Siri hates me! But that does . Alaska Airlines continuously ranks number 1 in customer satisfaction, despite the criticism of their first class (you dont absolutely need to lay flat during a 4 1/2 hour flight). www.southwest.com. All rights reserved. Analysts speculated that JetBlue made its offer in part because it feared losing business to a combined Frontier-Spirit, which the airline cited as a potential risk to its competitiveness in its annual report. But dear @flysas , next time if I a, Ready for #PIA from #MAN to #JFK -- we will be rac, Another room with a beautiful view #hyattregenc, Enjoying #shanghai with @onemileatatime from the i, From my front gate to my boarding gate in 15 minut, @malaysiaairlines #747 out of retirement and in se, View from my 61st floor room at the beautiful bran. Cash is primarily being used to fund the losses being driven by the plunge in demand and high structural costs (see airplane maintenance, unionized employees, etc.). Could JetBlue be an answer to Southwests problems? 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. The Justice Department is seeking to nullify an alliance between JetBlue and American in the Northeast. Opinions expressed here are the authors alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities. When the FAA finally gives the A-OK , the theory goes, a flood of 737 MAX aircraft will make their way to the airlines, potentially adding excess capacity and driving fares down in the teeth of an oncoming recession. 2009 - Acquired AeroGal. He says that JetBlue has approximately 15. Southwest was formed in 1967 and is based in Dallas, Texas. By numbers alone, JetBlues all-cash deal is superior, offering a roughly 40 percent premium to Frontiers original cash and share offer, based on share prices the day before JetBlue disclosed its bid. Thoughts? All contract under the jet labor. Whatever challenges the D.O.J. As long as the brains in the training center in Dallas dont try and re-invent the wheel, it would go not poorly. Anyone can read what you share. Alaska could cost close to 10 times that amount, given that its market cap is already $9.7 billion and a merger premium would be necessary. In an illustration of the industrys lopsided nature, Alaska Airlines, the fifth-largest carrier last year, controlled just 5 percent of the domestic air travel market, while United, the fourth biggest, had nearly 13 percent. And while an acquisition of JetBlue may not be the answer, DeNardi is right that airlines like Southwest will need to think out of the box to grow, even as the 737 MAX mess continues to fester. Fourth, buying Alaska would also mean having to deal with the regional operation. They also said that buying Spirit would allow JetBlue to compete more aggressively with the four big airlines. 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. Source: Southwest Image Library. For such reasons, a deal is unlikely to happen. It would be an upgrade for Spirits current customers as well. However, DeNardi says that on Southwests October earnings call, CEO Kelly was surprisingly candid about plans to formally reconsider Southwest's single-fleet type strategy. DeNardi believes that Boeings woes materially increase the likelihood that Southwest diversify its fleet., Southwest Airlines Boeing 737 MAX aircraft are parked on the tarmac after being grounded, at the [+] Southern California Logistics Airport in Victorville, California on March 28, 2019. That leaves airlines that are further down the size rankings. All Rights Reserved. Josh Lew writes about travel, nature, special events and interesting places. Its comical to read people discredit Alaskas success; they have proven to be the competitive underdogs, especially by purchasing Virgin America, a company that was also a 180 from the traditional carrier. This is a BETA experience. And the easiest way to grow at many airports is to buy another airline that has gates and takeoff and landing slots. 6x Marriott Bonvoy Points on each dollar of eligible purchases at hotels participating in the Marriott Bonvoy program. Its 17% share barely trails American, with 17.6%, and Delta, 17.4%. Southwest Airlines. Plus, your own feed of TPG content. Limited Time Offer: Earn 125,000 Bonus Marriott Bonvoy Points after you use your new Card to make $5,000 in purchases within the first 3 months of Card Membership. Is a Senior Aviation Business Reporter at The Points Guy. Southwest expected 44 MAX deliveries in 2019, 38 in 2020, 44 in 2021 and 41 in 2022, for a hoped-for growth of 3-5% annually, according to DeNardi. Third, one thing the AirTran merger showed us was Southwests distaste for operating multiple fleet types. And while Spirit and JetBlue have some overlap, for example in similar fleets of planes, they operate differently. Such is the modest proposal put forth by Stifel airline analyst Joe DeNardi. The rumors appear to have started because the Southwest pilots union filed a lawsuit against the mandate on Friday just before the airline suddenly canceled thousands of flights. Consolidation is slowing downMerger mania in the airline industry may not be over, but it is definitely slowing down. Southwest has acquired 4 companies. Southwest Airlines Unveils Imua One, A High-flying Tribute, with Gratitude to Southwest Employees and the People in Hawaii They Serve Apr 28, 2023 -Southwest Airlines Co. (NYSE: LUV) today, on the anniversary of its first interisland flights within Hawaii, commemorates beginning a fifth year of serving the Aloha State by introducing Imua One, a Hawaii-themed aircraft livery that symbolizes . The idea that Southwest would merge with JetBlue or Alaska is fanciful at best and delusional at worst. 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. 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. Receive a 7% discount off standard rates for reservations of standard guest rooms at hotels that participate in the Marriott Bonvoy program when you book directly. Tie-6. The next couple of years will be interesting. 