Airline M&A: A Bidding War for AS, B6?
 

https://www.barrons.com/articles/air...lue-1525356236

Airline M&A: A Bidding War for Alaska, JetBlue?
Teresa RivasMay 3, 2018 10:03 a.m. ET

Stifel's Joseph DeNardi, for one: He argues that if Sprint and T-Mobile do manage to get clearance from regulators, we could see a deal happen in the airline space.

He writes that the wireless carriers' proposal is the first major test of this administration's view on consolidation. Clarity on that point may be helpful in any number of industries, but it's especially welcome in airlines, a sector that wants to consolidate further but hasn't, given the view that any deal would have a hard time getting past the Justice Department.

However, if the Big Four airlines—American Airlines Group (AAL), Delta Air Lines (DAL), Southwest Airlines (LUV), and United Continental Holdings (UAL)—thought they could get approval from the government to buy smaller airlines, he thinks that a bidding war may erupt for JetBlue (JBLU) and Alaska Air Group (ALK). The competition could make "the Alaska, JetBlue duel for Virgin America look like a used car auction," says DeNardi. Moreover, there isn't any takeover premium in either JetBlue or Alaska's share price at the moment.

Of course, there are plenty of moving parts and no deals (that we know of) are in the works at the moment. DeNardi writes that the current industry consensus is that Alaska "will serve as buyer and consolidator within its segment of the market—which would include itself, JetBlue, and Hawaiian Holdings (HA), while Spirit Airlines (SAVE) will consolidate the ultra-low-cost carrier space over time (3-5 years)."

Eventually, the industry would shake out to include the Big Four, along with Alaska in some form, which may include JetBlue and Hawaiian, and Spirit, again in a form that may include Frontier Group and Allegiant Travel (ALGT). Yet that consensus could shift rapidly if the Big Four believe that they could become buyers, and Alaska may find itself a target.

There's also the chance of interest from outside the industry as well, as Warren Buffett may be on the hunt to buy an airline.

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The big four might surprise you with who they buy. The article doesn't seem to consider the fact that the bigs might buy smaller majors for gates and even pilots.

If AA wants more cultural toxicicity with everyone hating management they need look no further than B6!

I hear often guys I fly with that say oh the DOJ would never allow that..

I call BS , the DOJ are for sale just like any division in our government . The are *****s like the rest of us, money shapes the outcome of everything .

I don't think it's likely but der not impossible .

A couple of suite cases filled with cash and Maserati's in the driveway and boom you have an approved airline merger .

I could see a scenario where there is an economic downturn and airlines use financial losses as an excuse to consolidate. Follow the history of any airline that has been around for a few decades. Mergers are inevitable. It's not a matter of "if" but "when".

Considering that American, Delta, and United would have to give up gates with any acquisition, I don't see that as a viable option for them. There have even been times in the past where the DoT has taken away gates from the 3 legacies even without a merger.

Southwest may be able to get away with another merger, but I don't think that the other 3 can pull one off without a lot of required divestitures.

Depends on where and how many. Might be willing to give up some, to make gains elsewhere.

I think the major mergers are done.

I doubt the govt will allow any one Airline to control an even higher % of the market.

I wouldn’t be surprised if maybe Alaska or Jet blue bought frontier or spirit though.

I think there's at least one more merger... United is gonna run into growth problems due to low hiring over the last year and they're gonna buy Frontier or Spirit just for their pilots.

Well, since United's more short on 737 FOs than 320 FOs, we might as well just buy Southwest. :rolleyes:

The big four control 80%, in very roughly equal shares.

The rest are fighting for scraps of the remaining 20% and will eventually all get crushed by economy of scale (and variety of uses for mileage points) if they are not allowed more mergers. There's probably room for one or two small niche ULCC to haul the trash that nobody else will touch.

United to buy Sun Country! First!

1500 pilots vs. 10000 pilots... Not sure there's much room to compare there. 1500 pilots all at once would sure fill a 1.5 yr hiring gap, even if many would or could bid for a new type right away.

United retired an entire fleet - the 747 - during that 'hiring gap'. In addition, there were furlough returnees AND there has been hiring. I don't know where you came up with this 1.5 year hiring gap. You've got bad information. Besides, this is a pretty brain dead topic - it's extremely unlikely that United is going to buy another carrier any time soon.

T-Mobile and Sprint merging is more like Alaska and JBlue merging.

Mostly it's funny that you're taking it so seriously. Poking fun at merger rumors and coming up with marginally believable background justifications is traditional fun.

Also, did you hear that American is going to buy Hawaiian because they can't risk letting SWA win another market? AA/Hawaiian will fly empty if necessary to preserve the routes. That's what I heard anyhow.

See? It's funny, smile.

I can see Delta buying Hawaiian
330s
And they regret not getting the 787


It’s only 2 months of the profits from 2018 and Hawaiian is part of delta

Don't quit your day job.