And the new name would be, wait for it…..




​​​​​…..Sunny North Slope

 

Oh man that's gonna be a lot of Airbuses to park.

 

That strategy has allowed Atlas to avoid any serious contract improvements for a decade. Sunny pulls a bait and switch, suckers in some new pilots then guts the new contract by amalgamating it with Alaska's turd.

It really isn't that far fetched. Even if you were just trying to stir the pot.

 

^ this. It might sound tongue in cheek but it's tough to see an AS-B6 merger for several reasons, the least of which being fleet and brand issues. AS is strong on the west coast and Hawaii but B6 is stronger pretty much everywhere east of the Mississippi. AS surpassed B6 in passengers carried starting in 2016, it has a larger fleet, and it flies to more cities than B6 with more frequency overall, but "JetBlue" seems like a more recognizable name both nationally and internationally. B6 has almost 5 times the number of airframes that Virgin America had pre-merger, and their fleet is nearly as large as Alaska's; it was easy enough for Alaska to phase out a few dozen A319's and A320's and keep VX's new A321's but they simply couldn't do that easily or quickly with B6's 280+ bus frames, and it wouldn't make sense from a business perspective to do that anyway.

So does AS pull a Cactus and make B6 essentially Alaska in everything but name, and do they get over their hard on for 737's or do the same thing they did to VX and buy B6 then cannibalize the fleet, the routes and the customer base just to remove a near-peer competitor? My opinion - none of this happens. AS is too risk averse right now and B6 is not the same as VX for many reasons. More likely, AS buys Sun Country, gets an extra 40ish NG's plus some experienced pilots, keeps MSP for now to give OneWorld a larger presence there to compete with DL but gets rid of SY's focus cities, and takes over the Amazon Prime contract flying which might actually mesh with existing cargo/freight operations in the state of AK anyway.

 

I hear this idea fairly often (AS buys someone to weasel out of negotiating a contract because they can use the merger to force an arbitrated JCBA) and it always makes me wonder:

Exactly what impact does the cost of the pilot contract actually have on their bottom line, and is it significant enough to make management pursue a merger that they otherwise wouldn't pursue? My guess is that they wouldn't consider a merger (and all of the associated costs) that didn't offer growth, an edge on competition, or something like that, just to save a few bucks on delaying the pilot contract several years, but I'd love to know how that calculus actually looks. And of course this is the management that overpaid for VX by several billion dollars.

And just because people have been using Sun Country as the example, what does Alaska have to gain from them? ~45 airplanes, ~450 pilots, and a handful of gates in MSP? Frontier just bought almost 200 airplanes plus a hundred or so orders, 3000 pilots, and a nationwide route structure. AS buying Sun Country just seems like a huge waste of time.

 

A potential AS/Sun Country deal is not comparable to the Spirit/Frontier deal. Spirit alone surpassed AS in total pax carried in 2020; a combined Spirit/Frontier will create a formidable airline with a single common fleet type. With that said, they'll still be a ULCC with a different business model. Sun Country has diversified its business over the last decade; it is still a ULCC too but it's also moved into cargo/freight as an Amazon Air operator, and is partially owned by Amazon. Given that Amazon's HQ is in Seattle and that freight dogging has become ever more profitable these days, I think if there's a merger/purchase, AS gains some potentially lucrative Amazon Air flying, a chance to expand its own cargo/freight business, potential investment from cross-town Amazon, in addition to additional NG airframes and pilots and a midwest base (MSP) to compete with DL.

 

Eskimo tried to eat Sunny before dismantling Red. Numb nut Horny-the-toad told this pilot group that there will be a midwest hub by the end of the year. That was before he and his minion were sent away across the street. All this speculation is entertaining cockpit talk but we'll all hear about it on MSNBC if it goes down.

 

None of the above, it’s going to be one of the Big 4…

 

You assume this would be allowed/approved by the US Gov't. Remember the regulatory hurdles and the previously proposed mergers/acquisitions that have failed, especially in the 2000's. There are so many factors that go into these things, but even if you can get everything else to work, the DOJ antitrust anxiety can stop even the most determined merger. Alaska is one of the largest airlines by fleet, pax and destinations. I know many on here would dispute that but from a purely objective numbers perspective, you might not be the big 4, but you're currently somewhere between #5 and #7. The DOJ wouldn't even let B6 get closer to AA without filing an antitrust action last fall; it's not going to let one of the Big 4 buy AS, JB or one of the larger ULCC's right now, especially if there isn't a clear case of networks not overlapping. Frankly, I don't see any of the Big 4 buying anyone anytime soon with debt loads and the antitrust implications; I see the next few years as ULCC and non-Big 4 consolidation. That means AS, HA, B6, G4 and SY.

Think about it. AS is big enough now that it's network substantially overlaps with all of the Big 4, and there would be enormous competition/antitrust implications that almost certainly would not pass DOJ scrutiny. We are in a pandemic, yes, but despite what the MSM is saying, the numbers don't support the type of economic recession or financial pitfalls the industry had when DL/NW and UA/CO merged. I cannot say this in stronger terms - AS won't be merging or purchasing/being purchased by a Big 4 in the near future. If anything happens for AS in the near future beyond more codeshares and "synergies" it will be a merger or acquisition of a smaller ULCC. What does that leave at this point? Sun Country and Allegiant? I brought up Sun Country because there is almost no route overlap, 100% fleet commonality, synergies in freight/cargo and I think Sun Country's partial ownership by Amazon could also be attractive to Angle Lake. I could also see Allegiant and Jetblue merging for similar reasons involving route overlaps and fleet commonality.

 

Can AS afford to go it alone as a long term strategy?