NEWS: Southwest Airlines Holds a Fund Raiser
Ok...not a fund raiser. Southwest Airlines has issued $300 million in unsecured notes that will mature in 2017. Since Southwest is a shining star in an otherwise dismal industry the notes have gotten a warm reception from those who analyze this kind of thing. Just another day on Wall Street you say? Not so fast, let's step back and ask the obvious question. What's Southwest need with $300 million all of a sudden?
Now step back further and take a look at the industry and some plausible theories can be seen.
First of all, Southwest recently bought a chunk of ATA Airlines and no matter what you'd like to think they didn't do it out of the goodness of the hearts. Sure, Southwest benefits via some code sharing with ATA but there's no way that's all they are looking for. Perhaps, after getting a closer look at the bankrupt airline Southwest sees an opportunity to do something more with ATA sooner than expected.
Second, with US Airways tottering on the abyss perhaps Southwest is preparing to really make a move on their territory. They've been dabbling at it by backfilling where US Airways has reduced service but a complete implosion will leave a gaping hole in the market. Southwest will want to move fast if the opportunity presents itself. No doubt they are keeping a bedside vigil for United Airlines as well.
Now step back further and take a look at the industry and some plausible theories can be seen.
First of all, Southwest recently bought a chunk of ATA Airlines and no matter what you'd like to think they didn't do it out of the goodness of the hearts. Sure, Southwest benefits via some code sharing with ATA but there's no way that's all they are looking for. Perhaps, after getting a closer look at the bankrupt airline Southwest sees an opportunity to do something more with ATA sooner than expected.
Second, with US Airways tottering on the abyss perhaps Southwest is preparing to really make a move on their territory. They've been dabbling at it by backfilling where US Airways has reduced service but a complete implosion will leave a gaping hole in the market. Southwest will want to move fast if the opportunity presents itself. No doubt they are keeping a bedside vigil for United Airlines as well.
posted by The ACK at
22:25
