Southwest to purchase the Delta Shuttle?
11-21-2006, 02:54 PM
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Southwest to purchase the Delta Shuttle?
Southwest might buy assets if US Airways, Delta merge
08:11 AM CST on Tuesday, November 21, 2006
By MARY SCHLANGENSTEIN/Bloomberg News
Southwest Airlines Co.'s chief executive said the low-fare carrier would consider buying gates, planes and other assets sold in a merger of US Airways Group Inc. and Delta Air Lines Inc.
Chief executive Gary Kelly said Monday that Southwest chairman Herb Kelleher called US Airways CEO Doug Parker and Delta CEO Gerald Grinstein to convey the airline's interest.
Landing slots at New York's LaGuardia airport might be among the targets, he said.
"We would be very interested in any assets that are divested," Mr. Kelly said. The East Coast "is our least-developed region and where we are trying to grow and have had a lot of difficulty gaining access to markets."
Mr. Kelly's comments positioned Southwest among the potential bidders for assets that might be sold as part of a US Airways-Delta merger, which Atlanta-based Delta agreed to consider after originally rejecting the idea.
In disclosing its $8.7 billion offer for Delta, US Airways said that it would sell either its own Northeast shuttle operations or those of Delta if the merger is completed.
"We expect that a number of airlines, including Southwest, will be interested in that asset," US Airways spokeswoman Andrea Rader said.
Delta had no comment on Mr. Kelly's remarks, a spokeswoman said. U.S. antitrust regulators would determine whether to order any other asset sales from a US Airways-Delta tie-up.
US Airways and Delta carriers are cutting capacity, while Southwest continues to expand.
Southwest is adding 36 aircraft this year to boost capacity 8.8 percent and plans to add 37 more in 2007.
"We're an airline that is continuing to grow, and we are well-positioned financially," Mr. Kelly said.
Southwest had $2.3 billion in cash and short-term investments at the end of September and $600 million in available credit.
Serving LaGuardia would be a departure from Southwest's usual practice of avoiding airports where traffic delays might disrupt the goal of keeping planes on the ground no more than 25 minutes between flights.
Takeoffs and landings are limited at LaGuardia, and another airline would have to cede some of those slots for Southwest to consider flying there.
"If those assets become available, then we would have to study that and reach a conclusion," Mr. Kelly said. "That would be the cause to give it a serious look."
A combined carrier also might have to sell slots at Ronald Reagan National Airport in Washington. Southwest has flights at Dulles International Airport in Washington and nearby Baltimore/Washington International.
Southwest has eight gates in Philadelphia, where US Airways has a hub, and is working with airport officials on ways to secure more.
A proposal from Philadelphia International Airport involves moving four Delta gates to an international terminal.
"Four more would give us a nice increase in capacity," Mr. Kelly said. "Beyond 12, I don't know. I'd rather not put a limit on how many gates we could get."
Shares of Southwest fell 12 cents to $15.71 Monday.
08:11 AM CST on Tuesday, November 21, 2006
By MARY SCHLANGENSTEIN/Bloomberg News
Southwest Airlines Co.'s chief executive said the low-fare carrier would consider buying gates, planes and other assets sold in a merger of US Airways Group Inc. and Delta Air Lines Inc.
Chief executive Gary Kelly said Monday that Southwest chairman Herb Kelleher called US Airways CEO Doug Parker and Delta CEO Gerald Grinstein to convey the airline's interest.
Landing slots at New York's LaGuardia airport might be among the targets, he said.
"We would be very interested in any assets that are divested," Mr. Kelly said. The East Coast "is our least-developed region and where we are trying to grow and have had a lot of difficulty gaining access to markets."
Mr. Kelly's comments positioned Southwest among the potential bidders for assets that might be sold as part of a US Airways-Delta merger, which Atlanta-based Delta agreed to consider after originally rejecting the idea.
In disclosing its $8.7 billion offer for Delta, US Airways said that it would sell either its own Northeast shuttle operations or those of Delta if the merger is completed.
"We expect that a number of airlines, including Southwest, will be interested in that asset," US Airways spokeswoman Andrea Rader said.
Delta had no comment on Mr. Kelly's remarks, a spokeswoman said. U.S. antitrust regulators would determine whether to order any other asset sales from a US Airways-Delta tie-up.
US Airways and Delta carriers are cutting capacity, while Southwest continues to expand.
Southwest is adding 36 aircraft this year to boost capacity 8.8 percent and plans to add 37 more in 2007.
"We're an airline that is continuing to grow, and we are well-positioned financially," Mr. Kelly said.
Southwest had $2.3 billion in cash and short-term investments at the end of September and $600 million in available credit.
Serving LaGuardia would be a departure from Southwest's usual practice of avoiding airports where traffic delays might disrupt the goal of keeping planes on the ground no more than 25 minutes between flights.
Takeoffs and landings are limited at LaGuardia, and another airline would have to cede some of those slots for Southwest to consider flying there.
"If those assets become available, then we would have to study that and reach a conclusion," Mr. Kelly said. "That would be the cause to give it a serious look."
A combined carrier also might have to sell slots at Ronald Reagan National Airport in Washington. Southwest has flights at Dulles International Airport in Washington and nearby Baltimore/Washington International.
Southwest has eight gates in Philadelphia, where US Airways has a hub, and is working with airport officials on ways to secure more.
A proposal from Philadelphia International Airport involves moving four Delta gates to an international terminal.
"Four more would give us a nice increase in capacity," Mr. Kelly said. "Beyond 12, I don't know. I'd rather not put a limit on how many gates we could get."
Shares of Southwest fell 12 cents to $15.71 Monday.
11-23-2006, 04:47 PM
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Originally Posted by 757Driver
CAL holds all the leases on USAir's operation at LaGuardia so I'm sure they would have a say-so in the matter.
11-23-2006, 06:09 PM
#5
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i just thought this was funny (a poll about the usair/delta merger)...
the link might show something else, but right now there are thousands of votes and it is split 50/50...
http://forums.wsj.com/viewtopic.php?t=99
the link might show something else, but right now there are thousands of votes and it is split 50/50...
http://forums.wsj.com/viewtopic.php?t=99
11-24-2006, 04:50 AM
#6
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Posts: 463
Originally Posted by BCDurbin
That's the first I have ever heard that! Anywhere I can get more info on it? Is it just the mainline gates or Express too? - BCD
But I can't recall how many total gates but it is significant. I think 15 or so.
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