Seggy
Well-Known Member
Stop thinking like that.
Think Wall Street and Investment Banks. A ton of money is made by mergers for them.
Let's take bets. Who will Blue merge with?
- Thread starter PhilosopherPilot
- Start date
Stop thinking like that.
Think Wall Street and Investment Banks. A ton of money is made by mergers for them.
Cptnchia
Dissatisfied Customer
No offense, but we already fly to more places in the Caribbean than Jetblue. If anything, it would be to reduce capacity by taking out a competitor. And other than JFK, what slot controlled airport does Jetblue fly to the we need slots to? Never say never, but a Delta/Jetblue merger makes absolutely no sense. There would be too much divestiture in the NYC market to make it worthwhile.
Which means some Wall Street money hooker is feverishly working on how to convince people it makes perfect sense.
Baronman
Well-Known Member
Just eyeballing by # of stations it looks pretty close. I see plenty of stations it looks like B6 is in that DL isn't...Ponce, Aguadilla, Port of Spain, Samana (DR), La Romana (DR), Puerto Plata (DR), Cartagena and now Curacao.
Most others we're both in except B6 isn't in St Kitts/Grenada/Bonaire.
So...no offense taken.
Seggy
Well-Known Member
I do believe that your management believes that and will try to make that happen. However, Larry Kellner and Gerald Arpey were telling their troops the same thing.
Folks, I can't emphasize enough on how much Wall Street and investment banks control over the airlines. They make a ton of money with mergers. More consolidation is coming.
Baronman
Well-Known Member
You're probably right. I think people discuss B6 just because we haven't merged and we're in that size range where it doesn't put up immediate red flags from regulators. AA/UA/DL/SWA are all much larger...The next two, B6 and Alaska have about 5% and 4% of the market respectively.....From there you really get into much smaller carriers.
SmoothLanderJ
Well-Known Member
Seggy said:
Thats fine, but it doesn't mean it will involve us. I guess time will tell if your crystal ball is accurate.
PhilosopherPilot
Well-Known Member
The people I've talked to recently think it's inevitable that a merger will happen, but nobody wants one. But there's lots of anticipation/speculation that the new CEO and recent stock jump are indicative of something in the works.
kellwolf
Piece of Trash
Really? 'Cause the stock jump seemed to coincide with us giving Wall Street what they wanted: bag fees for the lower tier fare family and more seats in the A320. I'd say that had more to do with the stock bump than any merger talks. It may be inevitable, but I think our plan going forward has a better chance of us staying independent than our previous trajectory did. With the current plan, people are actually buying into the fact we can hit our ROIC targets, which is what the investors really care about. If we couldn't hit those targets (and we couldn't the way we were going), they'd be happy to cut their losses in a merger/stock buy out/whatever and walk away rather than hear "Really, we'll do it this year." I think the plans unveiled at Investor Day were a pretty good compromise between what Wall Street wants us to do and keeping it quality for the customer.
Personally, I think we have a lot of doom and gloom type personalities when it comes to mergers. They think management is buttering us up for a roast because they don't trust what they're being told. Given the track record, I can't really blame them. I think the new blood at the top will help change some of that, and I actually REALLY like the financial plan going forward. I was impressed how they deferred aircraft to offset the costs of re-furbishing the A320 interiors. And the didn't defer ALL the orders for those years, either.
I may complain and moan about it, but when it comes down to it as long as I'm not taking a pay cut in the deal or being forced back into commuting, I probably won't care too much with a merger. If I'm on reserve as an FO in MCO until I retire, I can deal with that. If I have to wind up commuting to ATL, I'm gonna be a miserable, miserable person to be around. Driving to work at a major has SERIOUSLY spoiled me, and I'm not ashamed to admit that.
Baronman
Well-Known Member
In the greater context of the market the stock is up (as are most) and did a little better than the sector last week by a few percentage points after the investor day announcements. But to speculate that a really small blip on the stock price is indicative of something other than investors being positive about greater returns is stretching it.
PhilosopherPilot
Well-Known Member
The sense that I've gotten is that people feel the merger is inevitable not because of the stock price, but rather because we are so very unlikely to remain independent over the next 20 years. The latest changes in management and internal structure just make people antsy.
At any rate, I wonder about it often. I was at ASA during the ExpressJet merger and was on the single operating certificate team. I will die happy if I never do that again.
kellwolf
Piece of Trash
If these guys are worried about what's going to happen 10-20 years down the road and feel they have a grasp on the situation, they need to go buy lottery tickets. I can't even tell you what the airline industry will look like in 20 years. If cabotage rules get re-written, every airline might be a state run airline anyway. Who knows? Regulation could come back. And earthquake could break CA off the coast. Florida might split into two different states. Democrats and Republicans might agree on something. The people that feel a merger are "inevitable" are probably the same ones that check the seniority list weekly to see where they're gonna be when they retire. If they're putting that much stress on themselves, I hope they're senior to me because they'll probably medical out before I do.
