Southwest Airlines' Missed Opportunity: Frontier Goes to Republic

Vaughn Cordle submits:

Southwest Airlines (LUV) CEO Kelly washed his hands of the seniority issue by allowing the pilots union (SWAPA) to decide how Frontier pilots (FAPA) are integrated. Naturally, SWAPA decided to protect the junior pilots, which resulted in Republic (RJET) winning the bid for Frontier.

The junior SWAPA pilots may have been protected, but that security came at a very high price. The opportunity cost for Southwest shareholders is likely in the $1.3 - $1.5 billion ($1.6 - $2 per share) range based on our recent valuation of the acquisition.

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