They want to know how a proposed merger affects travelers, including whether the combined company will be able to significantly raise fares on routes where the two companies previously competed head-to-head. One obvious stumbling block: Southwest has exclusively operated Boeing 737 aircraft over its 50-year history, while JetBlue is essentially an all-Airbus (plus Embraer regional jets) airline. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Save my name, email, and website in this browser for the next time I comment. It charges extra for seat selection and carry-on baggage and packs seats close together. Frontier could also offer to pay any costs associated with the risk that regulators would challenge the merger in court. Will miss the @united #globalfirstlounge at #ord. They sued for $74,999. Rumors on Delta Airline pilot forums that Delta will be securing approx 25 717's from another carrier. Second, Alaska's route network is heavily concentrated in Seattle, where it caters to a lot of business travelers. Highest passenger count of an airline in the USA. Spirit has about 140 planes (all AirBus) with 100 320 neo orders and 50 options through 2027 thats a lot of growth potential. 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. We should all know by now nothing is ever in inevitable. With a complementary narrowbody feet, Alaska Airlines and JetBlue are best positioned to absorb or be absorbed by Southwest. Further, they should do this because despite when the MAX comes back, it will take years for the public to trust it again. 75235 They cant be too dumb at Love Field. It will take time for it to absorb Virgin's debt and combine operations. Alaska and JetBlue merger talk is completely out to lunch. Thats because larger airlines have advantages. Terms and Conditions Apply. However, gaining the terminal at JFK (which would be an extremely valuable gateway to Europe) would be the boon. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners. All Rights Reserved. The real reason why Southwest CEO Gary Kelly is so eager to reach new labor contracts probably has. Visit the Downdetector Methodology page . The last round of consolidation really was about balance sheets, he said. Southwest has few options (if any) and a merger with JetBlue or Alaska isnt a marriage that is practical or economical. 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. Spirit has not committed to either deal. 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. (Photo by Stewart F. House/Getty Images), Southern California Logistics Airport in Victorville, California on March 28, 2019. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. 301 Route 17 N, Suite 1150, Rutherford, NJ 07070 USA | Telephone: (201) 902-2000, U.S., Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. The theory goes something like this. Second I tend to doubt that an Alaska or JetBlue acquisition would be allowed by the DOT. Sure it could. This is actually an interesting theory. 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 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 aircraft are different, of course, which would require training and logistical upgrades. 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. Experiencing Planet Positive Travel At Wakaya, Fiji's Most Luxurious Private Island, The Greek Island Glow With Virgin Voyages, American Queen Voyages Spring Savings Event. This adds a ton of complexity that Southwest's management is not accustomed to. 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. LOS ANGELES, CA - JUNE 12: Singer Jasmine V tries out the new JetBlue Mint luxury seating at the [+] JetBlue Mint Pop-Up Experience at The Grove on June 12, 2014 in Los Angeles, California. 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. They may have gained some additional routes and some young 737-700s. Now a bit player like Sun Country could be a different deal. 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. "Do we consider near-term [mergers and acquisitions] as the leading probability? None of these companies would be a very suitable merger partner, and attempting to merge would create a huge distraction just as Southwest is starting to ramp up its organic growth again. Dallas, Texas Could JetBlue be an answer to Southwests problems? 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. Major unions have lost court cases and in one instance suffered severe financial damage in the process. It would quickly give WN a dual fleet and a large presence in Central and South America, which they want. 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. However, it is highly unlikely that Southwest Airlines is thinking about any merger. Boeing helped push the entire stock market down on January 21 stating it does not expect to get FAA approval for the return of the 737 MAX to service until mid-year due to further potential developments in the certification process and regulatory scrutiny on its flight control system. 15 Surprising Reasons To Use a Travel Advisor for Your Next Trip, American Queen Voyages - Deeply Discover the Difference, Copyright 2023 Northstar Travel Media, LLC. Instead of asking "are we done yet?" Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. 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. JetBlues multiple seating classes, such as the popular Mint Class, would also be a culture change from Southwests single class of service. Southwest flight attendants ponder CEO Gary Kelly's next move after In the meantime, the 737 MAX continues to drag on Southwest. are down on average 36% over the past year. Frontier Airlines has single cabins. Rumors that, if correct, could dramatically change the playing field in Hawaii travel. A Southwest merger isn't in the cards, and ultra-budget airlines don't seem like a good match for JetBlue's cool image and state-of-the-art in-flight experience. The theory goes something like this. Such a partnership has been the subject of speculation since well before the Alaska-Virgin deal. 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. Alaska Air (ALK 1.14%), Hawaiian Airlines (HA 6.25%), and JetBlue (JBLU 2.73%) top the list of speculation (via Chicago Business Journal). Unless you like paying more and getting less, asking for less competitive airlines is a bad idea. Will Southwest Really Merge With Alaska Or JetBlue? 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. 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. 5 will make for a stronger competitor.. Smaller operator, all 737. Since that forecast, fresh pandemic-related lockdowns have swept the globe amid rising infections and deaths. A solid 89% of the flight attendants participated in the ratification vote, and 87% of them voted against the tentative agreement. Time To Buy JetBlue On Virgin America Merger Rumors - SeekingAlpha It makes more . Matthew is an avid traveler who calls Los Angeles home. Third, Alaska Air would be an extremely pricey acquisition. For the airlines that want it done right then RIGHT now is the time to work out brain damage of airlines coming together! Alaskas F model (standard domestic F) is totally different from Jet Blues (transcon lie flats and all-Y just like Southwest), and t FF programs are also totally different (if anything Rapid Rewards is closer to Mosaic), so I dont see why thats a barrier for one but not the other. 