Southwest buys AirTran: a merger of LCCs

[sn26567]

Southwest Agrees to Buy AirTran for $1.4 Billion

Southwest Airlines, the largest U.S. low-fare carrier, agreed to buy AirTran Holdings Inc. for about $1.4 billion, giving it access to Atlanta, the world’s busiest airport.

Atlanta, AirTran’s biggest hub, is the largest U.S. market Dallas-based Southwest doesn’t already serve. The purchase also fulfills Southwest’s goal of adding flights to Mexico and the Caribbean, and expands its presence at New York’s LaGuardia and Boston’s Logan airports.

The combined carrier will have 43,000 employees and will serve more than 100 airports in the U.S., Mexico and the Caribbean.

The combination will add Boeing Co.’s 717 to Southwest’s fleet of Boeing 737s. The fleet will total 685 active aircraft.

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[CXRules]

Here's the website for this business transaction: http://www.lowfaresfarther.com/

It has answers to many questions, such as:
- SWA will keep the B717's in the new combined carrier, and all AirTran aircrafts will be repainted and reconfigured into SWA scheme
- the new combined airline will exist DFW because of earlier agreement
- SWA will drop AirTran's Business class and bag fees
- SWA will continue to install wifi in all aircrafts
- No decisions on dropping any AirTran destinations at this point
- This acquisition will enable SWA to strength or add new markets in Atlanta, Washington D.C., New York, Boston, and Florida, as well as entering international markets to the Carribean

- Current fleet:
AirTran
52 Boeing 737-700s (137 seats)
86 Boeing 717s (117 seats)
Southwest
349 Boeing 737-700s (137 seats)
25 Boeing 737-500s (122 seats)
173 Boeing 737-300s (137 seats)
Southwest has 108 firm orders with 37 options through 2017; AirTran has 51 firm orders and no options through 2017.


Based on current operations, with the addition of AirTran, Southwest’s share of current domestic capacity (as measured by available seat miles, or ASMs) would increase from approximately 15 percent to 19 percent. This compares to domestic ASM shares of about 21 percent each for both Continental/United and Delta/Northwest.

[TexasGuy]

This move will for sure keep American Airlines away from Southwest Airlines doorstep American was interested in a possible takeover of Southwest. Would have been an easy integration, fleet wise.