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. Airline industry has a lot to ponder with what they just went through/pandemic. Find the right card for you. Integrating airlines, including their computer systems and the seniority rankings of pilots and flight attendants, has never been easy and has led to widespread flight cancellations and long legal disputes. Herb is probably twitching in his grave even hearing someone mention it! This site does not include all credit card companies or all available credit card offers. Spirit does everything it can to keep costs and fares low. Look, I am sure the executives in Dallas are seriously rethinking their one aircraft type strategy BECAUSE of the Max. The buzz followed a report by Stifel analyst Joseph DeNardi diving into the feasibility of a Southwest-JetBlue tie-up. Diana Moss, the president of the American Antitrust Institute, a left-leaning organization that has long called for tougher enforcement of competition laws, has asked the Justice Department to block the Spirit-Frontier deal. First classgone. Dallas, Texas The threat of such an acquisition could force an airline like #5 Alaska (6.4% share) to consider a JetBlue purchase or look for another partner. But even this schedule change was before Boeings latest disastrous 737 MAX announcement. As a subscriber, you have 10 gift articles to give each month. (Photo by Mark RALSTON / AFP) (Photo credit should read MARK RALSTON/AFP/Getty Images), JetBlue Mint Pop-Up Experience at The Grove on June 12, 2014 in Los Angeles, California. Southwest will not be merging with Alaska Airlines There is really no real benefit for Southwest to do so. Southwest Airlines outages reported in the last 24 hours. No other airline comes close. Now Sun Country that could be a very different story. The International Air Transport Association (IATA) said last November the airline industry will lose $157 billion in 2020 and 2021. Third, Alaska Air would be an extremely pricey acquisition. That makes it the most logical merger partner of the three for Southwest Airlines. Such a partnership has been the subject of speculation since well before the Alaska-Virgin deal. Card Rating is based on the opinion of TPGs editors and is not influenced by the card issuer. United States, Added Becker, You can see Allegiant, Frontier and Spirit merge. Publicly, Southwest remains upbeat, stating We remain confident that, once certified by the FAA, the enhancements will support the safe operation of the MAX., DeNardi, however, says, Over the last few months, there have been several data points which suggest that Southwest's capacity plans will be impacted more significantly and for a longer duration than previously expectedAs a result, we now see M&A as more likely (70% vs. 50% previously).. Save my name, email, and website in this browser for the next time I comment. Explore While obviously a smaller number of aircraft, the A321neo does offer about 25% more seats than the MAX8, and so could address much of Southwests capacity growth needs. Doubters see Southwests 737 MAX problem as a short-term issue. Related:Southwest Airlines Bets on New York LaGuardia Following Newark Exit. (Photo by Stewart F. House/Getty Images), Southwest just pushed back its potential return to service date of the 737 MAX again, to June 6, 2020, stating The revision will proactively remove roughly 330 weekday flights from our schedule out of our total peak-day schedule of more than 4,000 daily flights.. Mr. Denis said regulators examining airline deals had historically focused on the impact of combining large, legacy airlines those in business for decades. Regarding JetBlue, acquiring them would have significant value for sure, but would be much more challenging. Especially to cure what really is a short term issue with the MAX. Related:Southwests 737-700s Among Jets Sticking Around Longer Because of the MAX, "Southwest needs aircraft. Alison Brown could just predict this for me so I know which one of my favorite be going and Im just glad to be on the side and a man thank you moving forward positively! Visit the Downdetector Methodology page . Frontier Airlines has single cabins. "seniority_list" merger integration software, Do Not Sell or Share My Personal Information. United is going back to JFK [airport] after an absence of a few years and it [JetBlue] has a big presence there, long-time airline industry analyst Helane Becker of Cowen told Yahoo Finance Live. 5. From a network perspective, though, Alaska doesnt make a ton of sense since Southwest is pretty well-established on the West Coast and probably does not have a lot of interest in operating Alaskas large EAS intra-Alaska routes. The Company's most targeted sectors include airlines (75%) and aerospace (25%).. Join Mergr and gain access to Southwest . JetBlue similarly tries to keep costs low but tries to distinguish itself by offering more legroom and free wireless internet in flight. Our points-obsessed staff uses a plethora of credit cards on a daily basis. 6 points per dollar on eligible purchases at hotels participating in the Marriott Bonvoy program, 4 points per dollar at restaurants worldwide, U.S. gas stations, wireless telephone services purchased directly from U.S. service providers and U.S. shipping, 2 points per dollar on all other eligible purchases, Earn a free-night award each card renewal month (up to 35,000 points), Receive 15 elite night credits to jump-start status, Must spend $60,000 in a year for second free-night award. The new United Polaris Lounge at Washington Dulles, @malaysiaairlines just announced it would retire i, Welcome to @fly_bur @aveloair! You'll earn 15 elite night credits each calendar year, and receive automatic Gold elite status. Southwest has been consistently profitable and has a strong balance sheet, which could help finance an acquisition. 