Southwest Airlines announced yesterday that the Federal Aviation Administration has accepted its plan to acquire Orlando-based AirTran Holdings, Inc.
The purchase is expected to go through by the second quarter.
The Dallas-based budget carrier promised that its acquisition plan would allow AirTran personnel including pilots, flight attendants and mechanics to keep their jobs until the company is issued a single operating certificate.
Southwest brass has stated that is unlikely that the company will keep AirTran’s 70 to 90 pilots based in Milwaukee, a key hub, after the purchase. However, other staff positions are expected to increase with the acquisition.
Southwest has yet to figure out what it will do with AirTran’s codeshare deal with Skywest Airlines Inc.
Southwest said that their purchase of AirTran was imperative in the face of rising jet fuel costs. Without the deal, Southwest and AirTran could have been forced to shrink, the airline said.
The deal allows Southwest to expand domestically by more than a fifth and gives the carrier access to desirable East Coast markets like Atlanta and Washington.
The deal also would bring big changes for Milwaukee’s Mitchell Airport. The budget airliners make up a combined 39 percent share of the airport.
Lawmakers were concerned about the impact to competition the deal would have upon the Milwaukee-area customers.
However, Southwest countered that the acquisition would be good for the region, but would not promise to maintain capacity, citing uncertain fuel prices.
AirTran was often considered a maverick among the airlines, aggressively discounting to one up the competition. Though lawmakers have approved the deal, some expressed worries that the purchase would lead to higher airfares and less competition.
By Adriana Padilla at PeterGreenberg.com.
Related Links on PeterGreenberg.com:
- What Airline Consolidation and the AirTran-Southwest Merger Mean For Travelers
- Southwest Buying AirTran To Further Expansion Plans
- Air Travel News – Airlines & Airports section
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