We’ll probably have pulled the trigger on an M&A by then. Make sure you factor that into your projections.

 

The problem with the lengthy upgrade time here is reflected over on the 2019 earnings thread. Even places like Spirit, Frontier with 3-6 year Captains earn more - sometimes substantially more - than a 6 year FO here. So while the forum warriors that bleed Canyon Blue would say “they’re hiring, don’t let the door hit you on the way out”, the reality is that the delta (no pun intended) just grows year over year. So even if the WN Captain pay is higher it will take a substantial number of years for the WN pilot to catch up in total earnings with those Spirit, Frontier young captains, and during that period the time value of their money has a multiplier effect.

Lacking the glamour of the big 3, I can see potential recruits seeking out those airlines with quicker upgrade opportunities simply because of that math. During the run up to the 2016 contract SWAPA pointed to attrition from the bottom. I hope that this time they’ll draw attention to the recruiting challenge resulting from the comparatively young pilot group with modest growth.

Not being negative, just making sure applicants are comparing apples to apples and not relying on decades old mythos about the airline.

 

So whose stock should I buy?

 

If I knew that, I wouldn’t be working here. I’d be a rich portfolio manager for an investment bank. If I had to take a guess, I would say somebody with a lot of Airbii on order.

 

Thank you, wise advice.

 

God I hope not. Even so, it’d likely be for fleet diversification. So that’d mean a fence for at least a couple years. I’m guessing the Max will be airborne by summer and everything will be working toward status quo. No M&A until a recession hits and the price gets cheaper.

I can see NK and F9 merging: same product, fleet, contract.

Leaves Allegiant, Alaska, Hawaiian and JetBlue. I think AK is too expensive after the Virgin deal. Allegiant is too small to matter significantly. Hawaiian maybe if they were seriously wanting WB. B6 could be a good fit route wise but I think it might be like trying to mix oil and water....I wouldn’t turn down a STT overnight though.

 

I would normally agree with you about waiting until the next recession, however, I think the longer the MAX is out of service, the more likely WN will have no choice but to move up their next M&A event. I would guess sometime in the next 12 months.

 

I sincerely doubt it. Gary answered this question by posing a hypothetical... suppose we split the fleet between Airbus and Boeing and one gets grounded, are we better off having a split fleet? Either way it’d be devastating...

Next time you fly through HOU, check out our new hangar on the SW side of the field. That hangar way taller than necessary for a MAX or even any narrowbody plane.

 

I just don’t see it. If the plane were to be scrapped, sure. But there’s no indication of that. A M&A is a long term fix to fill a need. The Max is a short term problem that should be solved relatively soon. Eventually, we’ll need another type as the Max is prob the last iteration of the 737...I’d prefer the organic method of growth by placing a order and building a type program while we wait for delivery.

With the amount of time it takes to merge 2 airlines, and the timeframe to see the merger payoff....that Max will be doing its thing long before then. There’s no immediate benefit to SWA buying someone. You’ll still be getting LG bars. Trips will still be screwed up. Premium won’t be coming back overnight. Unless I’m missing something....

 

Agreed the Max will be resolved sooner than a merger.

Don’t forget a junior upgrade has benefits in a health crisis—sick pay is paid out at CA rates....