Huh? In what universe is this true?

 

This universe according to PANYNJ stats.

 

If by NYC you mean JFK/LGA - the airports in New York City - then UA is not even close to AA/JB.

Are you including Newark? I’ve read many posts by your colleagues on here that assert EWR is definitely not the same market as JFK/LGA and that’s why UA can definitely just swoop on in and pick up gate space if a theoretical JB/UA merger happens.

Which is it?

 

You forgot to include TEB, which is Kirby's favorite in the area.

 

So…… in this hypothetical merger with JB, where is the real incentive for UA? Yes, Kirby wants back into JFK, but at what cost? What else do they have that UA would be willing to pay top dollar for? A stronger presence in a lower yield Florida market, BOS slots? Some things that would come with the deal that UA definitely doesn’t want is their debt load, an aircraft type that isn’t wanted, the cost/time of parking the A220 and configuring the 320’s to the UA configuration, the high cost and time of a merger when dealing with training and labor contracts………. Another factor is that the government would certainly require the merged entity to divest slots in the one market that UA really wants and that started these rumors. Sacrificing slots in the NY/EWR market in order to gain approval would make any potential deal even more financially unattractive to UA. I can see a situation where JB gets into the Star Alliance, or where UA attempts to pick up JFK slots in a potential JB bankruptcy, but not a full scale merger/acquisition. That would be like buying a beater car that needs a lot of expensive work because it has a great stereo system. JB definitely has some prime pieces, but they’re not worth the cost of acquiring the company to get them.

 

How much value would you assign to preventing Alaska or another airline from acquiring those prime pieces? If another airline acquired JB then UA would be shut out of JFK forever. It’s not just about the current balance sheet.

 

9.42 billion in cost savings for UAL by letting Alaska buy Jetblue

 

In the last earnings call, either Kirby or the CFO (can’t remember their name, but I’ll know it by heart soon) placed a lot of emphasis on making United’s balance sheet investment grade. I don’t think taking on that kind of debt is congruent with those statements…

 

Kirby said that he expects United to be at investment grade by year’s end. It’ll be interesting to see how this plays out

 

Other airlines would most likely avoid buying JB as a whole entity for the same reasons. The good parts just aren’t worth the total cost of having to take the bad too.