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PART II: Southwest Bids for Frontier Airlines

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Follow-up Q&A with Ron Ricks, Executive Vice President Corporate Services and Corporate Secretary 

Yesterday, Southwest Airlines confirmed that it is preparing a bid to acquire Denver-based Frontier Airlines, which will be sold at auction in bankruptcy court next month.  I was able to speak with Ron Ricks, our Executive Vice President Corporate Services and Corporate Secretary, again this afternoon and ask him some of the questions that were raised yesterday following the announcement. (I apologize for the delay, folks.) 


 

1.  This is clearly a very emotional issue, and some Frontier employees have expressed fear and concerns about our bid.  What will happen to Frontier employees? Why should they welcome this news?
   
We understand the sensitivities and emotion surrounding this issue.  These are uncertain times for all of us, and change is always hard.  Frontier is a beloved airline, but they have been in bankruptcy protection since April 2008. And, the combination of simply awful economic conditions and high jet fuel prices remain, creating a great threat to the airline industry as a whole, especially to those that are not financially prepared. Southwest is prepared, and our current financial strength, liquidity, access to credit, and cash reserves demonstrate that. An acquisition of Frontier by Southwest will infuse much needed financial stability, and allow Frontier to emerge from bankruptcy.

As we’ve said, Frontier would continue to operate independently and separately for a period of time with its existing Airbus aircraft and personnel.  Over time, however, Frontier employees would be hired into Southwest as needed to support our fleet growth and expanded operations. 

I hope that Frontier Employees can take some comfort in the fact that Southwest has a 38-year track record of excellent Employee relations, treating people with respect, excellent union relationships, and industry leading pay. 

 

2.  We’ve said that we believe this move would increase competition in Denver.  Can you explain how Southwest’s acquisition of Frontier will enhance competition?
 
Southwest has a 38-year history of reducing fares and stimulating new traffic, particularly in markets where we compete against large airlines (like United) in major cities (like Denver).  How, you ask?  Consider this.  Today, Southwest is the third largest airline in Denver, carrying only 14 percent of Denver passengers.  United, by far Denver's largest airline, carries   about 50 percent of Denver's passengers.  The combination of Southwest and Frontier in Denver will still be smaller than United (about one-third of flights to United's 50%) but will immediately position Southwest as a larger and more effective low-fare alternative to United.  The acquisition would allow us to significantly expand travel options and low fares for millions of passengers travelling to, from, or through Denver.

It is also worth noting that Southwest has historically priced its fares independent of the number of airlines it is competing against, because Southwest also competes with ground transportation (rail, bus, car) and takes that competition into account in setting its fares.  

 

3.  What will happen to the smaller routes like Aspen that Frontier currently flies?
 
Following an acquisition, Frontier would continue to serve those routes just like it does today, at least during the transition period, before Frontier's service could be fully combined into Southwest.  We are still evaluating all the routes that Frontier flies and have not made any final decisions.  Of course, one of the interesting aspects of Frontier is the Lynx operation.  Lynx serves a number of smaller markets in Colorado and other states.  As part of the due diligence work with Frontier over the next week, Southwest will learn more about Lynx in order to develop a plan as part of our bid.
 

 

4.  What about routes that Southwest and Frontier both serve – will that capacity be reduced?
 
In Denver today, there are a number of markets that both Southwest and Frontier serve: there are markets that each carrier serves that the other does not; and there are cities served by Frontier that are not on the Southwest routemap at all, such as Atlanta. Additionally, there are many markets without nonstop service from Denver, and literally dozens of markets that are served by only one carrier – United.

As part of the due diligence, we will take a look at all of these routes, and certainly some adjustments may be made.  Capacity may be reduced in some markets but increased in others.  Our goal is to offer the best combination of flights and fares for our Denver Customers.

The important point to remember here is that this acquisition would allow Southwest to greatly expand its Denver service on an overall basis, and thereby offer a greater level of low-fare competition against United and more flight options for Denver.   It is our plan to bring more, not less, competition and low fares to Denver through an acquisition of Frontier. 


 

5.  Is Southwest planning to enter into routes currently only served by United?
 
We have not made any final decisions, but Southwest is evaluating those United monopoly routes.  Bottomline, routes served by only one carrier, in this case United, offer a great opportunity for us to bring more service and lower fares to the market.

Southwest's entry into Denver in January 2006 forced other airlines to lower their fares significantly.  For example, after Southwest entered Denver, United reduced its fares 30 percent or more between Denver and Albuquerque, Kansas City, Phoenix and Salt Lake City.  United dropped its fares by double-digit margins in numerous other Denver markets as well.  At the same time, passenger traffic rose by 30 percent in those same markets, as travelers took advantage of lower fares and more flight options, not just from Southwest, but from the other airlines responding to Southwest as well.

We have a long history of successfully competing against large airlines in other major cities - for example in Chicago, where Southwest has long battled American and United; in Philadelphia, against a much larger US Airways; and in Salt Lake City, where we compete vigorously against the once-dominant Delta airlines.  In these cases, and many others, Southwest has dramatically lowered the cost of air travel by forcing the bigger airlines to reduce their fares and offer more flight options to consumers.  In doing so, Southwest has given millions of Americans new opportunities for affordable travel. 

This is the essence of the "Southwest Effect," as the U.S. Department of Transportation dubbed it - fares go down and traffic goes up when Southwest enters new markets.  As a result, consumers win.  We look forward to doing the same, for the benefit of consumers in Denver and throughout the country, if our acquisition of Frontier airlines is approved. 


 

6.  Why wouldn’t we keep Frontier’s Airbus planes?
  
Again, Frontier would operate its Airbus aircraft as they do today until we could retire the Airbus fleet and transition to Boeing 737s. We take great pride in our all Boeing 737 fleet.  The 737 has a well-established reputation for performance and reliability.  And, operating one aircraft model allows for better training, maintenance, and operational efficiencies.


