Southwest muffed Frontier deal?

Contrary to what Southwest Airlines’ top management claimed just a day or two ago, its failed bid to get Frontier Airlines out of bankruptcy was NOT just, perhaps not even primarily, due to a pilots’ seniority wrangle.

Instead, with antitrust concerns, fleet concerns, and other things all weighing in the back of the minds of Frontier staff, and Frontier creditors, it appears that Southwest’s bid had little due diligence behind it, an observation reinforced by the fact Southwest ain’t talking further right now.

Boy the “golden” airline is just having one management snafu after another this year.

And, its reputation for being a go-to, if you will, to do a deal like this, also just took a hit.

Southwest-Frontier deal is dead

Frontier pilots refused to swap a 40 percent wage hike in exchange for surrendering all their seniority, so Southwest’s bankruptcy offer for Frontier is dead. Republic, which previously got Midwest out of bankruptcy, is the winner.

Per the story of what it did to Midwest’s pilots, the Frontier pilots may not have made the right decision, but that’s a toughie in the dog-eat-dog world of pilot seniority, if you have any knowledge of that.

And, despite some analysts’ pooh-pooh-ing, Republic is a definite winner.

Southwest Airlines could have a winner in Frontier

Besides getting Frontier’s gates and routes at Denver if Southwest buys the carrier out of bankruptcy, it gets more.

That “more” includes the possibility of changing its business model.

Could Southwest move at least somewhat more in a hub-and-spoke direction? Could it keep Frontier’s regional line, Lynx? Unthinkable as those ideas might have been just a couple of years ago, maybe so.

If Southwest stayed with the one-plane model for its main line, and put a “one-plane” model at work for Lynx, too, just a different one plane, and just tweaked its current modified hub system, it could stay in the clover.

Southwest bullish in the face of high fuel costs

Southwest Airlines is expanding Denver service, with flights to San Francisco and Omaha, among other things, at a time when other airlines are cutting flights in order to force up costs, rather than adding more and more surcharges to flights.

To do so, Southwest will be keeping two airplanes that it had planned to retire. In all, it now plans to expand its fleet by a net of 13 airplanes this year, compared to the seven that it projected on April 17.

In all, Denver service will grow from 79 to 95 daily departures.

As often is the case, Southwest is playing against type. Since it continues to turn profits, it has the leverage to do this. Given that Frontier has filed for bankruptcy, Southwest has room to do this, and that can’t help Frontier’s reorganization plans.

This will also put pressure on United’s Denver hub, just as we all wonder whether it’s merger talks with Continental are still off, or about to turn on again.

Hmm — is a Continental/Frontier, or United/Frontier, marriage a possibility?

Funny, just a few years ago, Southwest was acting like somebody had put a gun to its head to force it to return to Denver. (It had refused to fly DIA for several years.)

That said, I’m still surprised that Southwest hasn’t cast an eye on Colorado Springs. The Springs has two problems; the airport is just accessed by a boulevard and not a freeway, and winter weather. But, the weather isn’t that cloudy, and if the Springs’ city government said it would provide freeway access as an economic development incentive, I think Southwest would have to jump; at the least, it would beat DIA over the head for lower landing fees, a Southwest specialty tactic.