Will - If WN wins, let's touch base in a couple years when the last remnants of F9 are gone so I can hand you a piece of paper with the words of your post and watch you eat them.
Oh, to the poster about the "Southwest Effect"...its been dead for years. Thanks. Southwest no longer has pricing power in most markets, but they do have the public perception that they are always the lowest. Yes they do provide pricing breaks in typical walk up same day travel fares, but any fare pressure on the market is due to capacity dumping. This is an airline that will publicly state that airlines need to consolidate, but then go into a market a dump a ton of 737s that will fly at 50-60% full. Their system wide load factor is amongst the lowest in the industry around 72% according to the SEC filing last week. There are reports that their loads out of Denver are pathetic right now on a lot of flights, though some markets are really strong. But there would be enough capacity currently in place to absorb the majority of the Frontier passengers that current fly on routes both serve. Not to forget, Southwest will utilize 1 and 2 stop service to funnel passengers in and out.
Last point today...THANK YOU to the person that brought up First Data. The credit card merchant company Frontier uses. For those of you who ACTUALLY want to know what put F9 into Chapter 11...look at First Data. In 2008 they served notice to F9 to change the terms of their contract and delay the time frame when F9 would be receiving the credit card payouts. This would have KILLED their cash flow. Their only route to keep this from happening was to go under bankruptcy protection to keep the changes from going into effect. Unfortunately, airlines are high risk businesses and you aren't going to find credit card merchants jumping at the opportunity to serve them.
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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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