Possible, but you have to account for all that debt every airline is accruing now. Yes, those who go chapter 11 will be cheap, but who will be able to afford M&A? We're burning 20 million a day, and even with 15 billion in the bank, we will consume a big chunk of the money. Remember it's not our money, we have to pay it back (with interest). Do you really think that if we survive we will borrow more money to buy a bankrupt airline and attempt a messy and risky merger? These are unprecedented times, nothing that's ever happened in the history of aviation. There is no blueprint for the survival and recovery. Open your eyes people!

 

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.

 

Why would we buy them, especially now?

Suppose the worst happens and they go under, who stands to benefit?

 

I agree. It was more of a comment on how we do have the money. Although I wonder what would be cheaper. 600 million to buy, I know that's not how it works but let's just use their cap as an base point, or how much it costs to flood the market and take their market share?
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.

 

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.

 

I wonder if we could pick up enough 32x NEOs and sims at bankruptcy prices to make it worth the costs associated with operating a second airframe.

 

I think bailing out any airline as a result of current market conditions would be poor use of taxpayer dollars. The airline industry is not the only industry that is hurting and no other industry has received as much aid compared to ours. Allowing capitalism to work as intended - by allowing the market to right-size itself according to demand (survival of the fittest) is what is sadly necessary to allow the survival of most of the industry. Which essentially means the weakest players will not (or may not)
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.

 

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.

 

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.

 

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.