Merger rumors continue...

[Albert]

 
 
 
 


I really think you guys are missing the huge cost savings WN enjoys by keeping to the single fleet strategy.
It is just one of the critical tools WN uses to control costs.

Better look at the ALK market cap they wont come cheap

 

[eolesen]

That didn't stop the approval of:
UAL-CAL
DAL-NWA
AA-US

A merged ALK-WN would be smaller than AA and with a little fleet tweaking would be about the size of DAL.

Yeah, not so sure of that.

On a domestic ASM basis, WN is by far the second largest airline in the US. Add AS, and they'd be considerably larger than AA.

Aug 2015

AA 146,528M
WN 132,372M
DL 120,633M
UA 106,131M
AS  32,104M

http://www.transtats.bts.gov/carriers.asp?pn=1

The only reason the previous mergers were approved is that none of the carriers involved represented more than 15% pre-merger market share. Never say never, but I find it hard to believe the DOJ would sit back and allow a merger for anyone already holding close to (or above) 20% market share.

 

[WNMECH]

The only reason the previous mergers were approved is that none of the carriers involved represented more than 15% pre-merger market share.

1. Can you prove that statement with any quote from a government official or documentation talking about a 15% barrier? Or are you just speculating?

2. WN has already stated it expects most of its near future expansion to come from international destinations. They have picked out 50 of them to start with. After a consolidation of the two airlines, those domestic ASM would come down as WN eliminated duplicate routes and shifted some aircraft to international routes.

3. So even if it did give WN the most domestic ASM, so what? That same fact did not stop the AA-US merger when it gave THEM the most domestic ASM. If it was ok then, why the double standard?


I repeat, I don't think a merger will happen in the near future. I just believe one would be great for WN and AS.

 

[USFlyer]

Let's not get started on double standards.  What the DOJ made AA-US give up at DCA looks absurd in light of what WN is being allowed to keep at DAL, for example.
 
At any rate, I just don't see the DOJ approving another merger.  AA-US barely got approved.  And, AS is very expensive with its high market cap.

 

[topDawg]

Yes I did.
 

WN has historically been the reason fares have remained reasonable in markets they enter. The legacies tend to lower airfares to compete with WN.
They even gave it a name if you don't recall.
The Southwest Effect

Before the last couple of years, WN has resisted most fare increase attempts by the legacies causing them to roll them back after a couple days.
Whether you want to admit it or not, WN has been the low fare counterweight that drove the other majors into bankruptcy and forced them to lower there costs because they couldn't charge fares so high to cover those costs.

I larger, stronger WN might not be good for the legacies, but it would be great for the traveling public, WN employees and stock holders.

You still cant explain why the other big mergers were good for the country and another WN merger is bad.
 

Simple?
You don't think those other mergers removed competitors?
Really?



And consolidation is done just because you say so?
Where is the statement from the government saying no more mergers will be approved?


For the record, I don't think WN is looking to merger with anyone in the next year or so.
But I do think this one would be good and I think WN could get the support to pull it off if they wanted to.

no but we can thank you guys for all the awesome outsourcing that the industry has done, so thanks for that. 
 
but having said that, Living in Atlanta i can simply say you are full of it. Drink all the company koolaid you want but post FL merger fares are nothing but up. Sorry, WN is just a domestic legacy now, no better than when US airways was calling it self a "LCC" 
 
 
and the government made it pretty clear after US/AA that it was it. Every airline CEO has basically said so. (Richard Anderson has made it quite clear consolidation with the big 4 is done for a while.) 

 

[WNMECH]

Dawg,
You are correct about Atlanta.
Fares rose because WN reduced AirTran flights.
WN has 125 flights while Delta has almost 1000 at their mega hub.
That is not a place we would want to start a fare war.
WN just needed Atlanta on the map to get their piece of that pie.
Southwest dehubbed AirTran who had over 200 flights at Atlanta. After that Delta filled the void with higher fare flights.

However you prove my point.
If WN reduced service in any city across the country, airfares would rise there too.
WN is the reason that fares are lower in markets they enter.

 

[eolesen]

1. Can you prove that statement with any quote from a government official or documentation talking about a 15% barrier? Or are you just speculating?

WT, is that you?...

No, you won't find any government issued decrees or documentation, but there's plenty of proof in the telecom sector that mergers involving dominant players have been foiled over marketshare concerns. AT&T + TMobile, and Comcast + TimeWarner are just two recent examples. Both were scuttled because of the #2 in their respective market (wireless & cable/sat) were involved. AT&T + DirecTV wasn't questioned because it crossed market sectors.
 

3. So even if it did give WN the most domestic ASM, so what? That same fact did not stop the AA-US merger when it gave THEM the most domestic ASM. If it was ok then, why the double standard?

There is no double standard. WN already got permission to merge with FL, which got it to its current 19% marketshare position.

And, back to my 15% figure... nobody who merged had >15% domestic share prior to merger approvals. Call it speculation if you must, but the data doesn't lie.

Regardless of where the threshold falls, there's no way that DOJ would allow a merger to create another 24% marketshare situation. AA/US shouldn't have been allowed, but since WN, UA and DL had already gotten permission, there wasn't a lot of justification to block AA beyond the concessions they gave up.
 