 

7.  There are a lot of things about the Frontier brand that Denver Customers really enjoy – like seatback TV’s.  What is going to happen to those amenities?

There are, of course, some service differences between the two carriers. Frontier offers assigned seating for example, while Southwest is proud of our popular open seating environment. Frontier charges for the first two checked bags (in Economy), while Southwest does not.  As part of our due diligence work we look forward to learning about our differences, and looking for ways to continue to improve Southwest’s service offering.  What won’t change is our legendary Customer Service.


 

8.  Frontier is the hometown carrier in Denver – how will the community be affected by the acquisition? 
 
We are very aware that Frontier is beloved in its hometown, just as Southwest is admired and respected in many of the communities we serve and where we have large number of Employees.  As a Company, we want to earn that same level of appreciation in Denver.  We have more than 400 Employees that currently call Denver home – many of whom are Colorado natives - and are already an active part of the community. 

The truth is, we strive to be the hometown carrier in every city we serve. From charitable giving to community involvement to sponsorships, our Employees and our Company are part of the fabric of the community.  Southwest was founded on a sense of family, and that extends to our Employees, Customers, and the community.

Regardless of whether Southwest is successful with respect to our bid, Frontier is being auctioned pursuant to an order of the bankruptcy court.  Thus, the only thing any of us can know with certainty is that Frontier would undergo change of some kind and to some degree.  The future, with or without Southwest, cannot be certain.  But, with Southwest, the largest carrier of passengers in America and the most consistently successful airline in commercial aviation history, Denver and Frontier's employees will have a strong and dedicated partner.


 

9.  Given the tough economy and volatile energy prices, Southwest has had its own financial challenges is the past year.  Why is Southwest in a position to buy Frontier?
 
Southwest has always prepared in good times to weather the bad times, and to be able to take advantage of opportunities when they present themselves. Our financial strength, strong balance sheet, liquidity, and access to capital allow us to both weather the current economic storm and take advantage of an opportunity to grow in Denver by acquiring Frontier.

Since opening in January 2006, Denver has been our fastest growing city – ever!  We are proud of our Denver operation, and the results that we have achieved in such a short period of time.  We are extremely and equally proud of the service options and new low fares we have brought to the market.

Again, regardless of whether Southwest is successful with our bid, Frontier is being auctioned in bankruptcy court.  The only thing we know for sure is that Frontier will undergo some kind of change.  But, with Southwest, the most consistently successful airline in commercial aviation history, Denver and Frontier's employees will have a strong and dedicated partner.


 

