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Old 05-03-2018, 08:27 AM   #1  
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Default 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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Old 05-03-2018, 09:57 AM   #2  
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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.
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Old 05-03-2018, 03:37 PM   #3  
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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!
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Old 05-04-2018, 07:06 AM   #4  
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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 .
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Old 05-04-2018, 08:12 AM   #5  
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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".
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Old 05-04-2018, 10:11 AM   #6  
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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.
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.
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Old 05-04-2018, 10:30 AM   #7  
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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.
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Old 05-04-2018, 11:23 AM   #8  
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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.
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Old 05-04-2018, 01:34 PM   #9  
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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.
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Old 05-04-2018, 02:00 PM   #10  
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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.
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