Next up for Southwest: acquisitions
Southwest Airlines Co. chief executive Gary Kelly doesn’t have any offers out to buy another airline, but he expects Southwest to jump in when the consolidation begins to get more serious.
“At some point, I think we’ll probably acquire somebody,” Mr Kelly said in a discussion with Dallas Morning News business editors and reporters. He added:
“There’s bound to be a scenario that we would say, ‘That scenario out of these 10, yep, that one would work for us.’ We’d want to be prepared for that opportunity that presents itself.”
Southwest’s investment in bankrupt ATA Airlines Inc. in 2004 offers a good example of being ready, he said. The airline is well aware of the pitfalls of acquiring another carrier, a strategy it followed in 1993 when it acquired Morris Air and in 1986 when it bought Muse Air.
Mr Kelly described the current airline industry as “very tenuous.” He said the business cycle for the entire decade has been difficult.
He also sees the industry as very unprepared for a slowdown in the economy.
“The industry is not well-hedged, and the balance sheets are in terrible shape,” he said.
Report by David Wilkening
David
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