F9/NK rises like a Phoenix
 

https://www.ch-aviation.com/news/146025-frontier-exploring-new-bid-for-spirit-airlines-report


Frontier Airlines (F9, Denver International) is considering making a renewed bid for Spirit Airlines (NK, Fort Lauderdale International), according to the Wall Street Journal, which reports that new merger discussions are at an early stage and that a deal may not materialise.

Citing "people familiar with the matter," the WSJ said that if a deal is reached it would likely be part of debt restructuring during a potential Chapter 11 bankruptcy protection procedure. Spirit has struggled to turn a profit recently and is reportedly discussing strategies with bondholder advisers to address upcoming debt maturities, including possible bankruptcy protection.

If this happens ol’ Blue will be one of the last small fish swimming in a big sea. Hopefully the east coast airports don’t sink below sea level anytime soon.

We spent half a billion dollars failing to get Spirit. We end up weaker as a result, trying to save cash, shrink to profitability, downgrades, displacements and in the end Spirit may end up bigger and stronger than us if they hook up with F9. I geniunley don't see how we do much of anything unless someone buys us or wants to merge with us at this point.

Maybe if we double the offer we’ll get em this time. What else are we to do with the money we raised recently. In all seriousness, our management is too in luv with the company to see someone else come in. Have I seen changes, yes. Though not enough to give us that competitive edge edge today and what would be the post merger environment of both ULCCs and AK/HA.
What makes me laugh is the breakdown of the dollar they show us. The first bit is wages and salaries and what they brought up but what about the 26% in “other” expenses. If I were to reduce costs I think the rather uncategorized portion is where I’ll take a look at first.

Agreed, but we need to wait a few years for AS/HA to settle down and SWA to stabilize with their activist investor. Also need to show we can actually make profits (on a smaller route structure than before) and then we might see a merger.

Nightmare scenario is the profits never materialize and/or SWA merges with AS, once again leaving us without a dance partner with less and less relevancy in our “core” markets

https://media1.tenor.com/m/PCwodPZcP...lee-wilson.gif

I mean I don't disagree with what you said, but at the same time NK's (and the current ULCC market) current problems aren't going away anytime soon with a combined F9/NK.

This is my biased opinion talking, but we're on too similar a path with AS/HA for it to not make sense. SWA barely wants to do assigned seating.

the real question is, are JB’s problems going away anytime soon?

Everyone is waiting for your answer.

^^^This^^^ It’s only a matter of time before AS/HA/B6 merge (if F9/NK merge). It may also be dependent on the next administration;), and of course the C-Suite ego’s on which brand name survives/rules. But I have a feeling the B6 C-Suite would be forced to take a back seat to AS leadership.

The only wildcard might be for a couple of activist investors to force a WN/B6 merger to force B6 to larger scale, and bring WN into the next level of premium offerings, trans-Atlantic, and fleet diversity with all of Boeing’s issues.

Will be an interesting few years to say the least.

Why do we “need” to show we can make a profit? NK and HA didn’t have to do that.

Fair point, that’s more of a management/shareholder concern so we can get a better price in the merger and/or the JB C-suite can have a job in the new company.

Don't know who they is, but they'll be waiting a while. I just fly planes

F9 and Spirit need each other. I feel bad for what Spirit has been put through. I could give 2 sh!ts about Frontier. If that merger was approved, it would certainly pave the way for an LCC merger. Consolidation to scale is going to be necessary going forward. There's just no getting around that.

Huh? How do we need each other? Our financials come out this week, and we are going to show some decent results. I know, I know... we look the same on the outside, but I can assure you we are VASTLY different airlines on the inside.

He's saying you need economy of scale going forward to compete against airlines which have 1000 planes. Just like the rest of us.

https://www.justice.gov/opa/pr/justice-department-and-department-transportation-launch-broad-public-inquiry-state

YOU SHALL NOT PASS!

Man… what the F

. I think the former leader at JB pi$$3d in someone’s cheerios.

Quite possible. I was thinking Buttigieg wants to make a name for himself for another presidential run in 2028. Hedging his bets by making moves now vs after Election Day.

What a colossal waste of taxpayer money.

I'd agree with this. If F9NK happens, they will be around the size of B6. This is not considering:

1. The reductions NK is doing with selling airframes to raise liquidity, mostly recently the announcement of selling 23 more frames today.

2. The attritions at NK that are waiting to happen as soon as the other guys start pumping up hiring again.

3. The unfortunate furloughs(hope this turns into just attrition to the legacies).

It also depends on what is done with the future airframes on the order book for F9 and NK. But either way, the combination wouldn't even be big enough to trouble SWA. That's just how big UAL, AA, DAL, and SWA is. Which is why I agree with GrayFlyer statement.

What are the current number of airframes at F9 and NK and what does the future order book for both look like? I remember some deferment happened at NK for airframes. Only looking at APC numbers, I came up with under 300 airframes combined between F9 and NK(subtracting the 23 airframes[does this include some 319s?] from NK and their 319s).

