Southwest Airlines + AirTrain = SouthTran? AirAirlines? WestTrainAir?
They can work out the name later, but the big news for jetsetters the world over is Southwest Airlines’ plan to buy AirTran for roughly $1.42 billion, or the cost of checking eight bags on a single Delta flight. Southwest will fork over $670 million in cash and take on $2 billion in AirTran debt. Sounds like a…good deal?
Southwest Airlines’ purchase will expand its sky empire in Boston and New York, among other cities. It will also set Atlanta as the stage for an epic battle between the newly joined Southwest and AirTran with Delta, which has a home base in the ATL. AirTran also has hubs in Orlando and Milwaukee.
Southwest and AirTran said in a joint statement their combined forces will fly out of more than 100 airports and carry more than 100 million customers.
Although the buyout was announced this morning, it’s expected to take until 2012 for Southwest and AirTran to be fully integrated. That’s due in part to the required approval from regulatory agencies and shareholders at both companies.
If you’re reading this and thinking, “Now Southwest and AirTran are merging? Doesn’t this happen once every week?” you’re not far off. Southwest tried to buy Frontier Airlines last year but lost the auction for the bankrupt airline company to Republic Airways Holdings. The gavel hit the block for Frontier at just $108.8 million.
On top of that, at the end of this week Continental Airlines and UAL Corp., which owns United Airlines, will merge. That joint behemoth (please be called Con Air!) will trump the size of Delta. Delta, in turn became the largest airline when it acquired Northwest Airlines in 2008.
Southwest Airlines already carries more passengers than any airline in the U.S. Guess that “Bags fly free” idea paid off.
With the Associated Press