103 Comments
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Keep in mind that people in the east use F9 to fly all over the west and vice-versa as well so it is not all about Denver. The rest of the country uses this airline as well and in some cities it is the only low cost alternative to you. How do you better competition in those cities by removing options and increasing your strong hold rather than the opposite which we know in the long run allows you have higher fares and ultimately make things less competitive? Also, why is it that AirTran would have taken on Midwest's cookies and signature service and you're not going to keep any of the distinctive amenities that Frontier has? I mean ultimately this is what you're saying: We want more market share in Denver, we will ultimately eliminate in its entirety the Frontier product in order to achieve that, we don't care about the impacts on markets outside Denver that will lose options, and more competition means more Southwest and less alternatives for consumers.
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Gordon Gecko, anyone?
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I am a current Frontier employee and to be honest have no issue with Southwest, they are the reason I got into the airline biz in the first place, but because of no oppenings at the time I went ahead and joined Frontier. Yes it will be sad to see Denvers hometown airline go along with the animals on the tails. But this is the nature of the industry and the current financial crisis. The reason there's so much negativity is because of our jobs... If Southwest can make sure Frontier employees will still have jobs and decent merging into Southwest's system instead of all these "possibly and overtime" statements which make us question WN's intentions, I'm all for it and so are many of my fellow F9'ers... Paula any clarification on these important subjects? Thanks again for your help and responses.
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AGAIN, WHEN WILL SOUTHWEST EFFECT COME TO ANCHORAGE, ALASKA?
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I have frequent flyer miles with Frontier. What will happen to them in a Southwest takeover?
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I think that Airtran Airways should buy Frontier Airlines
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Hey, F9 folks, Please try and cut Paula and Brian some slack here. The news on all this just popped a couple of days ago, and it's not as if they (or anyone else) have an internal memo the size of a phone book that has every nitnoid detail from A-to-Z already figured out in advance. So many things depend upon what happens on the auction day, so interpreting the lack of detailed answers at this point in time as proof positive of some evil plot or other malice aforethought is unreasonable, and just plan silly.
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Southwest has just become a ruthless, money hungry, and ignorant carbon copy of the old Aeroflot and now you're going to go in and destroy Frontier like American destroyed TWA and right in the middle of a horrible economy no less. Disgusting! Frontier is in a position now to do just fine without you with Republic at the head, the brand still intact(which is far better than yours), and all of the jobs still there. If you follow thru with this then my business goes to United and Continental! I hope Republic OR FRONTIER PARTNER AIRTRAN gives you a serious run for your money.
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This(http://www.denverpost.com/business/ci_12955374) confirms that they are going to ruin the Frontier brand and simply eliminate them so SW can expand and we know that if Republic buys them that they will preserve the airline and the competitive choice for consumers in Denver and all of their spoke cities and that when Airtran bid for Midwest that they would have preserved that airlines signature qualities such as the cookies and brand characteristics so I think it is a no brainer that one of the latter needs to win here instead. Republic.....RAISE YOUR BID! COMPETE! AirTran.....SAVE US FROM SOUTHWEST! PLACE A BIGGER BID IF SOUTHWEST CAN'T. LET'S KEEP OUR OPTIONS, ASSIGNED SEATING, AND IN FLIGHT ENTERTAINMENT!
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AGAIN, WHEN WILL SOUTHWEST EFFECT COME TO ANCHORAGE, ALASKA? BROKEBYALASKAAIR — Fri, 07/31/2009 - 19:30 ----------------------------------------------------------------- You don't want this. They're like a parasite. They come in and kill off your present airline and replace them with one that has half the amenities and then shrink back down once they have a stranglehold on you to a size that is just big enough to keep everyone else out but give you a major headache. Look at Nashville and American Airlines and the fact that they are now in the process of the killing off our only other low cost alternative.
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You can't blame the people who work for frontier for being curious, it's human nature. I would be freaking out too if my job/career was in jeopardy. Not saying it necessarily is for the frontier people. But knowing how there's been a long history of the weaker, smaller airlines getting screwed in buyouts, I don't blame them...
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Its a sad day. Go away Southwest. I will take my business to United .
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All you whiney ass Frontier apologists need to realize that your pathetic little carrier is only now making $ because - HELLO - YOUR IN BK PROTECTION!! Take a look around and get a clue! The airline industry is in shambles and WN will do what it has to do to survive and even expand in this environment. I work for a major telecom co and have been living in fear of losing my job for the past 7 yrs. I've been a loyal WN flyer for yrs and totally back them in this effort. As far as @m concerned you're all acting like a bunch of spoiled brats. If UA is where u want to take your business don't let thedoor hit ya. UA is a pathetic excuse for an airline that should have been put out of its misery yrs ago. Before u leave hoever here's some advise - GROW UP!!!!!
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Does SWA have a good ski team?
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Again, I'm not sure why BROKEBYALASKAAIR is complaining about the "southwest effect". Alaska air is cheaper than Frontier on the DEN-ANC route, and same price as their competitors on the SEA-ANC route.
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In order to fly INTERNATIONAL (not addressed yet by WN) you need to have a level of sophistication that you'll never have. So fudgetabouit, Mexico and Costa Rica are already in the chopping block... They cannot even understand how to take their crappy 737's overseas... Ain't gonna happen!
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If anyone had any doubt that this is an open forum, they'd only need to read the last few posts to know. I've stopped participating in some Yahoo forums because I got tired of people posting rude, inaccurate, flaming comments from the anonymity of their keyboards. NOTHING in anything that's currently out, from the press release, to the press conference, to Paula's attempts to deal with the screaming hordes here IN ANY WAY backs up a "General Sherman/Atlanta" type burning down of Frontier. Spending over $100M to just "get rid of the competition" is the stupid financial planning, and if true, would be reflected in our stock price on Wall Street. Oh yeah, our stock's up since the announcement. And if you think a commuter carrier is going to support wage rates and benefits that a currently in place..........REALLY?? All airlines are businesses!!! Frankly, I wish there were some filters on this site, because I'm tired of reading the screaming tripe posted by people with their hair on fire. Just my opinion.
