Ganesh Jayaram’s Post

JetBlue is trying to acquire Spirit AeroSystems. My strategic warning lights are flashing. The debate seems to center on whether or not it is anti-competitive. That's less important than asking if they can make it work. I don't think they can. First, in general M&A transactions have high odds of success. Our research says only 1/3 achieve the results promised. Others give the odds at 50/50. At best M&A is an expensive coin toss. Second, Jet Blue does not have the infrastructure and other competencies to deliver value-creation post transaction. In my book, Value-Creating Growth, I used the example of USAir's decision to move from a Southwest Airlines style regional player to a national and even international airline. As I predicted they failed and were acquired by American Airlines at a bargain price. As a Jet Blue traveller I've been impacted by the decline in customer service as they've broadened their destinations including, gasp, to Europe. If they can't handle the building out of the original business model how will they perform by acquiring a new model as a no frills, low cost airline? My guess is not well at all. While it is natural for management to overreach it is also the responsibility of the board of directors to engage in the strategy dialogue, to encourage the pursuit of opportunity but also to put a break on bad ideas. Let's hope they are not as inept as was the OpenAI board or Theranos or ... #strategy #mergers #governance

Why Did Continental & United Airlines Agree To Merge? In September 2010, both airline's shareholders voted for the merger, creating for a time the world's largest airline. They decided to keep United Airlines as the new airline's name because both sides felt it had more value and that more people were familiar with it. In a nod towards Continental, it was agreed that Continental's gold globe logo would replace United's colorful tulip logo on all the new airline's aircraft tails. Read more at: https://lnkd.in/dFnBcrhS #AviationTalk #aviationnews #avgeek #aviation #aviationhistory

Hawaiian Airlines Open To Acquisition By Other Carriers A few weeks ago, the world was stunned by the announcement of an acquisition of Hawaiian Airlines by Seattle-based Alaska Airlines. If approved, the acquisition will be worth $1.9 billion and will see the two airlines continue to operate under their respective brands and fleets. The regulatory process will take quite some time and may face opposition from the United States Department of Justice, as is the case with the pending merger of JetBlue and Spirit Airlines. Read more at: https://lnkd.in/dcp5gv-z #AviationTalk #aviationnews #hawaiianairlines #avgeek #aviation

Although I share no specific loyalty with Spirit Airlines or JetBlue, I’ve flown on each in the past and they’re fine. I think it’s incredible nonsense that a federal Judge intervened and wouldn’t allow them to merge. They had a planned 3.8 billion dollar deal. The Judges reasoning was it would hurt customers that relied on the low fares. We have dozens of airlines available stateside and the government shouldn’t be involved in what price a company can charge, that should be up to supply and demand. As far as “relying” on low fares, I’d like to know who is “relying” on the fare price in order to work for a living. Virtually no one. Vacationing is not “relying”. What are your thoughts about the government getting involved? The below mergers were equal or bigger and went through. What’s the deal? Verizon and Vodafone Heinz and Kraft Pfizer and Warner-Lambert AT&T and Time Warner Exxon and Mobile Google and Android Disney/Pixar and Marvel Microsoft and Nuance Facebook and WhatsApp Salesforce and Slack United Technologies and Raytheon Technologies Paypal and eBay Bristol-Myers Squibb and Celgene #airlines #airline #commercialairlines #spiritairlines #jetblue #spirit #flight #planes #business #regulation #courts #litigation #negotiation #businessdeals #aircraift #airport #airports #news #aviation #aviationindustry #aviationnews

Potential shake up in the Canadian aviation market. A Lynx Air and Flair Airlines merger? I've been hearing some rumors so did a quick dive into what this could mean. Operational Synergy: Both carriers predominantly operate Boeing MAX aircraft, suggesting a smooth merger process. Flair brings 18 aircraft to the table, including two 737-800s, while Lynx operates 9 MAX aircraft, with orders for 8 MAX 8s and 21 MAX 200s in the pipeline. Market Impact: Combining these two could add a formidable competitor to the top three Canadian carriers which are Air Canada, WestJet, and Jazz Aviation LP. Factoring in the order book, a merger could position the combined entity as Canada’s second-largest low-cost carrier and the fourth-largest commercial airline operating passenger flights. Lessor Exposure: As both fleets are 100% leased I've included a snapshot from #IBAInsight highlighting the lessors involved in this potential consolidation. I'll be keeping a close eye on developments and if you'd like to do the same please feel free to reach out to see how you can get access to this data as well! For those interested in diving deeper, please reach out for a no-pressure, no-obligation demo of IBA Insight. We'll tailor the demo to a case study that’s directly relevant to your current specific interests so that you get a tangible takeaway.

What's New to The Street... High-flying perks uncovered: Boeing executives soared on over $500,000 worth of personal trips aboard company jets, revealed in a recent review.✈️ Follow New To The Street for more! #Boeing #CorporateEthics #ExecutivePerks #businessnews #business #news #newtothestreet

Over the years, the landscape of the commercial aviation industry in the United States has undergone significant transformation, characterized by the gradual expansion and consolidation of airlines. #Aviation #USairlines #StrategicMergers #IndustryShift #AviationLandscape https://lnkd.in/dj5Ch3in

Southwest Airlines culture secrets that apply to any company; JetBlue seeing red (in several ways) and debate over whether big airlines are crushing competitors or small airlines are hurting from lack of long international routes and loyalty program profits. (Maybe both are true?) #southwestairlines #airlines #jetblue #travel #podcast #corporateculture

Spirit Airlines Makes Another Bold Move #Bold_Move: Amidst operational challenges following the collapsed merger with #JetBlueAirways, #SpiritAirlines finds itself in a period of strategic reevaluation. With plans to delay the purchase of new #aircraft and implement route rearrangements, the airline aims to navigate the turbulence in the aviation industry. Additionally, Spirit has announced the #furloughing of #pilots, signaling efforts to streamline costs and secure fresh capital amidst financial uncertainty. As the airline recalibrates its approach, the industry watches closely to see how #Spirit will navigate these obstacles and emerge stronger in the competitive landscape of ultra low cost carriers and #airtravel itself. https://lnkd.in/gnhfVT9B

EU: Holy Grail Guard in Airline Competition? What Jetblue and Spirit just faced and experienced in the US, Lufthansa is confronted with on another level here in Europe: The EU just announced an ongoing detailed investigation in the planned ITA taking over. These ongoing in-depths probes are intendend to grant a fair level playing field for all competitors around, however, these processes initiated by EU could severely damage Lufthansa's strategic plan in ITA.