Southwest buying AirTran

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stellarfun

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For $1.4 billion.

According to Southwest's President:

"This acquisition creates more jobs and career opportunities for our combined Employee groups, as a whole. It allows us to better respond to the economic and competitive challenges of our industry, and fits perfectly within our strategy for our fifth decade of service. It offers Customers more low-fare destinations as we extend our network and diversify into new markets, including significant opportunities to and from Atlanta, the busiest airport in the U.S. and the largest domestic market we do not serve, as well as Washington, D.C. via Ronald Reagan National Airport. The acquisition also allows us to expand our presence in key markets, like New York LaGuardia, Boston Logan, and Baltimore/Washington. It presents us the opportunity to extend our service to many smaller domestic cities that we don't serve today, and provides access to key near-international leisure markets in the Caribbean and Mexico. Finally, this accelerates our goal to boost profits and achieve our financial targets."
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Boston Logan chief: Southwest-AirTran merger could have upside there
By Ben Mutzabaugh, USA TODAY

At least one major airport official sees an upside in Southwest's plan to purchase low-cost rival AirTran. Thomas Kinton Jr., the CEO of the Massachusetts Port Authority that overseas Boston's Logan airport, told me this morning in Pittsburgh that he thinks Boston could benefit from the merger if it goes through. He said the airport "could see some growth opportunities" from the deal, noting that Southwest and AirTran overlap on only one route (Baltimore/Washington) from Boston.

Indeed, the Southwest-AirTran tie-up -- if approved -- likely would give the combined carrier a large-enough low-cost presence at Boston to pressure JetBlue, which recently has grown to become the airport's No. 1 carrier in terms of departures.

And, already, Southwest and JetBlue appear to have sparred over Boston, where Southwest's recent entry marked one of its first incursions into one of JetBlue's northeastern strongholds.

In 2009, JetBlue announced it would begin flying to Boston from Baltimore/Washington -- one of Southwest's busiest airports -- after Southwest announced plans to fly to Boston. JetBlue has denied a connection, but Boston remains its only destination from BWI.

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More recently, JetBlue announced plans for service from Newark to Boston, a move that come hours after Southwest announced a deal that gave it access to that New York-area hub.
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http://travel.usatoday.com/flights/...rtran-merger-could-have-upside-there/125328/1
 
Boston only stands to benefit from this. Southwest made the AirTran move to gain an increase in important air markets, like Boston and Atlanta.

I can see them adding some new flights, Florida comes to mind. Flights to Ft. Lauderdale, Orlando, Tamp and even Ft. Myers would all work. I also hope this means they will add service to Nashville finally.
 
Actually, I see this as a slight net negative for BOS. First off, Airtran already fly at least seasonally to most of the major Florida markets (only FLL and/or PBI stand out as potentials). Furthermore, the two companies will have a combined weekday schedule of up to 15 flights each way on nothing smaller than a 717 to BWI (bearing in mind that WN also has up to 8 flights to PHL). Even if they manage to bump JetBlue from the market, that kind of service is not sustainable in the long-term (given until recently it was only a few Airtran flights and some regional jets).

So, BOS will probably be out at least some BWI service (probably five trips daily - 10 flights sounds a bit more reasonable given the transfer potentials), and there's not too much growth in Florida in the form of additional markets, unless they decide to open TLH or PNS (though additional flights to existing markets or making markets like SRQ or RSW year-round could happen).

The plus side, however, is that it does give the combined FL/WN enough market share in Boston to make it worth going to bat against B6, so there could be some aggressive growth to either try and stop B6 from expanding into new markets (HOU comes to mind) or minimize their increasing dominance at the airport.

That said, I think should they choose a more modest, organic growth pattern, it will either be a wash for BOS or even a modest decrease in service over current levels. This mainly depends on whether or not they decide to shift the excess BWI

Lastly, I agree BNA is a market crying out for LCC service (I think a 1 or 2x daily on a 717 or 73G could work, even when DL couldn't make a CRJ work) and it's also a market that B6, after its failure to make JFK service work, does not serve.

Edited for atrocious grammar.
 
what's B6? what's WN?

I assume all the three-letter abbreviations are airport codes, but why LCC (seems to be an obscure airport in Italy) and CRJ (Australia)?
 
Last edited:
B6 = JetBlue's IATA code

WN = Southwestern's IATA code.

Both are used as shorthand for typing the carriers name.

LCC = US Airways Group stock ticker for the entire group of airlines.

CRJ = smaller jet from bombardier.


someone correct me if i am wrong on anything.
 
Mostly. LCC = Low-Cost Carrier.

Sorry all. Self-avowed aviation geek here. Going forward I'll try and write in more layman terms.
 
erikyow said:
Actually, I see this as a slight net negative for BOS. First off, Airtran already fly at least seasonally to most of the major Florida markets (only FLL and/or PBI stand out as potentials). Furthermore, the two companies will have a combined weekday schedule of up to 15 flights each way on nothing smaller than a 717 to BWI (bearing in mind that WN also has up to 8 flights to PHL). Even if they manage to bump JetBlue from the market, that kind of service is not sustainable in the long-term (given until recently it was only a few Airtran flights and some regional jets).

So, BOS will probably be out at least some BWI service (probably five trips daily - 10 flights sounds a bit more reasonable given the transfer potentials), and there's not too much growth in Florida in the form of additional markets, unless they decide to open TLH or PNS (though additional flights to existing markets or making markets like SRQ or RSW year-round could happen).

The plus side, however, is that it does give the combined FL/WN enough market share in Boston to make it worth going to bat against B6, so there could be some aggressive growth to either try and stop B6 from expanding into new markets (HOU comes to mind) or minimize their increasing dominance at the airport.

That said, I think should they choose a more modest, organic growth pattern, it will either be a wash for BOS or even a modest decrease in service over current levels. This mainly depends on whether or not they decide to shift the excess BWI

Lastly, I agree BNA is a market crying out for LCC service (I think a 1 or 2x daily on a 717 or 73G could work, even when DL couldn't make a CRJ work) and it's also a market that B6, after its failure to make JFK service work, does not serve.

Edited for atrocious grammar.
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BOS-BWI was a market that needed competition and some lower fares. Compared to say 2 years ago, fares are down a good amount, namely due to the fist fight between JetBlue and Southwest. Also, the O&D numbers are up as a result of the low fares, makes sense. I do think the combined AirTran and Southwest will trim the BOS-BWI schedules and that's not a bad thing. BOS-BWI will continue to be well served.

As far as BOS-Florida is concerned, Logan is well served in terms of destinations served. Not many cities can support service to the secondary Florida airports, like Tallahassee, Sarasota, Pensecola, etc. I think Southwest will be adding non-stop year round service to at least Orlanda, Tampa and Ft. Lauderdale. Ft. Myers and West Palm Beach also would work.
 
erikyow said:
Mostly. LCC = Low-Cost Carrier.

Sorry all. Self-avowed aviation geek here. Going forward I'll try and write in more layman terms.
Click to expand...

no need to apologize! Definitely enjoy learning the different jargon! Also, gave me about an hours worth of wikipedia reading on a down day! :)
 
Exactly. Meaning that in all likelihood, the Airtran/Southwest merger will be zero-sum for Boston - some taken away from the excess in BWI and given to beefing up the existing Airtran schedules to Florida. Orlando already served year-round and Ft. Myers and Sarasota are served seasonally (my comment about Tallahassee or Pensacola was merely in jest, as there is almost no market to those cities) and, as mentioned, some growth into new markets as a way to preempt jetBlue (Nashville, a city with service to Providence, but not Boston and Houston-Hobby). In the end, though, I don't see this as being a big boon.

The more unlikely scenario that I see for growth is that Southwest decides it has enough critical mass to go head-to-head with jetBlue and starts a major expansion. But, that said, jetBlue has gained a loyal base in Boston and that has propelled it into the number one carrier in many respects. The much talked about 'Southwest Effect' of the 80s and 90s will not be as pronounced here because airlines like jetBlue and Airtran have already built up the traffic, while the legacy carriers retreat. So, any battle would be ugly, especially since jetBlue isn't going to give up its number two city to the new kid on the block (in terms of service, obviously :) ).

I'll also be curious to see what Southwest decides to do with the structure of Airtran. Airtran is the number two airline in Atlanta and also has significant operations in Milwaukee, in addition to the presence at Baltimore. Given how large a market Atlanta is, I imagine Southwest can continue to cohabitate with Delta, but Milwaukee is just a stone's throw from Chicago-Midway, where Southwest has a large presence. That could have a potential, albeit small, effect on operations in Boston.
 
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