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Seems like to me that Southwest can't simply start swapping existing or new 737's for the Airbuses currently going to Mexico and Central America. Doesn't an operating certificate apply to only a certain type of aircraft? And given that Southwest doesn't just sit still and would be happy with 6 destinations south of the border, it would need a way to expand in that direction and others as well, but with 737's, a magazine, and a bag of peanuts? Maybe a nice outcome would be that Southwest could shift Frontier's operations to be its "international" arm, and therefore re-assign many of the planes, employees, and general "know how" to other "hubs" such as Chicago, Baltimore, Phoenix, Vegas, etc and use an enhanced "product" with setback TV's, etc. for longer distance international travel. Remember that Southwest had to connect with ATA in order to start serving Hawaii (as well as LGA, DCA, and others), and when ATA went bust they had to drop Hawaii off the route-map the next day, suffered that black eye, and hasn't been back since. Southwest has talked for years to hook up with a partner to the south to start offering Mexico service and to other countries, but maybe because of the ATA experience they don't want to rely on other airlines to represent the "Southwest" brand. Of course SW would want to keep using 737's in Denver and in the U.S. but they are a big enough airline to start using another aircraft type if they really want to. Other low cost airlines and some actually more "lower cost" than Southwest are using multiple aircraft types, such as Airtran, Jetblue, and Spirit. To those that say that "Southwest would never do this" or "never to that" might have been right in the past, but in order to be around for another 30 years and more, it needs to change beyond simply adding one U.S. city after another to the route map when the growth opportunites that way are rather limited. This could be a whole new chapter for a great airline that does well adapting to change - and maybe Frontier employees can keep an open mind that they can possibly be part of an exciting new era and go along for the ride!
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"What will happen to Frontier employees? Why should they welcome this news?" Well, because the alternative is unemployment in a horrible economic environment. Seems pretty obvious to me.
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"Southwest has just become a ruthless, money hungry, and ignorant carbon copy of the old Aeroflot " Congratulations! You've now taken over 1st Place if the most ridicuously hyperbolic comment division. Well-done!
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To all the good folks at Frontier. I know it has been and is a really scary time. I have been with SWA for 32+ years and can assure you there IS a focus on what happens to the PEOPLE at Frontier. That has always been the Southwest way!
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It's time for a reality-check. A surprising number of posters are under the impression that a Knight on a white horse can ride into bankruptcy court, purchase Frontier Airlines, invest large sums of money and continue to operate Frontier in the same-old way. That plan would simply be a round-trip ticket to bankruptcy court. Frontier has been on bankruptcy life-support since April of last year. Frontier cannot save itself. Nobody is destroying Frontier. Bidders at the bankruptcy auction will simply purchase the component assets they feel can be revived—they cannot save the airline as we know it. They can save part of it. Regardless of who purchases what assets at the bankruptcy auction, Frontier's life as we know it is over and it is always painful to lose a beloved friend. L Moody
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That poster who equates Southwest with Aeroflot just might be on to something. There sure appear to be plenty of folks posting who already think that Southwest will be forcing all the F9 folks to march off to the Siberian Gulags, never to be heard from again...
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Okay for real. You people who aren't reading the corporate speak are being flat out stupid and blind. Frontier is a business. Southwest is a business. Shut up and listen. Yes F9 is in bankruptcy...thank their credit card processor for that. They've had issues, but turned them around. Southwest, the almighty profit machine, finally went south recently. Why? fuel prices. If you have even bothered to look at their numbers, the airline operation has been losing money for awhile now but the fuel hedge/trading business was making bank for them. Once oil dropped, they lost that source of income so the entire company went into the red. And please, leave the fictitious, Southwest invented "Triple Crown" out of this. The FAA/DOT awards no such designation...this was made by the WN marketing folks, a great idea mind you, and that is it. Oh...and WN hasn't been ranking in all top 3 main indexes at the same time for a while. Also Kathleen that was posting on the other one. The F9 product offering is superior. Yes their are charges for baggage, but if you haven't noticed most people tend to bring everything on board. The A320-family aircraft cabin is also bigger than the 737, so if you argue the 737 has a bigger feel...you have never been in an A320 or are just flat out lying. F9 serves several secondary airports as the only choice for low fares, that WN would never serve on their best day. These cities will likely close as they are with in the 2 hour drive of another WN station, and WN feels this is effective enough to serve those cities. The inflight experience on F9 is great. If you want to take advantage of the LiveTV you can, if not...then it isn't a big deal. And as far as F9 being $100 more than WN...you have obviously never priced the two. Let alone, when do you buy your tickets? Unless you are doing same day, or 1-day advanced purchase...WN will always be HIGHER than most competitors. I priced a trip not too long ago from a mutual WN & F9 city to Detroit, also served by both. F9 came in around $220 round trip...WN...about $370. So I should pay more for a flight with out assigned seating, IFE, etc....and instead go for the flight where I'm making 2 stops along the way? Stupidity reigns. Now with Ron Rick's answers... 1. This is clearly a very emotional issue, and some Frontier employees have expressed fear and concerns about our bid. What will happen to Frontier employees? Why should they welcome this news? ****Over time, however, Frontier employees would be hired into Southwest as needed to support our fleet growth and expanded operations. **** Meaning...ALL F9 employees will have to reapply for their job just like Morris Air, TranStar, and ATA employees had to. In cities like DEN where there is going to be a good deal of overlap, they aren't going to get hired on since there will be a WN employee already doing the work. Spinning this any other way is just flat out lying to the F9 employees. YES you have a chance at keeping you job, just like you do under the Republic option...but you are going to have to re-apply to keep it. This also keeps WN from having to respect any time the employee has spent with the company. Oh yes...F9 is in bankruptcy blah blah blah. So was UAL, US Airways, Delta, Northwest, etc. They had some job cuts, but those airlines made it with the right investors. Republic isn't stupid and F9 is nice operation to get use to operating a full fledged airline versus a contract operator. 2. We’ve said that we believe this move would increase competition in Denver. Can you explain how Southwest’s acquisition of Frontier will enhance competition? >>>Southwest has a 38-year history of reducing fares and stimulating new traffic<<< Umm, but the traffic is already stimulated in Denver thanks to F9 and WN already being there. Try again. >>>Today, Southwest is the third largest airline in Denver, carrying only 14 percent of Denver passengers. United, by far Denver's largest airline, carries about 50 percent of Denver's passengers. The combination of Southwest and Frontier in Denver will still be smaller than United (about one-third of flights to United's 50%) but will immediately position Southwest as a larger and more effective low-fare alternative to United.