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. brilliant suggestion. You could potentially convert some of those to XLR orders giving you the range to go to Europe or deep into South America. Passenger Airlines, U.S. Government-Imposed Taxes on Air Transportation, U.S. Federal (or Federally Approved) Aviation Tax Collections, A4A Presentation: Industry Review and Outlook, Current Operation Status for U.S. To be sure, the outlooks for the airlines this year remain horrible even as vaccines start to flow globally. 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. PO Box 36611, The new rumor is an old one, but at a new, more opportune time -- Alaska is in the sights of SWA. As well, not put them in a position like this when a debacle happens with the aircraft type they are so heavily relying on. A Southwest merger isn't in the cards, and ultra-budget airlines don't seem like a good match for JetBlue's cool image and state-of-the-art in-flight experience. Southwest Airlines is profitable but has a growth problem created by the continued grounding of its 34 Boeing 737 MAX aircraft (of 310 on order). Melinda Gates: we are giving $250 million more to the COVID-19 relief effort, Olympics great Michael Phelps: the COVID-19 pandemic hasnt been all smiles for me, HP CEO: heres how our business is trending during the pandemic, Lululemon founder: retail will rally back after the pandemic, Walmart CEO: the lack of stimulus is taking its toll, Senator Ted Cruz: big tech is drunk on power. Alaska and JetBlue would be a stronger force, as would American and Southwest. Under either deal, the new larger airline would have more market power in certain cities, particularly in Florida, a popular destination where all three airlines compete. I just dont see an appetite for that. This summer, flying Southwest Airlines has been a toxic mix of canceled flights, long delays and disgruntled pilots and flight attendants. Smaller airlines could be the next to merge. Acquire them simply for the turn key second fleet type and to do away with a competitor. "Acquiring JetBlue is such an opportunity.". Its style and company profile do not present any viable merger candidates in the United States. Financial troubles, including a string of bankruptcies, in the 2000s led to the latest wave of large mergers, motivated in large part by survival, said William Swelbar, an aviation consultant and research engineer at the Massachusetts Institute of Technologys International Center for Air Transportation. 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. 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 colonial #architecture of #mumbai is stunning. 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. Rumors of a Frontier-Spirit marriage have gained new energy now that a former Spirit exec is at the head of Frontier and Spirit's new CEO was running AirTran when it merged with Southwest in 2010. This requires amenities like first class seats and airport lounges that don't exist at Southwest. 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. I think Southwest and AirTran had a much closer business model than Alaska or JetBlue, but AirTran quickly became Southwest. (Full disclosure: I own stock in Southwest Airlines, American Airlines and Jet Blue.). Sell side analysts and their version of click bait. Southwest needs to diversify its fleet away from the 737," wrote Baker on Tuesday. 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). Ms. Moss and others published a study in 2013 that concluded that airlines dont deliver on the benefits they claim their mergers will provide. This heat map shows where user-submitted problem reports are concentrated over the past 24 hours. Cost basis and return based on previous market day close. Downdetector only reports an incident when the number of problem reports is significantly higher than the typical volume for that time of day. Frontier flys many of the same routes and is the largest direct competitor in the very important DEN market. The boards of both companies approved the deal over the weekend. Regarding JetBlue, acquiring them would have significant value for sure, but would be much more challenging. ATA is in a horrible position. Rumors are swirling that Southwest Airlines may solve its lingering Boeing 737 MAX problem by acquiring another airline. 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. We'll run a soft credit check to find special offers, but it wont affect your credit score. 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. The Company's most targeted sectors include airlines (75%) and aerospace (25%).. Join Mergr and gain access to Southwest . Southwest has acquired in 4 different US states. 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 next largest carrier, American Airlines, had a 22% share. Thoughts? Look, I am sure the executives in Dallas are seriously rethinking their one aircraft type strategy BECAUSE of the Max. So neither is a great fit beyond merely acquiring aircraft. Southwest has over 100 737 MAX on order, with growth plans built around that aircraft. Worst U.S. airline is JetBlue, not Spirit or Frontier: WSJ ranking - CNBC He added that the possibility of non-organic growth was larger than the MAX and a "huge, strategic question.". Southwest's corporate headquarters in Dallas, Texas. 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. Find the right card for you. Quickly dismantle Spirits network and deploy the Airbus where it makes sense within the WN network. So now why Spirit? Card Rating is based on the opinion of TPGs editors and is not influenced by the card issuer. 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. Spirit does everything it can to keep costs and fares low. (Photo by Mark RALSTON / AFP) (Photo credit should read MARK RALSTON/AFP/Getty Images). Southwests largest acquisition to date was in 2010, when it acquired AirTran Airways for $1.4B. By getting larger, any airline would be better able to spread out costs. This is a BETA experience. At some point, that risk becomes strategically unacceptable to Southwest. Most international servicegone. I am one example of many I am sure. The Southwest Airlines mess and rumors of a vaccine walkout Problematically for Southwest, the eventual re-certification of the 737 MAX may not re-balance the current trajectory. If Boeing announces further MAX return-of-service delays and/or a 737 MAX rate cut, that would increase risk to Southwest of a multi-year constraint on its capacity. Youd eventually bring the two together, but probably over 5 to 7 years it takes a while, but thats not a bad thing. With a complimentary route map and compatible fleet, and regardless of AS' financial status, it all seems to click. Michael Goldstein is a journalist and playwright based in Los Angeles. JetBlue operates two models of aircraft already. As a subscriber, you have 10 gift articles to give each month. Great if Alaska purchased Jet blue w/bonus of gaining more routes East Coast. 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. Boeing gathered hundreds of pilots and reporters to unveil the changes to the MCAS stall prevention system, which has been implicated in the crashes in Ethiopia and Indonesia, as part of a charm offensive to restore the company's reputation.
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