May 3rd by Steve Hall
May 3, 2011 – Southwest Airlines on Monday closed on its purchase of all of the outstanding common stock of AirTran Holdings, Inc., the former parent company of AirTran Airways (AirTran).
Both Southwest Airlines and AirTran Airways will operate separately until receipt of Single Operating Certificate. In the near term, customers will continue to interact exclusively with their ticketed carrier. AirTran aircraft will be converted to Southwest brand starting in 2012. Southwest’s Bob Jordan will serve as President of AirTran during integration.
Southwest Airlines is an American airline based in Dallas, Texas. Southwest is the largest airline in the United States, based on domestic passengers carried, as of June 30, 2010.
Southwest operates more than 3,400 flights a day, as of March 2011, utilizing a fleet of 547 Boeing 737 aircraft. Southwest is known throughout the aviation industry as a “low-cost carrier” because of its unique business model. The model includes flying one aircraft type, the Boeing 737, on high-density routes throughout the United States.
Southwest’s “low-cost” business model is further defined by the airline not offering many services, which are a standard offering on most traditional American carriers, such as a First Class cabin, airport lounges, reserved seat assignments, and video/audio programing. By not offering these services, Southwest claims that it can offer lower fares and produce a higher return on invested capital than other airline companies.
“The successful closing of this transaction is a significant accomplishment and marks a great day in the history of Southwest Airlines. I want to thank the People from both Southwest and AirTran who helped us achieve this important milestone,” said Gary Kelly, CEO, Chairman, and President of Southwest Airlines. “Our first order of business is to welcome our new friends from AirTran to the family in a truly Southwest Airlines way.
“The acquisition of AirTran represents a unique opportunity to extend our network into key markets we don’t yet serve, such as Atlanta and Washington, D.C., via Ronald Reagan National Airport. It gives us the opportunity to serve more than 100 million Customers annually from more than 100 different airports in the U.S. and near-international destinations, providing Customers more low-fare destinations as we diversify and expand the well-known ‘Southwest Effect’ to hundreds of additional low-fare itineraries for the traveling public.
“We also celebrate the promise of expanding our presence at New York LaGuardia, Boston Logan, Milwaukee, and Baltimore/Washington, as well as extending our service to many smaller domestic cities that we don’t serve today, with access to key near-international leisure markets in the Caribbean and Mexico,” Kelly said.
“Closing in the current market environment could not be more important,” he continued. “With soaring fuel costs putting many airlines, yet again, in the red, Southwest brings many strengths to bear. Southwest not only brings profitability and financial strength to make this deal feasible, but it also positions the combined companies with an industry-leading investment grade balance sheet to weather the energy-price storm. In addition, it currently positions Southwest to offer improved job security, compensation, and benefits to AirTran Crew Members who join the Southwest family.
Further, Southwest’s profitability and financial strength, along with the United States’ largest Low Fare network, puts AirTran Crew Members in a position to be part of a growing company again, once AirTran is integrated into Southwest.”