<<< So what you are saying, you are just combining the numbers of WN and F9 so that makes YOUR market share go up...okay I follow that, and it will position Southwest as a larger alternative to United. However, you are also eliminating that one alternative known as Frontier. So essentially you are eliminating a competitor but gaining market share yourself, which in total for the local community will have no net gain except actually fewer options and markets to fly to. Let's be honest. DEN isn't at capacity at all, except for gates. Build more gates than grow the market yourself. Why bother buying out another airline? Oh ya...it removes the pricing pressure on you. Sorry forgot about that. >>>>It is also worth noting that Southwest has historically priced its fares independent of the number of airlines it is competing against, because Southwest also competes with ground transportation (rail, bus, car) and takes that competition into account in setting its fares. <<<< How is Amtrak doing in Denver these days? And really...you price against bus and car travel? Then I want to sit down and discuss these fares, because they may be a bit too high unless things in Dallas are overpriced. 3. What will happen to the smaller routes like Aspen that Frontier currently flies? >>>Of course, one of the interesting aspects of Frontier is the Lynx operation. Lynx serves a number of smaller markets in Colorado and other states. As part of the due diligence work with Frontier over the next week, Southwest will learn more about Lynx in order to develop a plan as part of our bid.<<< IOW, we tried this with TranStar and it failed. We are going to ask they aren't part of the company when we submit the official bid. So to those smaller communities, Enjoy United! 4. What about routes that Southwest and Frontier both serve – will that capacity be reduced? Not going to bother posting his response. The simple answer as there is with any consolidation is....routes and capacity will be cut. That's it. Sorry for those in cities with both, you will lose flights especially with WN's load factors on a lot of these routes pathetically low. If you want to see the actual numbers, the DOT publishes them for all to see. Not hard to find and best of all...they can't be spun by the spinmeisters here at WN. 5. Is Southwest planning to enter into routes currently only served by United? Uhh...he diluted his response to the last question answering this one. But great job filling space with the same information. 6. Why wouldn’t we keep Frontier’s Airbus planes? Single fleet commonality which really means nothing anymore, especially when you are talking about a larger sub fleet. The 737 does have a well established record, now if Southwest can actually properly maintain them the FAA is still questioning that...YAY for holes in the roof. At least it wasn't another Aloha incident where the entire thing came off. Oh and there is that whole thing about visiting the gas station at the end of the runway in Chicago. And also to the points by others on the safety of the A320-family...quit speaking out of your behind. There aren't any outstanding issues with the Airbus narrowbody family that would make them unsafe. At least they didn't have any major faulty design issues that would make them plow into the ground in Colorado Springs and Pittsburgh. 7. There are a lot of things about the Frontier brand that Denver Customers really enjoy – like seatback TV’s. What is going to happen to those amenities? Should be...we'll look at them for about 30 seconds and then just tell you that they will be going away. Oh, but let me ignore the question and bring up bag fees because that is our current PR push. 8. Frontier is the hometown carrier in Denver – how will the community be affected by the acquisition? Jobs will be lost, competition will go down, but you get to see 737s all over the place flying to the same routes we already fly. 9. Given the tough economy and volatile energy prices, Southwest has had its own financial challenges is the past year. Why is Southwest in a position to buy Frontier? This is a cheap ass deal to eliminate a competitor. $100 loss in this industry is nothing. They can effectively remove pricing pressure by getting rid of them and increase market share. Let's be honest. They can probably buy F9, shut it down that day, and they will recoup the $100 million in no time. Shut up with the dedicated partner BS. I think your unions will comment differently on just happy rosy and wonderful things are.
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I guess the message that most of you are missing. Meaning the ones being negative towards Southwest Airlines. Is that, Bottomline. As of August 11, 2009. Frontier will be no more. Either purchased by Republic or by Southwest. Yes they may run by the Frontier name independently for a couple of years. However, when those couple of years end. Either Republic will be selling off those assets, as it is not in the business to be a Soley runned Frontier airlines. But to feed other airlines Routes. which means that will be dictated by other airlines anyways. Or Southwest will take over and place all those assests in a place that will not only enhance the Travel options out of Denver. But throughtout the whole country.. A stronger Southwest Airlines presence, whether if someone will fly Southwest or another carrier. Means better competition and the continuance of Lower fares. Again, allowing those who have never flown or those that always do. Will have that option to Go And See the world.
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WWelifer, It is apparent we aren't he ones missing the point. >>>I guess the message that most of you are missing. Meaning the ones being negative towards Southwest Airlines. Is that, Bottomline. As of August 11, 2009. Frontier will be no more. Either purchased by Republic or by Southwest.<< That is correct. Frontier will become either a subsidiary of Southwest or Republic. >>>Yes they may run by the Frontier name independently for a couple of years. However, when those couple of years end. Either Republic will be selling off those assets, as it is not in the business to be a Soley runned Frontier airlines. But to feed other airlines Routes. which means that will be dictated by other airlines anyways. <<< They've already express the opinion they may look at offering an IPO when Frontier is able to stand on its own feet after reorganization. It is also highly probably that hey will combine the operations of Midwest into Frontier before spinning it off. However, Frontier would remain an separate operating entity and not have a portion of its operations absorbed into another. >>>Or Southwest will take over and place all those assests in a place that will not only enhance the Travel options out of Denver. But throughtout the whole country.. A stronger Southwest Airlines presence, whether if someone will fly Southwest or another carrier. Means better competition and the continuance of Lower fares. Again, allowing those who have never flown or those that always do. Will have that option to Go And See the world.<<< This is just a flat out lie and shows your ignorance when it comes to the facts. Southwest will take over the assets, but they have already said they will ground the fleet, force employees to reapply for positions with Southwest when those positions are taken over, and will likely discard Lynx. Exactly what assets are they keeping? They are eliminating a competitor and making it easier to place the massive amounts of 737s they have on order, instead of parking them in the desert or selling them like they've had to do the last few years. How will it enhance travel options? Consolidation will LIKELY reduce flight options and destinations for all consumers. It will also LIKELY reduce choices for consumers to pick. I mean for real people, go through market by market and compare prices...F9 blows WN away in most cases. Now go through and look at the loads and market share of WN vs F9, it is quite obvious. And for god sakes, get off the "for people who don't fly to go and see the world." Baltimore and Spokane are not the world. International routes are likely going to get dropped and in 3-4 years you won't even recognize the F9 route structure. Guys for goodness sake. Go and look any any merger/acquisition Southwest has done or for that matter, any normal airline buy out. The routes and "assets" that get acquired are normally gone with in 5 years. This isn't going to be any different, and don't say Southwest does things differently. They've done it themselves and if you aren't going to acknowledge that then you are being blind or just stubborn at opening your mind to the facts and will continue to show just how uneducated with the situation you are.
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With this merge, does that mean it will be a delay in the hiring process for pilots that are not with Frontier or already in the pool of pilots that have already been hired by SWA?
