Sunday, December 23, 2007

Is Southwest Airlines Buying Airtran ?

Southwest Airlines Buying rival Airtran ?

Don't count out Southwest if the long-predicted wave of airline consolidation ever takes off. "At some point, I think we'll probably acquire somebody," Southwest CEO Gary Kelly told The Dallas Morning News in a recent interview. "There's bound to be a scenario that we would say, 'That scenario out of these 10, yep, that one would work for us.' We'd want to be prepared for that opportunity that presents itself."
Kelly's comments came in a Q & A from the interview that the newspaper runs today. Perhaps the most interesting question posed to Kelly by the Morning News was: "What do you say to an analyst or hedge fund manager who says, "Gary, why don't you eliminate your closest competitor by acquiring Air Tran?"
To that, Kelly responded: "We can't let investors guide the company. That's not to say that investors aren't smart and don't have good ideas, because they do. They just have different motives. We've got to stay true to who we are as a company and build for the long term. ... At some point, I think we'll probably acquire somebody. That's just a reflection of my view that the industry is weak and that there'll be players up for sale, probably in a fire-sale mode, and we'll want to at least be thoughtful about that. We'll still have all the considerations – the fleet, the labor contracts, the seniority issues, the cost implications of it, the cultural aspects of trying to bring two work groups together and on and on and on. We would be concerned about that and always have been."

No comments: