Why southwest bought airtran

To Read the Full Story. Subscribe Sign In. Continue reading your article with a WSJ membership. Resume Subscription We are delighted that you'd like to resume your subscription. Consumer advocate and HLN money expert Clark Howard sees the acquisition as a positive development for air travelers nationwide.

This is an opportunity for a discounter to have the kind of heft and national reach of the full-fare airlines," Howard said. Hobica isn't as optimistic about the deal. While it's unlikely the acquisition will lead to higher fares nationwide, he expects other airlines, such as American Airlines and USAirways, to join in the wave of airline mergers that started several years ago. More consolidation is likely to mean modestly higher fares, he said.

Southwest's funding for the transaction will be from its cash on hand. Southwest Airlines is committed to keeping all stakeholders updated on the progress of the integration process and intends to provide an update, in that regard, in conjunction with its second quarter earnings announcement, currently scheduled for August 4, Bob Fornaro , who has served as Chairman, President, and CEO at AirTran, will move to a new key role today as a full-time consultant for the integration of the two airlines, working closely with Kelly and Jordan to ensure a smooth transition.

As previously announced, Southwest Airlines' headquarters will remain in Dallas , with plans for AirTran's operations and presence in both Orlando and Atlanta still under review. Additional announcements during the integration will be made as plans unfold. The Integration Board will continue to provide overall direction of the integration efforts.

Goersch will report directly to Jordan, and will work closely with Mike Van de Ven. However, AirTran will continue to operate under the AirTran brand with its same policies, procedures, and product features for a period of time. Southwest plans to integrate AirTran into Southwest Airlines over time by transitioning the AirTran fleet to the Southwest Airlines livery, developing a consistent Customer Experience, and transitioning the operations of the two carriers onto a Single Operating Certificate.

Southwest currently expects it will obtain a SOC in the first quarter of and estimates it will take several years to fully transition AirTran into Southwest Airlines to become one airline. In the near term, Customers can expect to interact with each carrier as they always have. Customers flying on AirTran will continue to make reservations or check in at airtran. Customers flying on Southwest will continue to make reservations or check in at southwest. Southwest Employees will assist on scheduled Southwest flights.

It gave Southwest an ability to retain its role as a dominant domestic force while providing a necessary impetus for the airline to expand internationally. Now that the AirTran brand has officially retired and Southwest feels it has a certain level of breadth and depth in the US domestic space, what lies ahead for the emblematic low-cost airline that finds itself facing cost creep in middle age?

For the short term it will focus on opening its new international terminal in Houston and working to add near-international destinations. What would Herb do? See related report: Southwest Airlines aims wrestle rights to serve the Houston-Mexico market from United Prior to the merger with AirTran, Southwest expressed interest in expanding internationally on numerous occasions, but could never quite commit - in part because it lacked the technology to support those operations.

Want More Analysis Like This? CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.

You seem to have JavaScript disabled in your browser. The majority of this website will not function as intended without JavaScript enabled.