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NOTHING ECHED IN STONE There are so many blog comments here that the anger / frustration is so misdirected right to SWA ,WHO DID NOTHING WRONG AND EVERYTHING RIGHT, to do whats called (good business). ask yourself 2 questions : 1- would you put your self first when things are Tough (YES!!!) 2-would you put your family right up there with you (YES!!!). please start to focus on the true situation at hand ,Frontier is at the mercy of the court and economy . To be truthful about it , they have made some bad moves and not secured there families future-that is (bad business). Hate to say it but the true hurts. Bless and give the strength to all those negatively affected buy this purchase.
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L Moody, Your comments were freshingly on-target. Kool Aid is Yumm should try reading them!
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Realistically, this probably won't happen. F9's board as well as creditiors get to select which offer is better, it just doesn't go to the highest bidder. Any scenario which leads to F9 ceasing to exist will probably not be selected. WN has made it perfectly clear that they have no intention to retain F9 as a partner nor it's employees. Airbus is a creditor and will likely not be very enthusiastic about allowing a sale to WN that has no interest in it's product. Furthermore, the FAPA has to approve the deal or it doesn't go through, and they have already stated that a deal that doesn't include continued employment for our employees at F9 is going to be a no go. I'm starting to see alot more negativity between the work groups when it's really neither of our faults. The WN employees didn't tell management "hey buy F9" and F9's employees didn't have upper management expand too fast and blow millions of dollars on focus cities that failed. WN folks have to understand that our lively hood is being threatened and all the smoke being blown up our a**es is frustrating when everyone in here knows how this works out for F9 people in the end...not so good. No one questions that WN is a good company and obviously a good one to work for. Likewise, F9 is a good company who learned from it's mistakes and is now a profitable carrier, and is also a good company to work for. If F9 was as weak and fragile as some have implied....WN would have crushed us long ago. We survived when no one gave us a chance. We have gone toe to toe with WN in a horrid economy, in arguably the most competitive market in the US and not only continued to operate, but also made money. As another blogger stated, F9 is doing very well in Denver, even better than WN. That's not saying WN isn't a good airline, it's just saying that in this Market, we fair well against them. All I ask is for people to quit reading into the PR crap being strewn about and look at what will actually happen if WN aquires F9, you will erase us from existence and we will for the most part lose our employment. Look at any of WN's previous aquisitions, they are all gone....all of them...why would we be any different? At least show us the respect to acknowledge the truth.
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Once again all of these Frontier employees are bragging about beating Southwest with market share and how profitable they are now. How they seem to forget that the reason they are profitable is because they are operating UNDER BANKRUPTCY PROTECTION. If Southwest did not have to pay its bills I am sure our profit margins would be alot higher. I have nothing against F9 but no matter how you look at it whether its Southwest or Republic Frontier Airlines as you know it is gone.
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To BNA - I think you are mixing up the history a bit. AA came to Nashville as a hub carrier when our new airport was opened. Several years later, they abandoned the Nashville hub and drastically reduced flights out of BNA. WN came in and (over time) took over the C concourse which had been deserted by AA. I'm thankful we have a large WN presence at BNA...we get to fly to more destinations (often non-stop), at lower fares, than most cites our size.
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Southwest was at one time in the same position as F9 is now. Braniff wanted nothing more than to see them crushed like a bug. WN, you've come a long way, baby. You've become a cancer on the airline industry. I tryly hope this David can stand up to the WN Goliath. Can't beat 'em, buy 'em. Disgusting.
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F9 Ramp, L Moody said this earlier on Aug 1st, and with all due respect, you should read and understand their post... "It's time for a reality-check. A surprising number of posters are under the impression that a Knight on a white horse can ride into bankruptcy court, purchase Frontier Airlines, invest large sums of money and continue to operate Frontier in the same-old way. That plan would simply be a round-trip ticket to bankruptcy court. Frontier has been on bankruptcy life-support since April of last year. Frontier cannot save itself. Nobody is destroying Frontier. Bidders at the bankruptcy auction will simply purchase the component assets they feel can be revived—they cannot save the airline as we know it. They can save part of it. Regardless of who purchases what assets at the bankruptcy auction, Frontier's life as we know it is over and it is always painful to lose a beloved friend." L Moody
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Let's just be clear that this fight for our beloved Frontier has not begun yet. The credit committees still have to agree to the offers, even the ones from Southwest. Sure everyone in Denver knows we are facing the Wal-Mart Virus if SWA gets us. Hopefully that will spark enough interest in keeping our "Animals" flying for many years to come! Southwest buying Frontier is not going to "fix" Southwest!!!!
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If anyone had any doubt that this is an open forum, they'd only need to read the last few posts to know. I've stopped participating in some Yahoo forums because I got tired of people posting rude, inaccurate, flaming comments from the anonymity of their keyboards. NOTHING in anything that's currently out, from the press release, to the press conference, to Paula's attempts to deal with the screaming hordes here IN ANY WAY backs up a "General Sherman/Atlanta" type burning down of Frontier. Spending over $100M to just "get rid of the competition" is the stupid financial planning, and if true, would be reflected in our stock price on Wall Street. Oh yeah, our stock's up since the announcement. And if you think a commuter carrier is going to support wage rates and benefits that a currently in place..........REALLY?? All airlines are businesses!!! Frankly, I wish there were some filters on this site, because I'm tired of reading the screaming tripe posted by people with their hair on fire. Just my opinion. Will — Sat, 08/01/2009 - 07:27 ---------------------------------------------------------- You're quite rude. I hope that whatever you do for SW doesn't involve Customer Service or working at one your stations because that would be some crappy service if it were the case. If you don't want to hear what your customers have to say or give a rats behind about what Frontier's customers and employees(who have every right to like their airline and want it stand alone just like you do-pride in a company other than yours isn't a sin) then take your blog down or don't ask for it by making a post soliciting it. It's hilarious that you say that you don't accept email because you want that "personal touch" and professional atmosphere with names and addresses that you get with a letter but then at the same time you do this. Also, if you don't think that getting rid of Frontier's assets and product features and replacing it with yours without absorbing or keeping any part of it around sans gates and routes like you bought from dead ATA(which is the suggested intention in the interview above) spending 100 million+ to scrub a competitor then I'd love to hear what you do call it. And of course that would drive your shares up because its growth and the death of someone whose been eating into your profit so ultimately it would mean more money for you and them. What a screwed up company you've become. And yea that may all seem rude too...BUT YOU ASKED FOR IT.