HJB
Well-Known Member
Southwest wouldnt be that bad...
http://money.cnn.com/2014/11/18/investing/southwest-airlines-best-stock-2014/
http://money.cnn.com/2014/11/18/investing/southwest-airlines-best-stock-2014/
e6bflyer
Well-Known Member
I think that the writing is on the wall for Blue. They are essentially asking to be merged. They are curbing their aircraft orders (slowing growth and shedding expenditures), increasing their revenue through the pricing structure, losing their CEO, and generally making themselves the sweetest looking peach on the investor tree. I would be very surprised if in 5 years they still exist as they do today.
I personally would be very surprised if SWA attempted another merger. Gary is looking to squeeze every ounce of ROIC out of the existing fleet size and cost structure. Adding that level of complexity right after wrapping up the messy airtran merger would not be his style. As much as he has destroyed a lot of employee goodwill and diluted the SWA brand, he does love this company and is fiercely loyal to it. I seriously doubt he would do anything that rash. In a few years? Maybe. The big 3 would surely be blocked by the DOJ. Who does that leave? Republic, Indigo, Hawaiian, Alaska, and foreign buyers. If that does happen, I think you will see Blue continue to operate as a brand and lots of "synergizing" by management to keep costs down while still offering a premium product.
I personally would be very surprised if SWA attempted another merger. Gary is looking to squeeze every ounce of ROIC out of the existing fleet size and cost structure. Adding that level of complexity right after wrapping up the messy airtran merger would not be his style. As much as he has destroyed a lot of employee goodwill and diluted the SWA brand, he does love this company and is fiercely loyal to it. I seriously doubt he would do anything that rash. In a few years? Maybe. The big 3 would surely be blocked by the DOJ. Who does that leave? Republic, Indigo, Hawaiian, Alaska, and foreign buyers. If that does happen, I think you will see Blue continue to operate as a brand and lots of "synergizing" by management to keep costs down while still offering a premium product.
Ecl!pse
Well-Known Member
Keep in mind, all of the initiatives you mention above to "sweeten the peach on the tree" actually make the enterprise as a whole more valuable, and hence more expensive to acquire. JetBlue was a much, much easier acquisition target pre-June 2015, when the stock traded at a significant discount (from a valuation multiple) to the rest of the industry. If you were an owner [shareholder] of the company, you likely weren't getting the same return on your investment as folks that poured money into DL, NK, LUV, etc. If the company was not going to change direction, the only way to really recover your capital would have been a sale. Instead, the company has taken some actions to improve returns for its owners, making a true "sale" slightly more difficult - the business case to buy has changed drastically now that the company is more expensive, and any new owner will have to justify how spending the capital will improve their returns. Not saying it's impossible, remotely - but by doing the initiatives announced last week, they certainly aren't laying down and doing future buyers any favors.
sorrygottarunway
Well-Known Member
I am thinking 'JetBlue by Emirates'
Etihad did that in Swtizerland... All of a sudden "Etihad Regional" landing in Zurich.
Cherokee_Cruiser
Bronteroc
As @Seggy said, what Wall Street may want.
I can think of reasons. B6's weak presence on the west coast compared to east coast, and vice versa for VX. Similar fleet, similar inflight goodies, similar focus on customer service. Two big reasons are one less competitor on the LCC level and a better chance to compete with the 3 big boys. IMO you won't see a LCC merger until the AA/US merger and integration is complete and they become a lean mean machine. Once you have DL, AA, and UA in full force with all integration complete, the LCC-level airlines will have to consolidate to better compete with the legacies. I would bet on Virgin and jetBlue ; Spirit and Frontier.
kellwolf
Piece of Trash
Honestly, I don't see this as "slowing growth." It's more of an "offset the cost of refurbishing the A320 interiors." If we were slowing growth, we would have deferred all the orders in that time frame. We deferred 18 planes 2016-2018. We're still taking 39 between 2015-2018. Personally, I think taking delivery of 57 airplanes in a 4 year span might be a bit TOO aggressive in the first place.
falconvalley
Absentee Dad of the OOTSK, Runner, Cat Frustrator
Does your JB CEO often come on to TV to talk about stuff? He was on a financial news channel last week.
Baronman
Well-Known Member
Dave Barger frequently appeared on broadcasts...He's fairly well spoken and personable and probably appealed to a TV audience. If it was our next CEO Robyn Hayes (he's got a British accent), I dunno....I haven't seen him *yet* doing TV but maybe he'll pick up the reigns where Dave left off. Robyn though seems less of the TV type.
falconvalley
Absentee Dad of the OOTSK, Runner, Cat Frustrator
Whoever it was, came on to one of the financial channels and was doing Q&A about the new bag fees and basically saying the ticket pricing structure is proprietary. It seemed like a lot of effort for just adding bag fees. The fact that he was on a financial channel kinda hit me as purposeful. Reminded me of those report conference calls.