Southwest Airlines to buy AirTran
The deal gives Dallas-based Southwest a new and significant presence in Atlanta, the busiest airport in the U.S., and Delta's home base. AirTran also brings hubs in Orlando and Milwaukee.
Additionally, Southwest gets a boost in top markets including Boston and New York and expansion to smaller markets.
Gary C. Kelly, Chairman, President, and CEO of Southwest Airlines, says the acquisition of AirTran represents "a unique opportunity to grow Southwest Airlines' presence in key markets we don't yet serve and takes a significant step towards positioning us for future growth."
The combined carrier will operate in more than 100 markets and carry more than 100 million customers.
The buyout, funded mostly with debt, has been unanimously approved by the boards of directors of both companies, and is subject to stockholder and regulatory approval.
The deal comes about a week after shareholders of Continental and United Airlines parent UAL Corp. gave final approval to the merger of those carriers, expected to formally combine later this week into the world's largest airline.
Kelly says Southwest's acquisition of AirTran will help Southwest "better respond to the economic and competitive challenges of our industry."
He says customers will benefit with more low-fare destinations. In addition to adding domestic markets, the deal provides Southwest passengers access to near-international markets in the Caribbean and Mexico.
Kelly says the merger made sense not only financially, but philosophically.
"Both companies have dedicated people with kindred Warrior Spirits, who care about each other, and who care about serving Customers," K elly says. "Ultimately, we are very excited to spread low fares farther and look forward to working together with AirTran to realize the new opportunities and benefits we expect to derive from this combination."
Southwest's acquisition of AirTran is expected to close in the first half of next year
Photo, randomduck, flickr