2009 - Merged with TACA Airlines. I cannot see that happening with Alaskas route network, lounge network, fleet, and onboard cabin. Allegiant Air. He says that JetBlue has approximately 15 A321neo deliveries scheduled annually through 2022. Both deals present a new challenge to antitrust agencies, said Paul Denis, who represented US Airways in its merger with American Airlines, which closed in 2013. However the merger rumors play out in the weeks and months to come, Southwest flight attendants are planning to get back to the negotiating table, perhaps as early as mid-August, sources indicated. Unless you like paying more and getting less, asking for less competitive airlines is a bad idea. The combo would, in one fell swoop, catapult Southwest to a strong market-leading position domestically, strengthen its network in the Northeast and to the Caribbean and Latin America, and provide it with an Airbus fleet and robust order book that would diversify its all-Boeing 737 fleet. More likely is that WN goes out of the box and finds a way to lease previous gen 737s or hunt out a few that are on the market for sale to bridge the gap. Why not buy Sun Country? They can more easily recruit pilots, who are in short supply. The Flight Attendants & Pilots unions, wouldnt allow it to happen. provides, concessions can be made., Bidding War for Spirit Could Undercut Power of Four Big Airlines, https://www.nytimes.com/2022/04/08/business/spirit-airlines-jetblue-frontier.html. https://www.forbes.com/advisor/author/brandon-bycer/, https://www.forbes.com/advisor/author/hjohnson/. Were expecting M&A to occur. Seems like an awfully expensive way to solve what their management should hope is a shorter-term issue. Alaska and JetBlue merger talk is completely out to lunch. AirTran earned $250 million in fees . Terms apply to the offers listed on this page. JetBlue already competes with the four large airlines in cities like New York and Boston and could challenge them further if it is able to acquire Spirits planes, airport gates and staff. 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. 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. It operated 194 A320 family jets and 60 Embraer 190s at the time. The airline has removed the aircraft from schedules through Feb. 8, and continues awaiting clarity from U.S . This Southwest Airlines merger talk simply seems to be a case of the rumor mill run amok. The last round of consolidation really was about balance sheets, he said. Michael Goldstein is a journalist and playwright based in Los Angeles. Bigger airlines also get lower prices and better service from airplane manufacturers. That mindset has just been proven false with Alaska Airline's acquisition of Virgin America. I simply cannot see it happening. To make the world smarter, happier, and richer. 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. 2014 - Acquired AeroUnion, which continues to operate as a separate airline. Beat Of Hawaii. That's a strong incentive to stand pat, beyond the business issues that make a merger with Hawaiian Airlines, JetBlue, or Alaska Air suspect. Some critics of corporate consolidation disagree and say that airline mergers could be bad for consumers and workers. Spirit is already operating in a lot of places SWA desires to go in Central and South America SWA is already in the Caribbean but can go other places there too with the large presence they have in FLL add the market share and gates Spirit has there and you have a fortress domicile (SWA doesnt actually operate hub and spoke). A merger between Frontier, which is concentrated in the West, and Spirit, which is concentrated in the East, would create a larger national budget airline that could pressure bigger carriers to drop fares in more cities. Southwest paid $1.4 billion for AirTran. Thats what stopped it 10 years ago, there unions there unions dragged there feet over it so both parties walked. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. In addition the airline industry is the most volatile hit hardest by where economy is standing, pandemics, war , not to mention if airline has huge debt from purchasing other airlines & inheriting their debt. Southwest has acquired 4 companies. Why a merger doesn't make senseHistorically, one of Southwest's main tools for keeping costs down has been operating a single fleet type: the Boeing 737. 75235 AirTran, meanwhile, charges $75 for reservation changes made after a purchase, in addition to a fee of $20 for the first checked bag and $25 for the second. It has also divested 1 asset. Except for one thing: AirTran's not completely folded in yet. Refund policy Change or cancel your flight Flight credits Overbooking Procedures Transferable Flight Credit Same-day change and Same-day standby. The Big Four in the airline industry long known as Delta (DAL), American Airlines (AAL), United Airlines (UAL) and Southwest Airlines (LUV) may look a little different at some point this year as executives pull the trigger on mergers to consolidate costs as the slog from the depths of the pandemic stretches on. And the Biden administration is uniquely focused on the impact of corporate deals on economic inequality by, for example, raising fares and suppressing wages. 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? We should all know by now nothing is ever in inevitable. Learn More. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. (Photo by Michael Tullberg/Getty Images). Since the industry was deregulated in the late 1970s, airlines have undergone successive waves of consolidation as they sought first regional, national and then international strength. WN did make a serious run at Frontier years ago. Acquire them simply for the turn key second fleet type and to do away with a competitor. With either Alaska or JetBlue (and especially JetBlue) they would be buying a ton of different airplanes. Sw should merger with AA.technically spakimg AA has same mentality as SW, no service and everything is cheaper, Not sure why any one should or would pay for it. Smaller airlines could be the next to merge. There were significant differences in those areas in both cases. I recently spent a weekend at the @ventanabigsur. Southwest's corporate headquarters in Dallas, Texas. 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. Southwests largest acquisition to date was in 2010, when it acquired AirTran Airways for $1.4B.