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lewmoore- That's inaccurate. First, the AA hub started at the old terminal right before the move where they replaced the rose garden with an extra finger of gates and ran a bus to a remote tarmac expansion that housed the Eagle planes. SW had wanted to come in and start a large north south presence in the city also at that time but before Herb could meet with Mayor Fulton, AA beat them to the punch and Herb didn't believe Nashville could support that kind of presence from them both. Then fast forward to 1995 when AA had shut their San Jose and Raleigh hubs and were saying they "had every intention of making the Nashville hub work" at reduced size of about 50 mainline flights a day + a decent size Eagle operation. That is when Southwest started growing and competing with them in such a way that they could no longer charge the fares that they needed to keep it going as originally planned and it finally had to shut down as they couldn't compete. Southwest surpassed them in flights as AA made their last cuts in mainline service to make us a spoke and withing a year were at 50 serving roughly the same routes minus London and Toronto. A great example of the competition was when AA decided to keep LA as a route right after closing the hub and SW immediately started flying it more often with bulletin boards around the airport next to AA's saying "LAX ASAP". Eagle closed their half of their hub in '96 citing the fact they no longer had mainline flights to connect people to. SW cont. to exp. to 89 flights a day (without many of the perks of a full service airline) driving the other legacy airlines to have to switch to RJ's in large part and once they did that they started acting like we weren't really worthy of that big of a presence and they were doing us a favor while making BWI their major north south airport and starting to cut service here, 89 to 87 to 85 to 80 with Islip, Manchester, PBI, Seattle, and Oakland dispearing and regular frequency cuts occuring on most other service with has so far outpaced any additions with us no longer being an opening market for any of their new cities but rather someone who has to connect in a place like BWI or MDW or DEN. Now they are going and getting rid of our only other low cost competitor in Nashville, Frontier, thus condemning us to their crappy cattle call and no frills service from a better airline all over again. Go ahead and try to prove me wrong but all one has to do is search the Google News archives, Airport history books on sale in Nashville, and other airline forums with first hand accounts on the situation to see that I'm right. That is why I am so PO'd right now. They do just enough to keep everyone else out of here in a meaningful way without taking the market seriously(we're underserved compared to Charlotte, Memphis, RDU, STL, IND, TPA and MKE who are the same size believe it or not) and force us to have to deal with amenities and seating policies that are only better than Spirit rather than taking a hint and adding assigned seating(where we reserve our seats at reservation time like any other airline-not the way they tested it where they randomly assign seats splitting up some groups at the ticket counter like they tested which of course people wouldn't like) or some IFE like all of their other low cost competitors who by the way do a much better job giving their markets what they deserve and growing without all kinds of stupid little rules and idiocies than SW does which has made them one of the most restricted carriers of the pack. Southwest hasn't even taken the time finish upgrading their frickin gates in Nashville with the new design that they announced several years ago yet. At least half the gates still don't have the new plug and cupholder chairs and initially they didn't even put in the electronic display things for the new boarding but instead just brought in metal poles that they'd turn each time the boarding group changed. None of the gates have digital diplays to give the regular flight information still. All placards with 80 flights a day no matter that we renovated the place and everyone else has digital now(all other SW stations our size do). I've also had agents at the ticket counter tell me how we're only a real airport pass. wise when big events happen and stuff like they're doing us favor giving us a presence this large but otherwise its slow which pisses me off becaue our airport serves a trade area of 3 million and we have 9 million passengers a year O&D now which is how many we had O&D and connecting at the height of the AA hub not to mention that we've grown a bloody lot and now have Nissan North America, Oreck, LP, and whole bunch of other people headquarted here. Doesn't that annoy you ANY? What do you guys at Southwest have to say to that? Oh and lewmoore-we still have half of one side of the C concourse deserted and SW shares it with Air Canada, Midwest, and American so they didn't exactly come back in restore it to its former glory and had we not renovated it ourselves they wouldn't have done jack like they have in BWI, MCO, MDW, or TPA which are clearly more important to them. So yea,...do this and I'm going back to flying only AA and their former frequent flyer partner US Airways to fill in the holes like Florida. Your peer the down the interstate in Houston, Continental is looking better every day too as is a Republic owned Midwest, RJ service only on the first leg from Nashville or not.
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L Moody or the Anonymous who reposted what they said....Frontier has restructured in Banruptcy so they are not the same as what brought them in, they now make money, and if the economy was not such that they can't get exit financing right now then they would not have be bought by anyone and Republic was/IS a perfect remedy to that problem. All one has to is go back and look at their old news releases and website to see that they've done the neccessary restructuring.
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It's no secret that SWA is currently overstaffed. For in-flight the number is around 700; for Pilots it's about 250. In some stations, it's large numbers of CSA's & Rampers. It is believed that SWA will force some station staff to move to a different location in order to keep their jobs with the company. After integration, I cannot see SWA needing ANY of Frontier's staff, even with expansion at Denver. I can only hope that SWA does the right thing by making this clear to the bankruptcy judge and to the Frontier staff. Giving people false hope is contrary to SWA culture & values As for "increasing competition", I don't think anyone with half a brain believes this logic. Since SWA already overlaps Frontier on most mainline routes out of Denver, it would be much cheaper to simply add routes & flights to new cities or exsisting SWA cities. Buying the competition and shutting them down does not "increase competition" in any form. I hope this post isn't viewed as anti-SWA. I like SWA and Frontier equally. But I also know that SWA is expert at putting a positive spin on everything- no matter how negative it may actually be. So be honest SWA & practice what you preach.
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Let me also add to the first of the two posts that I just made that it gives me great pleasure to know that my potential alternative to you Continental, kicked YOUR tail in Houston when you tried to run Muse. I'll enjoy them all the more with that knowledge as well as the fact that they are the one airline who has never stopped competing with you at Love Field.
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Wow! I can say for sure that after reading all of these comments, I have a headache. If it is one thing I have learned is there is nothing we can do about it so why worry. Iam a Frontier employee for over three years so I can say like the rest of the f9 employees is that we have more to lose here, or maybe gain who's to say. If WN wins well ok then. Because one thing I have learned who ever you work for is the customer, and to make them happy. If we the F9 employees are able to work for southwest until they decide what to do with us. Iam sure they will allow us to interview so we need to show them the kick butt customer service that all of us was in training, that our customer's are priceless. We have the same culture for say as WN we just worded it differently, but again it's still about the customer. I hope all of the F9 employees the best whatever comes to boot, you never know working for WN might be exciting to. In the mean time lets not lose focus of our respnsibility as F9 employees, take care of each other, and our loyal customers. We have no control over any of this so again why worry about it.
