Alaska Airlines CEO defies all, predicts growth without merger

ALASKA Airlines CEO Bill Ayer says no to merger in defiance of analysts' comments that the Seattle-based carrier is too small to operate alone, reports the Seattle Times.


"The history of mergers in this industry is not a good one," Mr Ayer said. "There have been rumours about somebody buying Alaska Airlines as long as I've been here and probably longer than that." He became the carrier's CEO almost a decade ago.


The report said that solid profits and a high stock price keep the airline and its 7,700 jobs in Seattle safe for now.


But Hudson Securities analyst Daniel McKenzie said Southwest's acquisition of AirTran "ultimately forces Alaska to become part of a bigger airline". This is due to the assumption that smaller carriers will face challenges competing with the low prices, stronger network and more powerful balance sheet of an enlarged Southwest.


"We think of them like Switzerland in terms of being neutral," said Dahlman Rose & Co analyst Helene Becker, adding that that in the next industry downturn mid-sized airlines such as Alaska will merge, naming American, Delta and Hawaiian as possible buyers.


Last year, Alaska Airlines achieved a profit of US$251 million, and Mr Ayer believes the airline does not need to add much to reach three to six per cent growth. "Adding three to six long-haul trips a year would give us three to six per cent growth," he said.
(Source:http://www.schednet.com)