Dragnet

This is just a (credit) revolver. Pretty standard stuff. Think of it as cheap insurance in case something happens that interrupts Southwest's cash flow ... like the FAA grounding all 737s for a couple of weeks.

Every major company has revolvers in place 'just in case'. There are fees that you have to pay to have a revolving line of credit, but it's just an insurance policy that's NEVER meant to be used.

Clear Right

Dragnet,
How dare you bring knowledge and reason to this forum. What would the conspiracy theory pilots do without a crystal ball debate😜 Cue Gloopy in 5,4,3,2,1 on how SWA will never survive without buying JetBlue to get into the New York market. Who cares that they already have the largest presence they ever have had in thier 40 year profitable history. Don't get offended Gloopy, that's sarcasm, just kidding😁

gloopy

lolwut?........

gloopy

No problemo brosephus. Though I never said SW wouldn't survive without JB. Only that in order to keep growing into their obvious manifest destiny they will have to go big in NYC and getting all or large parts of JB is really the only realistic way for that to happen.

FWIW I don't think the line of credit in question is in and of itself evidence for any of this. It will happen though, through one of many potential scenarios, with one or more potential players, all of which seems to lead through LIC one way or the other.

Contrail06

Well you are all wrong...they must be buying Sun Country

27 driver

Does, B6 own anything outright? From my understanding they are totally leveraged. Do they even own 1 airplane?

Clear Right

Yes, I don't know the number, I would have to do some research, but they are paying cash for some airplanes now, as well as investing heavy in corporate real estate. The buzz words at B6 are ROIC, Return on Investment Capitol, basically a healthy balance sheet for the share holders.

Clear Right

All true, and FWIW, your many potential scenarios may come true, hostile takeover, merger, multi-partner break up, sell-off of assets, but JetBlue is doing pretty good and is growing responsibly and profitably. Did you ever think they may just survive as a stand alone, or no??

Dragnet

The answer can be found in B6's last quarterly report. In this case, it will be their 2012 annual report. Found here: JetBlue | Investor relations | Shareholder Information

Go to page 19.
Airbus:
Owned 93
Capital Leased 4
Operating Leased 30
E-190:
Owned 23
Operating Leased 30

They owe money on almost all of their aircraft. Below the chart where I got the above data, there's this sentence:

All but 11 of our 116 owned aircraft and all but nine

of our 38 owned spare engines are subject to secured debt financing.

I don't know how much equity they have in each aircraft; there's probably a decent amount of equity in each owned aircraft.

gloopy

Possible I guess, just doesn't seem probable given the merger mania in general and the fierce sense of urgency for NYC that's been building rapidly over the last decade or so. Ironically thanks in no small part to Jet Blue, although it would also be fair to say it would have probably eventually happened anyway regardless.

In any case JB has something in NYC that DL would potentially like, AA could really use and SWA absolutely has to have and that there is no other conceivable way for them to get, unless they merge with AA or DL, and whatever the chances of that are I think its fair to say SW and JB being in one another's futures appears way more likely.

In many ways it could be good for JB. I just don't see them being able to grow hundreds of airframes to grow "organically" into a massive US footprint, and/or attempting any serious footprint of widebody flying on their own. There is no capacity to grow into without stepping on a lot of toes, and it ain't 2002 anymore. The legacy airlines aren't cowering in the corner gifting capacity as fast as anyone with an order book can fill it. The big 7 are down to the massive 4, are far leaner and IMO way, way meaner, each with significantly fewer competitors and more than enough cashflow to make sure that doesn't happen.