Airtran has expressed how happy it is that they did not win their fight to acquire Midwest Airlines a fwe years ago and notes that they are the dominant player in Milwaukee now.  My feelings as well.  It is sometimes difficult to grow a business because of the capital requirements but it’s also very, very hard to integrate two airlines and it rarely realizes the expected benefits often touted during merger talks. 

Bob Fornaro, CEO of Airtran, has also expressed interest in what might be happening with industry consolidation through purchases and mergers and says they want to play a part.  However, it isn’t the role you think.  Airtran sees those developments as opportunities to pick up assets such as aircraft, slots and routes that may have to be divested as a result of a merger between two entities. 

I’m pretty sure that Gary Kelly (CEO of Southwest) would add a “hell yes!” to that. 

The airline industry has seen a lot of growth among the LCC carriers (and whatever you think, US Airways is *not* an LCC carrier despites its stock exchange identifier) and virtually all of that growth has been organic.  These airlines do the work of identifying good business targets and building the business of the route properly.  Each route between two cities is rally a “mini” business of the airline.  To build that business requires investment, time and good analytical skills.  Maintaining that business requires good analytical skills and agility. 

Legacy carriers shun executives from LCC carriers.  If I were to take over as CEO of a legacy carrier, I would head hunt avidly among the LCC carriers.  Those are the industry executives with the talent and skills to run an airline today.  Unfortunately, legacy carriers tend to promote within and stick with their legacy management corps.

Filed under: Airline News by ajax