Tough decisions and broken crystal balls

[Soul Brotha']

Now that the legacies are down to just 3 (DAL/AA/UAL), there will be consolidation amongst the LCC/Major level. Southwest already took AirTran. The only airlines left that have not merged are:

Spirit
Frontier
Virgin
JetBlue
Allegiant
Hawaiian (not including mergers from long before)
Alaska (not including mergers from long before)

My guesses are:

Frontier is being spun off by Republic to Indigo partners/holdings? led by a guy named Franke, the same guy and investment company that owned Spirit before IPO. Frontier is already being turned into an ULCC model just like Spirit. My guess would be Frontier and Spirit in the next five years or less. I highly doubt Spirit will "realize" its three-fold growth as pure new deliveries, IMO, a Frontier merger will put them close to 100 planes and then after merger synergies, the rest will be growth.

JetBlue and Virgin. Now that AA/US has passed, I think these two are the closest in terms of similar models. Same fleet (different engine types), similar route structure with heavy presence on east (B6) and west (VX). Nothing will happen with VX until IPO and once its a public company then it opens a road for merger/acquisition scenarios. I think VX will go public IPO in 2014, and then be merged/acquired in 5 years by 2020. It's also interesting that both JetBlue (24 E190s) and Virgin (30 NEOs) deferred these aircraft to exactly 2020-2022. And keeping in mind that jetBlue was suppose to be the original Virgin America back in the late 90s with Branson and Neeleman's talks falling through. Lastly, they are both non-union (at the moment) so that eliminates a lot of merger hurdles as far as labor goes.

The wildcards will be Hawaiian and Alaska. I keep hearing Hawaiian and VX but I can't see that one happening. At the moment Alaska is "too expensive" for DAL to acquire. An Alaska and Delta merger is still a possibility. I wouldn't discount a Hawaiian/Alaska merger but that might be hard to approve with Alaska's heavy presence on flights to the state of Hawaii. Whoever acquires/mergers with Alaska or Hawaiian will then set the stage for the rest of the other LCCs.

I think Allegiant's model is so different that they will probably continue stand-alone.

Make no mistake, I think for all of these majors/LCCs listed above, they will have to consolidate to compete long term with the 3 mega legacies.

You got next week's lottery numbers too?

 

[ClarkGriswold]

Wow he's at it again. Buckle up folks we have a genius in our presence!

 

[Cherokee_Cruiser]

Just personal guesses. Feel free to formulate your own. I was asked my opinion and I provided it.

 

[USN88]

What are you leaning towards @ZapBrannigan ?

 

[derg]

The only person who has called consolidation moves with ANY accuracy is @Maximillian_Jenius. Who I still owe a trip to The Sizzler when I laughed at him when he said NWA and DAL would merge.

Extra garlic buttah I got Benihana issues! #rickross

 

[JEP]

The only person who has called consolidation moves with ANY accuracy is @Maximillian_Jenius. Who I still owe a trip to The Sizzler when I laughed at him when he said NWA and DAL would merge.

Extra garlic buttah I got Benihana issues! #rickross

If you throw enough darts, youre bound to be right at some point.....

 

[Maximilian_Jenius]

If you throw enough darts, youre bound to be right at some point.....

Naw... that one was just glaringly obvious!

 

[Cherokee_Cruiser]

@Maximillian_Jenius what is your take on the consolidation amongst the LCC Majors mentioned a few posts above?

 

[Maximilian_Jenius]

@Maximillian_Jenius what is your take on the consolidation amongst the LCC Majors mentioned a few posts above?

I think that mergers in the LCC industry are inevitable. SWA is now a domestic tour de force. These other smaller LCC's will have to now grow or merge to compete for market share with the animal that SWA has become. I wouldn't rule out any future mergers from SWA, but I wouldn't bet too much money on it. As I don't know who they would/could merge with really.

The majors are all locked up when it comes to mergers. LCC are now the final area within the industry to M&A. It should be pretty exciting to watch.

 

[DE727UPS]

I think SWA has grown beyond a LCC. In the markets I watch they are just as expensive as Alaska. Not that there is anything wrong with that.....

 

[Cherokee_Cruiser]

I think that mergers in the LCC industry are inevitable. SWA is now a domestic tour de force. These other smaller LCC's will have to now grow or merge to compete for market share with the animal that SWA has become. I wouldn't rule out any future mergers from SWA, but I wouldn't bet too much money on it. As I don't know who they would/could merge with really.

The majors are all locked up when it comes to mergers. LCC are now the final area within the industry to M&A. It should be pretty exciting to watch.

Yes, but any particular guesses? Derg is impressed with your guessing abilities so I was curious on what your take is for the LCCs. I already listed mine above

 

[Maximilian_Jenius]

Yes, but any particular guesses? Derg is impressed with your guessing abilities so I was curious on what your take is for the LCCs. I already listed mine above

Honestly, I have no idea. At least at the moment on New Years Eve!

 

[Polar742]

Next one that changes livery...

 

[n77j]

If you are a Lear pilot- just imagine you don't ever have to crawl like a baby to exit the damn cockpit- there is a good incentive to take the new job

 

[ZapBrannigan]

Not to mention the acrobatics you need to perform in order to use the lav in flight. I took yoga for 3 years...

 

[H46Bubba]

I think SWA has grown beyond a LCC. In the markets I watch they are just as expensive as Alaska. Not that there is anything wrong with that.....

As soon as they started serving fortress hubs like PHL, DEN, LGA, and ATL, their model changed from LCC to major airline, now that they're are competing directly in markets served by legacy carriers from those hubs.

 

[KLB]

I believe that SWA will have a strong presence in the Caribbean and Central American market in the next year or two.

 

[ChasenSFO]

I think that mergers in the LCC industry are inevitable. SWA is now a domestic tour de force. These other smaller LCC's will have to now grow or merge to compete for market share with the animal that SWA has become. I wouldn't rule out any future mergers from SWA, but I wouldn't bet too much money on it. As I don't know who they would/could merge with really.

The majors are all locked up when it comes to mergers. LCC are now the final area within the industry to M&A. It should be pretty exciting to watch.

I'll add that I think Frontier will merge, be acquired, or go bye bye in the next 5 years or so. They've already announced they're going to dwindle down DEN and do more point-to-point Allegiant style. Who they will merge with? I don't know. Allegiant is building an Airbus fleet, and the other LCCs that haven't merged (NK, B6, VX) also fly Airbus products. It's anyone's guess right now. But by 2024, the only names I feel confident saying will be around of the aforementioned carriers are Allegiant and Spirit.

 

[Trip7]

I believe that SWA will have a strong presence in the Caribbean and Central American market in the next year or two.

I think American will be continue to rule the Caribbean and Central American markets for premium travelers and frequent flyer markets, while Spirit will dominate the low cost/leisure customers.

 

[ZapBrannigan]

I've met a lot of people who have flown on Spirit. I've never met anyone who has flown on Spirit twice.