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We Did NOT See This Coming: Southwest to Buy AirTran

Wow, we did not see this coming at all.  When we saw the news that Southwest is buying AirTran I thought that maybe there was some other Southwest Airlines in Pakistan or something (a la Pakistan’s Air Blue).  But no.  Southwest, the little airline from Texas, will now have 685 aircraft and fly internationally.  Southwest has not been the Old Southwest since Gary Kelly came onboard.  It’s still talked about as if it’s a leisure-focused airline offering only peanuts in exchange for cattle boarding on flights to secondary cities.  But that hasn’t been the case for years.  Southwest already announced service to all 3 New York airports, and has been expanding to major airports like Boston for years.

This acquisition allows them to step up that strategy.  AirTran has gates at Washington National and LaGuardia that allows Southwest to build out those cities in ways they could not without AirTran.  It helps them further their base in Atlanta and create strong growth there.  It allows them to build up service through the Ohio Valley, where AirTran is strong.  And it allows them to launch that international service everyone has asked about for years, with flights to a handful of cities AirTran serves in Mexico and the Caribbean.  It accelerates everything they’ve been doing for years, and no one (that I’m aware of) saw it coming.

The airlines will operate separately until the deal closes, and then the AirTran name will disappear and its planes will be painted in Southwest livery (AirTran flies 737s and 86 717s, marking Southwest’s first foray outside the 737 family).

One amusing note:  Southwest put out a fact sheet that lists some info about both carriers, with one section talking about accomplishments.  Southwest lists things like its lifelong profitabilty; AirTran lists “serves more Coca Cola brands than any other airline.”

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  1. :) Southwest has been the best flying experience I have ever had. They manage to not loose my bags every other flight like some other big Atlanta based carriers. With the expanded coverage they will have now I will almost never have to fly anyone else. YEAH!!!!!!!!!!!! SouthWest

  2. Great job Southwest! We all like surprises.
    Now, surprise with a Mexican airline like Volaris and get a real handle one a big market !
    Mike

  3. This one didn’t surprise me (I’m an Airtran shareholder). When you’re the number one low fare airline with a huge market cap, why not buy the number two low fare airline with a small market cap?

    The only “problems” with the deal are labor. Nobody’s talking about it, but what happens to AirTran’s employees? Do they get stapled to the bottom of the seniority list? And a lot of AirTran employees (like pilots) make about a third less than Southwest employees. I presume they’ll now be paid Southwest wages. That’s going to drive up costs pretty substantially. I suspect there are a lot of routes (the infrequent service to small cities) that will no longer make financial sense.

  4. Surprised in ATL. This industry is never boring.

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