SWAPA Prepares For Southwest Merger

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Southwest Airlines may have adopted a fresh approach to delivery delays for new aircraft: It’s rumored to be considering adding to its fleet by buying another airline. So sure that the airline is in acquisition mode, the Southwest Airlines Pilots Association is now lining up lawyers to deal with the inevitable labor force fallout that such an acquisition would bring. “Last month, SWAPA made the decision to retain several law firms if Southwest attempts to acquire another carrier,” SWAPA President Casey Murray wrote in a letter to union members. “To be clear, neither I nor anyone at SWAPA have any knowledge of an acquisition or merger in Southwest Airlines’ future. In fact, I hope a merger and/or acquisition never comes to pass.” Southwest has so far not commented on the rumors.

Murray and his advisers say Southwest has hitched its future to Boeing’s smallest 737, the MAX 7, but it will be years before it’s certified because of regulatory and design issues. Southwest has ordered 307 MAX 7s, whose 147-seat capacity is in the sweet spot for the short and high-frequency flights that are the backbone of Southwest’s business model. Murray said the larger MAX 8 is simply too big for the airline to operate profitably. As for potential merger targets, the betting seems to be on JetBlue, which operates mostly Airbuses of various sizes and some Embraer E-175s. The main advantage is that it has little schedule overlap and would instantly fill Southwest’s gaps on the East Coast.

Russ Niles
Russ Niles is Editor-in-Chief of AVweb. He has been a pilot for 30 years and joined AVweb 22 years ago. He and his wife Marni live in southern British Columbia where they also operate a small winery.

18 COMMENTS

  1. Since Boeing is a mess with the 737 MAX this may be a solution to their equipment needs. The pilots are worried about pay and seniority, which is what unions do, if Southwest purchases another airline to wait out the problems at Boeing.

  2. This is about airframes not routes…Spirit is the target…same amount of Airbus as JetBlue (~220) but $600m market cap vs $2.6B.

  3. One comment I read on a SWA forum said SWAPA recognized their are very few top firms specializing in airline mergers/buyouts. SWAPA lawyers may be simply playing the game an unhappy spouse does by meeting with all the top divorce lawyers in town before the other spouse does and disqualifying the best lawyers from the other spouse.

    Any speculation from the line swine as to who and when is just that.

    • I don’t see SWAPA as an unhappy spouse considering the $12b contract they literally just signed.

  4. If there is a merger, I hope that SWAPA doesn’t screw that pilot cadre the way they did to the pilots (ALPA) of AirTran when they acquired us. Specifically, the change when they didn’t take the 717 and screwed those who bid to stay on the 717 and then they didn’t redo the system wide bid. Also, if SWA acquires an ALPA or other union shop airline, don’t do them what the APA did to those at TWA (ALPA) in 2001!

    • Rik, you don’t know what you are talking about, unless you mean giving the TWA pilots a job, increased pay, increased vacations, and a pension is “screwing” them. The only thing they didn’t get was seniority (except those based in STL, where they had super-seniority). Lucky for them Bob Crandall wasn’t still at the helm. He said in an interview that if he had been there, he would have canceled the deal to purchase TWA following 911.
      If you want to talk about screw jobs, how about NWA stapling the Republic pilots to the bottom of their list. Or ALPA pilots at UAL screwing the pilots at Frontier when given two weeks to complete a seniority list before UAL would buy them. UAL pilots told them, “bottom of the list, take it or leave it.”

      • KaptKrk.. you are very mistaken about the NWA merger with Republic. It went straight date of hire, but since RC hired through the 1970s and NW did not, there were 700 plus RC pilots stapled to the top of the merged NW/RC seniority list. There was a 10 year fence that gave each group priority for the number of positions on an aircraft fleet they brought to the merger which was always a sore point for former RC pilots – the Republic pilots got priority on their prestigious DC-9s and Northwest was given the number of Captain positions they previously had on their wide body fleets. Positions in excess of the seats brought to the NW/RC merger were split 1:1 between former NW and RC pilots. Former NW pilots could bid the positions but would forever be junior for schedule bidding. As Roberts stated in his “Award” (to paraphrase) “NW pilots may still be able to send their kids to college but won’t be able to get the time off to attend graduation”. It was Republic that was stapled to the top of the RC/NW seniority list! The ensuing merger with Delta (relative position basis) gave the senior former Republic pilots a huge advantage. If you look at retiree data you will see that former RC pilots retired at the top of the NWA and DAL senority lists.

    • The loss of 2-4 years of seniority to go from fortune 900 to fortune 100 is hardly ‘screwed’. The decline of the buyer as the result of a gov quasi-mandated purchase however…

  5. “To be clear, neither I nor anyone at SWAPA have any knowledge of an acquisition or merger in Southwest Airlines’ future. In fact, I hope a merger and/or acquisition never comes to pass.”
    Even though we have no knowledge, we’re sourcing counsel as a precaution…uh, what?

    And how is the Max 8 too big for their network when every flight is packed like sardines? And how exactly would JetBlue’s A320 family offer them less capacity? Guess I just don’t understand airline economics…

  6. How ironic that Southwest is getting burned by the Max. So what’s next, a common type certificate for the 737 and the 321?

  7. Kaptkrk: I do know what I’m talking about. I was there, where were you? I was a captain at TWA. We, thew working cadre didn’t ask for the merger. I went from the left seat to the side walk. It cost me somewhere between $3.5 to 5M. And is was all of us, not just me. Ed White and APA screwed us because he/you could.

    Len Smith: the OZ pilots got date of hire, a very fair integration.

  8. KaptKrk.. you are mistaken about the NWA merger with Republic. It went straight date of higher, but since Republic hired through the seventies there were 700 plus pilots stapled to the top of the merged seniority list. There was a fence that gave each group priority for the number of positions on an aircraft they brought to the merger. The Republic pilots got priority on their prestigious DC-9s and Northwest was given the number of Captain positions they had previously on their wide body fleets. It was Republic that was stapled to the top of the seniority list! The ensuing merger with Delta gave the super senior former Republic pilots a huge advantage.

  9. I just hope they teach pilots the definition of the word ‘merger’. lol
    Fleet: 3/1; Market Cap: 9/1

  10. I bet they buy Breeze. Southwest looked at the A220 but at the time over 450 had been ordered by other airlines. Buying Breeze would give them access to 20 airplanes now with another 70 to be delivered. The A220-300 has just about the same seating as a Max 7. It would allow Southwest to finally make a jump from the 737.

    Southwest carries the most passengers domestically in the U.S. I don’t see the DOJ approving a merger with anyone except the smallest of airlines.

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