As of today, B6 is a little over 300 airframes. I didnt subtract AOG from any of the 3 mentioned Airlines for Neo issues. Majority of our (B6) 321neos has been deferred to 2029. We will only be getting A220s (27 this year, roughly 20 each year afterwards) and about 5 321 neos next year (2 of which is XLR). We will still net a slight growth in airframes each year as we get rid of the 190s (by Sept 2025), but not too big.

I have a feeling you're right. While I think the HAL acquisition was a good business call (risky but necessary to bulk up to avoid getting squeezed out in the long run) it's also partly a vanity project for the AS top dogs. They didn't put themselves in charge of a (partly) global airline just to hand the keys over to somebody else (they're young).

Adding B6 to our mix would certainly improve our critical mass, and long-term ability to swim in the deep end with the big four, but our leaders would probably consider it a "nice to have", not an existential survival need. So they could probably take it or leave it, at least as things stand now.

I suspect this will be a last gasp of the activists currently installed at DOJ and FTC. They'll be out if the election doesn't start heading their way, only a few days to go.

High fares are probably due to inflation, labor getting paid more, and lack of NB capacity due to boeing.

During the NK/JB court hearings it was stated that JB was considering F9, NK, AS, and one unnamed carrier for merger partners. The rumors goes that AS and JB leadership couldnt agree on who would ultimately be in charge, where corp HQ would be, surviving brand, etc. Nobody wanted to give up the reigns... I think now JB has been humbled a bit and has an activist sitting on the BOD to keep them in line. Maybe we will see the AS/JB in a few years when things settle down

Forget AS at this point. You all couldn't agree on who would run the combined Airline anyway. Why not wait for F9/NK to shake out and then merge with them? Full Airbus fleet and a balanced domestic route network spread evenly throughout the country. AS/B6 would be a barbell network. Strong on the opposite coasts without much of anything in the middle of the country. It would be too reliant on transcons only and that's not sustainable against the Big 4 IMO.

I could see that, assuming F9/NK happens and they move upmarket with the onboard product. Otherwise we'll potentially be back where we started with JB trying to merge with a sacred ULCC and get shot down by the court. Either way, probably 3yrs before AS or F9/NK would be ready to dance.

We heard that too.

AS has regional feed, which can help with the flyover states. In a hypothetical merger the unions would have to consider whether it might be in everyone's best interest to allow *proportional* growth of the RJ feed to help flesh out the lower density states.

While there was some hope that the regionals would fail and it would all go in-house, the legacies bent over backwards to keep them on life support for better days, so low cost outsourced feed is just a business reality in the competitive landscape going forward.

I've been saying this since Elliot got their hands on WN. It would make perfect sense for them to be able to get into the europe/carribean market, get Airbus order slots (320, and 220), bake "mini mint" into their newer 73's on certain routes to test out the demand, and or move B6's mint product to some routes that they know would have demand for premium products short term. I think B6 has everything they need.

HNL, ANC, SEA, PDX, LAX (both), FLL/MCO, BOS/JFK for a combined network carrier hub couldn’t even try and establish 1 (dare I say 2) hub in between? What is the economic mountain that makes that unfeasible? ORD, AUS, CVG, MCI, STL all seem feasible.

I agree, but might need RJ feed to bring in the low density market in places like that.

Maybe someday, right now their management team is a clown car trying to fend off a hostile takeover of the BOD.

Hard no. There's a reason I want nothing to do with AK and it's because of how many RJs they use. Lots of Skywest 175s doing flights that should be Alaska metal with Alaska pilots.

I've wanted an HA/B6 merger since the day I got here. Asia/Pacific/West Coast access and we can give East Coast and Europe access. We have the planes domestically, they have the heavies for longer haul.

NOW your list is complete. ;)

If an ASB6 happened yesterday and the surviving entity is AS, does anyone think AS mgmt would have the same mantra of ALL BOEING and parking over 300 B6 Airbus like they did with VA? I don't think so since that would be massive and quite crazy but still want to hear other opinions

How about east coast base closures?
Just hypotheticals.

How does the overlap look for B6WN routes?

Very minimal. B6 does lots of longer stage lengths and NE concentration. Two things SWA doesn’t focus on

At that large of an airline it really becomes a risk to have 100% in one fleet. I think a 50/50 mix makes sense. Yes, SWA does it but I think that’s borderline crazy too.

Base closures? I think EWR, SJU and maybe MCO would go away and turn them into just large outstations

Also since we’re tossing around crazy ideas let’s not forget the B word. No, not bankruptcy… Breeze

hmmm....how does Breeze get into the mix?

Yes, Horizon. I understand your point, but I don’t understand the reluctance of either carrier stand alone or combined being afraid of starting a base geographically further from their fortress hubs when they already fly in said directions. Alaska flies east of Cali and JetBlue flies west of the Mississippi.

In a year or so we’ve hopefully shown some profits and are ready to grow again. Breeze in the meantime has run out of cash and their hedge fund backers want to get paid. JB buys Breeze, touts the redemption arc for Neeleman returning to JB to invigorate the company and help rebuild our *barf* culture *barf* while he sits on the BOD.

We get a load of 220s, keep some of their smaller bases, expand along the east coast to secondary cities. JB has good brand recognition in most of the Breeze hubs already, but little variety/frequency of service