emersonbiguns

Panic and desparation....

It's not about acquiring Spirit, it's about preventing Spirontier.

BeatNavy

It’s both. They wouldn’t spend $4bn+ and deal with all the headaches just to fight/prevent a larger ULCC.

BunkerF16

You're either really naive or really stupid. You don't sound like a stupid person so I'll assume you just think the best in people and believe they always act with full integrity and what's best for everyone at all time, even if's personally detrimental to themselves. I often wish I could live in a world like that. You don't often come across innocence like that anymore in adults.

Chimpy

remind me, did B6 say they would give up on the NEA to make the NK thing happen? (not a rhetorical question). I know Spirit asked but forget what B6 said...

BunkerF16

Yep. I mean the instant expansion into the middle of the country plus the addition of 3500+ pilots planes and orders is pretty difficult to pass up. Also, don't forget the exorbitant premium AK paid just to keep B6 from acquiring VA only to completely dismantle every part of that airline including completely getting rid of all the airbus aircraft.

BunkerF16

They said they do not want to give up the NEA. Now, does that mean if it comes down to DOJ negotiations and it becomes obvious they'd only be able to keep one they'd keep the NEA over the acquisition? No way in my opinion that would happen. But why negotiate against yourself before you even sit down with the other side. There are arguments to be made why both should be able to stand on their own merits but at least let's get to the table before showing our cards and playing them.

Bluedriver

We compete with DL, UAL, AA, SWA and Alaska. Frontier competes with greyhound and the family minivan. Your own guys will reluctantly admit that much on your forum. It's why JB, DL etc only devote a very small percentage of our cabins to the most basic "ultra cheap" fares. We just aren't chasing the same customer, it's just a simple fact. Anyone who has spent a lot of time in the back of JB, DL, UAL, and then traveled in the back of a ULCC KNOWS that the customer base is very different. And you know it as well.

JB wants Spirit because it wants the planes, base, gates and pilots to create a larger JB. They want to gain scale quickly, to compete for more of the demographic that prefers, or would prefer more JB. That is 90% of why JB wants NK.

You can fantasize all you want about the other 10% if it makes you feel more important.

Bluedriver

Since you chose not to read, or didn't understand it the first time:

As for the NEA and Spirit:

1. The NORTHEAST ALLIANCE has a name, and it's named for a reason. On the other hand Spirit is small in the northeast, and JB had offered to divest some/most/all of Spirit's northeast gates/slots, if needed, to gain final approval. I don't see the NEA and Spirit having anything to do with one another.

2. JB may well be willing to give up the NEA, or parts of it for Spirit. But only if it has to in final DOJ negotiations. And maybe more importantly, we have an order of operations problem.

They can't say they will give up the NEA publicly during negotiations, because they may not get Spirit in the final negotiations, and in that case they would have damaged or lost the NEA, and still not have Spirit. Same with giving up the NEA to get Spirit prior to final DOJ approval. They could give up the NEA to get Spirit's BOD to approve, but the DOJ could block the merger, and again, JB would have lost both the NEA and Spirit. And per my first comment, they may not have to give up either.

3. Contrary to popular misinformation, the NEA itself is pro-competitive. It's true that it's a cooperation agreement between JB and AA in the northeast, but unlike most agreements of this type, the purpose isn't to gain leverage over the consumer to raise prices, but to create a 3rd viable alternative to DL and UAL who have extremely high concentrations of market share/slots on each respective sides of the river. So it's overall philosophy is to add a 3rd VIABLE competitor, which is pro-competitive, but let's look at how it does that to test whether it lives up to that promise.

At it's core, the NEA is a transfer of much/most of AA's domestic flights/gates/slots from a high cost AA to a low cost JB. That is absolutely pro-competitive. In exchange, AA is able to add long haul flights due to the extra feed. Those long haul flights are of course on AA, but they are additional long haul flights, which adds competition in those markets. It is more pro-competitive to have DL, UAL *AND* AA compete on any given international route than it is to have DL or DL and UAL do it alone.

4. The government allowed the big 4 to become the big 4, almost entirely through allowing mergers. JB and Spirit are now minnows swimming in an ocean full of sharks. To not allow two minnows to merge and become a sunfish in a ocean of sharks, for any reason, would be shameful.

If you read Spirit's infographic justifying their decision to go with Frontier, it's very clear they are emotional about this and it seems very personal, definitely not simply course of business. The Spirit BOD is promised 5 seats on the Frontier BOD after the merger, and I would bet a large sum we would see much of Spirit management at the new company, which I'm sure they have been assured of such, and is why we are seeing management featherbedding instead of true shareholder representation.

pilotpayne

ha I love reading bluedriver posts when he isn’t arguing with me.

JulesWinfield

I've provided logic backed up with facts, you have provided insults and conspiracy theories. Your scenario is possible, but not probable. Either way, the deal is dead. The only way it happens is with a hostile takeover.