You Are Now Free To... Wait And See What Happens
Southwest Airlines CEO Gary Kelly says he's open to the idea of
merging with another airline, though he adds Southwest should make
out fine whether it chooses to remain independent or not.
"I think consolidation provides an opportunity for Southwest
regardless of what we do," Kelly (above) said Thursday, in a speech
before a New York investment conference. "We have enough exposure
to other airlines in the US that if they shrink, we'll
If that sounds familiar, perhaps it's because the CEO of another
low-cost carrier recently made similar statements. As ANN reported earlier this
week, AirTran CEO Bob Fornaro said he is watching
closely for signs of a looming Delta/Northwest union, which could
free up more gates for his airline in Atlanta.
"And of course, I wouldn't eliminate the possibility that we
would participate in some form or fashion in consolidation," Kelly
continued, reports The Dallas Morning News.
That's not the first time Kelly has said publicly he might
support a merger, if the terms are right; he made similar comments in December
2007, stressing at that time it would be Southwest
writing the big check, and keeping its identity.
This week, Kelly echoed those statements... adding the
airline may be willing to move away from one of its best-known
trademarks -- its single-type fleet of Boeing 737s.
Kelly told the Raymond James Growth Airline Conference the
airline is willing to consider a partner that flies other aircraft
types. "If there's an opportunity to acquire another carrier that
does not have 737s, we have plans in mind about how we can deal
with that," he said.
"While that is an impediment to an acquisition, it's not a deal
killer," he continued, before adding he didn't know "exactly how we
would resolve that. But at least in today's environment, where the
aircraft market is still very, very hot, it wouldn't be too
difficult thinking about switching out that fleet... I wouldn't
foreclose the idea that we might operate a second fleet type,
either... But we have no desire to do that."
Of course, Southwest has been through airline mergers and
acquisitions before... with mixed results. The carrier bought Muse
Air Corp. in 1985, followed in 1993 by Morris Air Corp. Southwest
integrated the later into its operations; it operated Muse, renamed
TranStar Airlines, as a separate business, until it closed in
Even as legacy carriers appear to be close to a series of
mergers, however, Kelly said Southwest could chose to do...
nothing. He noted Southwest didn't react when US Airways merged
with America West in 2005.
"They shrank 15 percent, and we gained market share," he