Originally Posted by
FriendlyPilot
This is all I was saying. VX had far less debt than anyone AS would acquire today. VX only had a 1% market share nationally and it cost $3B which doesn't really make it a "strategic" acquisition. It was a defensive one to prevent another airline from buying them.
Fwiw, it was defensive for sure. For context, VX also came with $600m in cash. I believe that the majority of the VX debt at the time of purchase consisted of Airbus leases (lease payments debt equivalent). The remaining preexisting debt that was held by the OG investors in VX had been converted to equity (stock) for taking the airline public in an IPO (similar to what the Spirit bondholders are currently doing with the listing of shares on the NYSE), setting the stage for the purchase. The Airbus leases and their associated equivalent "debt" are long gone off the ALK balance sheet.
The current status of ALK's balance sheet debt is more a combination of the covid period, Boeing Max aircraft purchases (deposits and financing), the HA acquisition and general overall growth. There was minimal debt in 2015 because the airline was operating older aircraft that were not mortgaged. That was not going to last forever, with or without the VX purchase.
I could be wrong, but this is what I recall.
S