Why so much cash?
#121
Gets Weekends Off
Joined APC: Dec 2010
Posts: 353
Serious answer. No where did I imply that this would happen soon. While things could get A LOT more grim before they improve, they WILL eventually improve and I'm not going out on much of a limb by saying SWA will be one of the survivors. When the industry has regained it's footing and a recovery has begun, THEN you can expect an acquisition. Clear as mud?
#122
Hawaiian's market share is about how much we are going to save going from cost index 20 to 15. I think they can afford it if they want.
#123
Gets Weekend Reserve
Joined APC: Jul 2007
Posts: 3,565
#124
I dont wish anyone out of a job but I'm curious as what would be cheaper. I'm sure the guys in the room know the exact number.
#125
My guess is everyone wants to hold their cash until this thing gets resolved. The only way I can see a purchase or merger would be one of the four big PAX carriers buying a small fish to save it from liquidation. Or then again, it may be easier to pick up the pieces after liquidation. Either way, it would be for a fire sale. Don’t see any of the big four being permitted to go under. Too few majors for the government to let one go away.
#127
Line Holder
Joined APC: Jul 2017
Posts: 27
My guess is everyone wants to hold their cash until this thing gets resolved. The only way I can see a purchase or merger would be one of the four big PAX carriers buying a small fish to save it from liquidation. Or then again, it may be easier to pick up the pieces after liquidation. Either way, it would be for a fire sale. Don’t see any of the big four being permitted to go under. Too few majors for the government to let one go away.
make it out of this. The loss of any major airline hubs will be quickly replaced with capacity by surviving competitors. Not to mention, most if not all current major hubs already have adequate service for O&D traffic aside from the dominant hub carrier.
#128
Line Holder
Joined APC: Jul 2017
Posts: 27
One thing to also consider in all of this. When looking at countries that had a faster and better coordinated response to covid while conducting thorough national contact tracing... some of these countries reopened to still very depressed economies. So they’re *still* struggling economically under a best case scenario while also dealing with new outbreaks. Our country is so much bigger, and our response to covid - well, it wasn’t good enough. Safety measures like masks and physical distancing should have been implemented from day 1 to mitigate the spread. Then perhaps we wouldn’t have been in *as bad of shape.* Our economy (and industry) still has a long way to go before improving. The decline we are seeing is only just beginning. Just wait until the housing market crashes, evictions become commonplace, and travel restrictions in states like Hawaii continue to remain strict. The demand for passenger airline travel will remain depressed for quite some time and our industry has way too much capacity for all the competitors in the market. People’s spending habits and attitudes toward discretionary spending for leisure travel have shifted and will continue to grow towards a saving type of mentality, so there will not be enough room for all existing airlines currently operating. We haven’t even begun to see the beginning of the fallout.
#129
Gets Weekends Off
Joined APC: Jan 2017
Posts: 223
In short, it’s a wait and see. Musical chairs if you will. Too many people walking he line and not many chairs right now. Airlines are in survival mode. The strategy at SWA (just a guess) is to tighten the belt, and stock pile cash, so to be in the best position when the time to pounce happens. Nobody knows when that time will come. Some will fail, others just hang on by a thread and some will be in a position to at least get creditors to borrow them more money.
#130
If the government lets it go to Chapter 7 liquidation bankruptcy, who would they let go bankrupt? First one to court? Last one to court? Forced government decided mergers? Going down to one carrier? Just would not happen.
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