA. The table is provided as a service rather than an authoritative source. First Alaska has a long history as an independent and I have to think that over the years there have been other airlines that wanted to acquire them and got rejected. Rumors on Delta Airline pilot forums that Delta will be securing approx 25 717's from another carrier. Many people thought that the era of mergers and acquisitions ended when American Airlines joined forces with U.S. Airways. Every day, new opportunities emerge around M&A and we help professionals of all types comb through transactions, investors, and corporate acquirers via an easy-to-use web database that is accessible to anyone. Third, one thing the AirTran merger showed us was Southwests distaste for operating multiple fleet types. Photo: The Motley Fool. Will Southwest Really Merge With Alaska Or JetBlue? This is actually an interesting theory. Hawaiian serves its namesake state from . 5. Southwest has acquired in 4 different US states. Sure it could. In a recent update, he called JBLU a buy, claiming As Boeing's Stock Goes Down, JetBlue's Should Be Going Up. He put a target price on JBLU stock, currently around $19.15 a share, at $26. In the meantime, the 737 MAX continues to drag on Southwest. Southwest has performed multiple mergers in the past, most recently with AirTran, whose service model wasnt that much different from Alaskas- regional carrier having to be an LCC because Delta was a big force in one of their markets, competitive with Southwest elsewhere, had a first class cabin. Raymond James analyst James Parker wrote in a research note to clients that Frontier could be acquired in a round of consolidation among low-cost carriers. You may opt-out by. In terms of a spacious first class product, the @E, Nearly five years ago, I took a break from I, United Airlines' new Polaris seat is a huge improv. Time To Buy JetBlue On Virgin America Merger Rumors - SeekingAlpha Hawaiian Airlines First Class Lie-Flat Review, Hawaiian Joins Mid-Air Diversions | Now 7 In Three Weeks, Within 48-Hours, 3 Alaska Air Hawaii Flights Divert Over Pacific. For one, the market cap of JetBlue is nearly $5.4B (vs just $2.9B for Spirit). JetBlues routes are not necessarily complementary with Southwests, although an acquisition would give Southwest access to the London routes JetBlue promises to launch in 2021. The four operate in a league of their own, especially at their hub airports in cities like Atlanta, Dallas, Houston and Newark, where they each control a large share of gates and flights. Alaska has a completely incompatible culture to include not hiring pilots if they use nicotine. Given that Southwest's management just put in a lot of time, money, and effort to manage a transition back to an all-737 fleet, the idea that it will blow up this work by buying JetBlue or Hawaiian Airlines is far-fetched, to say the least. It would seem as if Southwest Airlines has a much stronger clientele base. alask Airlines has basically no debt paid off buying virgin thankfully before pandemic hit. A combined Southwest and JetBlue would have a solid 25% share of U.S. domestic traffic, based on DOT data for 2018. Labor relations would be much more contentious (I think Spirit Pilots would jump at the chance to fly under the SWA contract seniority list integrations always being contentious). JetBlue and Spirit Airlines announced Thursday they have reached an agreement on a merger that would create the fifth largest airline in the U.S. Not sure anyone would or should pay it. I see zero reason to think their leadership is interested in being bought. The airline was the largest U.S. operator of the type with 34 aircraft when it was grounded in March and has not taken delivery of a single new aircraft since then. SkyWest : Airlines Partners with Southwest Airlines' Destination 225 If Southwest is sick of waiting for the 737 MAX to be declared safe to fly, why not just order some planes from Boeings competitor? Further, they should do this because despite when the MAX comes back, it will take years for the public to trust it again.
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