Mdw&ac Opportunity

[V1]

Will SWA take advantage of this Gate and A/C opportunity?

 

[V1]

ATA MDW

 

[coolflyingfool]

SWA could take all of ATA's 30 737-800's and retire all of SWA's 737-500's and still increase the fleet by 5 planes and a lot of seats.

 

[FA Mikey]

SWA could take all of ATA's 30 737-800's and retire all of SWA's 737-500's and still increase the fleet by 5 planes and a lot of seats.

[post="172414"][/post]​

Does SWA fly the 800 model?

 

[ngneer]

Well, according to this article, one analyst says flat out that ATA is shopping its assets at MDW to Southwest specifically. These assets would be gates and such, not aircraft. Interesting. SWA could suddenly become a much bigger player in Chicago than they already are.

 

[WorldTraveler]

I don’t think the Justice Department will allow Southwest to gain control of all of ATA’s MDW assets given that SW already has about 40% of the market which is about the same as ATA. The government has never set a maximum market share for LCCs but 80% of the market is not good for consumers in any business and industry. AirTran might have a shot at it and they have also been rumored to be interested.

 

[jimntx]

Here's a link to the original article from the Financial Times of London. ATA is not only trying to sell their gate leases, they are also trying to transfer their a/c leases on all of their 737s. Evidently, they are getting out of the domestic scheduled market.

Financial Times article

 

[FA Mikey]

I don’t think the Justice Department will allow Southwest to gain control of all of ATA’s MDW assets given that SW already has about 40% of the market which is about the same as ATA. The government has never set a maximum market share for LCCs but 80% of the market is not good for consumers in any business and industry. AirTran might have a shot at it and they have also been rumored to be interested.

[post="172437"][/post]​

I am sure a good argument can be made that they are in the backyard so to speak of ORD and competing against UAL and AA.

 

[jimntx]

Also, it doesn't appear that the Justice Department cared a fig when SWA took over 100% of DAL, or about 90% of HOU or any other of a number of major metro area "second airports." How much of OAK does SWA control?

 

[RowUnderDCA]

I agree that something could be worked out to please DOT re WN/ATA transaction. Failing carrier doctrine could play a role too.

 

[SWAFA30]

Does SWA fly the 800 model?

[post="172429"][/post]​

Do we operate the -800? No. The -800 does not "fit" from a fleet commonality standpoint...at least as it applies to flight attendant staffing. As configured by TZ, The -800 would require a 4th flight attendant and would make unscheduled a/c swaps problematic. The only way to avoid the issue would be to configure the
-800 with only 149 seats. The question then becomes...would it be worth operating an additional series for only 12 additional seats?

 

[WorldTraveler]

WN's position at OAK and DAL was not created by acquisition. I'm quite certain that AA and UA, if nobody else will vigorously oppose any attempt to consolidate power at MDW. Either you believe antitrust laws apply equally in the industry or you don't believe they apply at all. I personally don't believe the DOT will allow WN to acquire ATA's assets in entirety, even under the failing carrier doctrine. And who's to say that other carriers might not be interested, including UA or AA? I suspect JetBlue and AirTran could also be interested as well. FL could be interested in the a/c but both carriers would salivate at the opportunity for a major foothold in CHI.

Either way, it appears the LCCs are moving in to consolidate their positions - exactly what has been expected and exactly why the government has no interest in protecting the legacy carriers; there will be no shortage of carriers interested in replacing any carriers should they fail.

 

[N421LV]

Do we operate the -800? No. The -800 does not "fit" from a fleet commonality standpoint...at least as it applies to flight attendant staffing. As configured by TZ, The -800 would require a 4th flight attendant and would make unscheduled a/c swaps problematic. The only way to avoid the issue would be to configure the
-800 with only 149 seats. The question then becomes...would it be worth operating an additional series for only 12 additional seats?

[post="172468"][/post]​

Also, in the battle of Midway, I have heard that the -800 has proven to be a tactical blunder as it barely can take a full load of pax out of MDW and still consistently reach west coast cities year-round. The -700 is not as limited.

 

[hobbes]

Also, it doesn't appear that the Justice Department cared a fig when SWA took over 100% of DAL, or about 90% of HOU or any other of a number of major metro area "second airports." How much of OAK does SWA control?

[post="172458"][/post]​

Southwest didn't "take over" 100% of DAL. Nobody else wanted it! They had all signed a deal agreeing to move to DFW, and they tried to sue Southwest to force them to move as well (Southwest wasn't in business at the time the deal was signed). After several years of legal battles, Southwest finally had a decisive win.

Other carriers have tried to come into DAL, and very few have succeeded. CAL still has some RJ flights from there, but Delta (ASA), American, and Legend all tried and failed.

So it isn't an issue of takeover or monopoly on an airport. It's just that SWA sees business opportunities where other airlines don't, and they can generate enough traffic to maintain their business (and profitability) at a secondary airport. Such was the case with HOU.

So why should the DOJ care? Any airline is free to come in and compete, provided they can obtain gate space. Just as Southwest is free to go into any airport and compete if we can obtain gate space. Southwest is just smarter about the airports they choose.

 

[TechBoy]

Also, in the battle of Midway, I have heard that the -800 has proven to be a tactical blunder as it barely can take a full load of pax out of MDW and still consistently reach west coast cities year-round. The -700 is not as limited.

[post="172596"][/post]​

If true, LUV could easily solve this problem by moving the -800s to other high volume routes (e.g. BWI-Florida, HOU-DAL) and using -700s at MDW. I would think that this is a huge opportunity for LUV and they should not let if pass by. Fleet commonality is part of their efficiency, but I'm not sure that running -800s really compromises commonality that much. Besides, as they continue to take market share and stimulate new traffic, there are going to be routes where a higher capacity aircraft will add to efficiency.