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Southwest Completes Acquisition of AirTranMay 2, 2011 By: George Dooley Travel Agent
Today’s completed acquisition of AirTran by Southwest Airlines represents a unique opportunity for Southwest to extend its network into key markets the airline does not yet serve, such as Atlanta and Washington, D.C., via Ronald Reagan National Airport, said Gary Kelly, CEO, chairman and president of Southwest Airlines. Southwest said that the total transaction value of the purchase is $3.2 billion.
“Today, we also celebrate the promise of expanding our presence at New York La Guardia, 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.
Net annual synergies are estimated by Southwest to exceed $400 million by 2013. One-time costs related to the acquisition and integration of AirTran are currently estimated to be approximately $500 million.
Bob Jordan, Southwest’s executive vice president of strategy and planning, will serve as president of AirTran effective today. 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.
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.
Work has already begun to integrate AirTran into Southwest Airlines. 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 2012 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.com or by calling 800-247-8726, and visit AirTran kiosks and ticket counters. AirTran employees will assist on scheduled AirTran flights.
Customers flying on Southwest will continue to make reservations or check in at southwest.com or by calling 800-435-9792, or at Southwest kiosks and ticket counters. Southwest employees will assist on scheduled Southwest flights. Customers will continue to earn and redeem through the respective frequent flier loyalty programs, as they do today, until those programs are combined over time.
Visit www.airtran.com or www.southwest.com.