July 2009 Market Share
AA	14.63%
AS	3.83%
B6	4.35%
CO	9.24%
DL	13.56%
F9	1.67%
FL	3.73%
HA	1.34%
NK	0.89%
NW	8.41%
UA	12.76%
US	9.94%
VX	1.00%
WN	14.67%
Source: OAG


July 2012 Market Share
AA	14.14%
AS	4.34%
B6	5.06%
DL	20.16%
F9	1.81%
FL	3.13%
HA	1.56%
NK	1.45%
UA	20.97%
US	9.80%
VX	1.80%
WN	15.79%
Source: OAG


July 2015 Market Share
AA	23.83%
DL	20.40%
WN	19.02%
UA	18.76%
B6	5.36%
AS	5.05%
NK	2.50%
F9	1.73%
HA	1.72%
VX	1.64%

Source: OAG

 

[robbedagain]

I often wonder if Hawaiian Airlines could be involved in a merger??

 

[swamt]

I often wonder if Hawaiian Airlines could be involved in a merger??

They will some time in the future.  Good point...

 

[WNMECH]

WT, is that you?... No, you won't find any government issued decrees or documentation, but there's plenty of proof in the telecom sector that mergers involving dominant players have been foiled over marketshare concerns. AT&T + TMobile, and Comcast + TimeWarner are just two recent examples. Both were scuttled because of the #2 in their respective market (wireless & cable/sat) were involved. AT&T + DirecTV wasn't questioned because it crossed market sectors. There is no double standard. WN already got permission to merge with FL, which got it to its current 19% marketshare position.And, back to my 15% figure... nobody who merged had >15% domestic share prior to merger approvals. Call it speculation if you must, but the data doesn't lie.Regardless of where the threshold falls, there's no way that DOJ would allow a merger to create another 24% marketshare situation. AA/US shouldn't have been allowed, but since WN, UA and DL had already gotten permission, there wasn't a lot of justification to block AA beyond the concessions they gave up. 

Lol,
I knew I sounded like WT when I touted the WN company line.

I just wanted to know if I was debating against fact or opinion.
It seems now it was just your opinion which is fine by me.

You state that no merger will be allowed that creates 24% share but also state that it was allowed already in the AA-US case.
You then say it shouldn't have been approved but you were wrong and it was approved.

I submit that you are just as wrong now as you were then.

I use your same closing reasoning that since it was approved once, there is no justification it wouldn't be approved again.

You also shouldn't discount the fact that WN is still considered the low fare counterweight to the other big 3 by many people in power.
Regardless as to how accurate it is.

 

[eolesen]

You're missing the entire point on why AA/US was approved... After WN got approval for merging with FL, CO got approval with UA, and DL got approval with NW, it would have been discriminatory to deny US/AA. Discrimination is far easier to prove than price gouging is.

There's no way the DOJ will allow refills after that last round. It was a once & done.

Argue otherwise if you will, but the only mergers that will be allowed in the future will be smaller carriers *or* perhaps a failing carrier (which historically has applied a different set of standards).

 

[WNMECH]

I am not missing the point that it is only your opinion of why AA-US got approval.

The DOJ has never set any bar or redline to how far they will let consolidation go.
You present it as fact but it isn't.

Until the DOJ says no or signals that some are too large, the door is still open.
That is my opinion and it is as unproven and as valid as yours.

However, you did already admit you were wrong on the AA-US approval by saying it shouldn't have happened also, but it did.
So I guess your credibility on the subject may be alittle in doubt.

Wn could spin numbers to make an argument that they are dwarfed by AA and Dal and that a merger is needed to keep up with them. It isn't that hard. Lobbyists and politicians would do the rest.
The whole truth isn't always needed to get some things done.

(Doing my best WT impression) lol.

 

[jimntx]

However, you did already admit you were wrong on the AA-US approval by saying it shouldn't have happened also, but it did.
So I guess your credibility on the subject may be alittle in doubt.
 

Saying something should not have happened does not make the person who said it wrong if it did happen.  There are a lot of things that happen everyday that should not have happened.  E's credibility is in now way damaged simply because he believes that the AA-US merger should not have been approved.  The fact that it was does not make him wrong.  There are a lot of people that STILL think the merger should not have been approved.
 
After 5,000 years of fighting among those Semitic first cousins I think there should not be conflict in the Middle East, but guess what?  There is.  That does not make me wrong in thinking that they should have settled their differences by now.

 

[WNMECH]

Some people think the DOJ was wrong to approve AA.
The DOJ thought they were right and approved it anyway.

Some people think the DOJ would be wrong to approve a WN merger.
It would only matter what the DOJ thinks on that one too.

If a person relies on a certain set of facts to determine if a merger should be done, and the DOJ uses the same or a different set of facts to determine if it should be done and approves it anyway,
Who is really wrong?

If a person believes that Delta should not be able to trespass on WN leased gates due to the WARA, but a judge or the government lets it continue anyway, was the person wrong?

Wow, I am even starting to reason like WT.

Ok, E's credibility is still intact but on this subject unproven.
Mine may be alittle shaky though.

 

[FWAAA]

If the merger of InBev and Miller is approved, and if Marriott can merge with Starwood, then anything is technically possible. Despite those mergers, and the previous airline mergers, I don't think that the government would approve a merger between WN and AS or WN and B6 unless the acquired company were failing.