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Republic's regional payrates for mainline employees sounds like a great win for Frontier especially since Southwest's employees are some of the best paid in the industry. Also, I believe the fact that the Frontier brand has received bids should be exciting for the employees of an unprofitable company that could simply shut down. All airlines (even Southwest) are for profit companies in a capitalist economy. If you are a stockholder who wants to get a return on investment from any solution with Frontier, does that make you as "greedy" and "money hungry" as Southwest?
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Southwest's press release states: "A successful acquisition of Frontier Airlines will allow Southwest to expand its network with its legendary low fares, add jobs into Southwest, and boost competition in Denver and other cities." I don’t see how a merger with Frontier Airlines will accomplish this. There are two reasons for mergers and acquisitions. Enable growth that could not occur without the merger and/or reduce competition. Southwest’s acquisition of Morris Air accomplished the former while the merger with Muse the latter. It appears that an acquisition with Frontier will only do the latter. Southwest is not going to deviate from a part of its business model that is so critical to its profitability – flying one model of aircraft. Since none of Frontiers’ aircraft will become Southwest aircraft and Southwest will not acquire more 737’s than it would if it did not acquire Frontier (indeed the capital used to acquire Frontier could be used to acquire more aircraft) there are only two ways an acquisition of Frontier could enable Southwest to grow faster – Southwest will operate two brands indefinitely (reading between the lines of the press release it appears operating Frontier as a separate band is only a short term plan) or trade each Airbus for a 737 – I'm not sure this is possible.
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TO SWA F/A " Once again all of these Frontier employees are bragging about beating Southwest with market share and how profitable they are now. How they seem to forget that the reason they are profitable is because they are operating UNDER BANKRUPTCY PROTECTION. If Southwest did not have to pay its bills I am sure our profit margins would be alot higher. " This is not bragging...it is an absolute fact....furthermore...we were doing better than WN in Denver prior to First Data forcing us into Bankruptcy. Fact....no other airline in the last 2 years was going to compete with WN heads up when your Oil hedges were in place and Oil was at record highs. Whomever did your hedges at the time was brilliant and made a great decision, no one will deny that. But F9 is still here...and guess what...were paying bills, otherwise...we couldn't aquire important things for an airline...such as fuel? Aircraft Parts? Yes we pay bills. SWA F/A "I have nothing against F9 but no matter how you look at it whether its Southwest or Republic Frontier Airlines as you know it is gone." Also incorrect. Republic has cleary stated we will continue to operate as Frontier Airlines with our current fleet of A/C. Southwest has cleary stated the contrary and will put all of us out of jobs. Please actually think about what you write when you clearly don't know, nor pay attention to the facts. TO L Moody "Frontier has been on bankruptcy life-support since April of last year. " This is just simply not true. Frontier is far from being on Life Support. We have turned a profit for 3 straight quarters.....can any other airline say that? Our cost structure is probably the lowest in the industry atm including WN's. We are running a 90% Load Factor on a daily basis. The money we were paying into first data every month to the tune of milllions and millions of dollars is paid and now all our profit goes to our bottom line. Frontier only needs exit financing to re-enforce it's bottom line , F9 wants a little more cash in reserve to have more liquidity for operations. Were not looking for a savior....just a cash infusion, as do all companies seeking to exit bankruptcy. So many people care to make assumptions on our condition when they simply have zero knowledge of our operation. Southwest actually limited our pass agreements in Denver because they were being inundated with pass requests. You know why? Because no one could non-rev on F9 and they could always get a seat on WN out of DEN. Quit portraying us as this wounded dying entity when it is simply not the truth. The only thing WN has done in Denver is steal people from UA and other carriers here with less presence. F9's share has continued to grow even after WN arrival.
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Republic's regional payrates for mainline employees sounds like a great win for Frontier especially since Southwest's employees are some of the best paid in the industry. Also, I believe the fact that the Frontier brand has received bids should be exciting for the employees of an unprofitable company that could simply shut down. All airlines (even Southwest) are for profit companies in a capitalist economy. If you are a stockholder who wants to get a return on investment from any solution with Frontier, does that make you as "greedy" and "money hungry" as Southwest? Anonymous — Sun, 08/02/2009 - 08:34 --------------------------------------------- It's NOT UNPROFITABLE ANYMORE!!!!!!
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"F9's share has continued to grow even after WN arrival." I believe that's called "the southwest effect."
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I believe that Alaska Air Group should put in a bid to purchase F9. With the slots that F9 has around the country, and the regional carrier Lynx, the Alaska Air Group would def. see advantages to purchasing them. Alaska Air/Horizon Air is a great place to work anyhow, and the F9 employees would love it there. This would be a great opportunity for AS to start getting more presence around the country. Denver could become another hub for Horizon (QX). With the Q400 aircraft already being there, QX could start to also compete with other regionals out of the Denver area. Would this happen? Probably not as the Alaska Air Group is way to conservative, but if they played their cards right, this could be a VERY good opportunity.
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does anyone else find it ironic that f9 employees are coming to this site to brag about themselves and insult swa and then have the nerve to call swa employees trashy or smug? the anger seems misdirected. everuyone seems to agree that f9 has been a good airline (even though they've had poor management and bancrupsy). don't tarnish your good image (or legacy) with bad behavior now.
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I believe that Alaska Air Group should put in a bid to purchase F9. With the slots that F9 has around the country, and the regional carrier Lynx, the Alaska Air Group would def. see advantages to purchasing them. Alaska Air/Horizon Air is a great place to work anyhow, and the F9 employees would love it there. This would be a great opportunity for AS to start getting more presence around the country. Denver could become another hub for Horizon (QX). With the Q400 aircraft already being there, QX could start to also compete with other regionals out of the Denver area. Would this happen? Probably not as the Alaska Air Group is way to conservative, but if they played their cards right, this could be a VERY good opportunity.
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You all aren't being good hosts so far by not understanding that they are in fact a viable airline(through your own ignorance only) and are frustrated by the fact that you want to take a product that they've worked so hard to create and just eliminate it for market share along with a nice size share of them. Their good airline and good customer experience will continue as long as we are allowed to exist. And if you're going to criticize then at least used good spelling. Haha.