Southwest Buys AirTran as Airline Consolidation Continues

Southwest Airlines (LUV), one of the earliest discount airlines, will buy rival AirTran (AAI) -- another sign of consolidation in an industry that has witnessed the mergers of Northwest with Delta (DAL) and United with Continental (CAL) over the last two years.

Southwest announced that it would make the purchase for a combination of cash and Southwest Airlines' common stock. Southwest said that at its stock closing price of $12.28 on Sept. 24, "the transaction values AirTran common stock at $7.69 per share, or approximately $1.4 billion in the aggregate, including AirTran's outstanding convertible notes." That is 69% above AirTran's closing price on Friday.

"Both companies have dedicated people with kindred Warrior Spirits, who care about each other, and who care about serving Customers. We will continue to build upon our outstanding Customer experiences, strong and unique Cultures, and award-winning, safe operations," said Gary C. Kelly, chairman, president and CEO of Southwest Airlines.

The news sent AirTran shares flying nearly 65% higher in premarket trading.

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Hmmmmm.. Wonder how this is gonna affect the BIG picture (airline-wise) in this county. Pretty soon, there'll only be 3-4 airlines left too fly.

September 28 2010 at 6:56 AM Report abuse rate up rate down Reply

I wonder how long it will take Southwest to phase out Air Tran's 717's with their 2 by 2 "first class" style seating, just like Republic did when they took over Midwest Airlines and replaced their beautiful 717's with smaller EMB 170's, fired ALL of their pilots and effectively ruined a wonderful service oriented, passenger friendly airline. Midwest is now merging with Frontier. And now, flying with them is like taking the bus!

September 27 2010 at 11:57 PM Report abuse +1 rate up rate down Reply

this is another way to make America harder than ever life will become more and more expensive this is monopoly make less people own the air transportation which will make america more unsecure americans think backward now i'm sorry our sociaty heads upside down you will see one city own by one or two people 500 people will buy the whole land in america and stock the country from moving forward while we focus only on terrorist and politic we be the big loser one day our politic rep or dem will distroy the country step by step.

September 27 2010 at 10:14 PM Report abuse rate up rate down Reply


September 27 2010 at 10:06 PM Report abuse +1 rate up rate down Reply

well that sucks, another airline I won't fly!!!

September 27 2010 at 9:40 PM Report abuse rate up rate down Reply

we love southwest,been flying withthem evert since ata went out. the new boarding proces is awsome.the attendants are always friendly.looking forward to be able to use airtran. and some of the places they fly

September 27 2010 at 8:58 PM Report abuse +2 rate up rate down Reply

say goodbye to $99 southwest fares!

September 27 2010 at 7:33 PM Report abuse -1 rate up rate down Reply

Boy this is good news for people who fly out of Memphis

September 27 2010 at 6:00 PM Report abuse rate up rate down Reply
aol weather

robert southwest has the terrible policy of not giving out specific seat assignments which means it is a free for all when you board the plane.

September 27 2010 at 5:54 PM Report abuse -3 rate up rate down Reply
1 reply to aol weather's comment

actually you are given a boarding number, board in order, and sit where you want. not exactly 'free-for-all.' it always seems funny to me that boarding is faster than when there are assigned seats.

September 28 2010 at 12:11 AM Report abuse +1 rate up rate down Reply

I had sort of thought that Alaska might try for Air Tran. Although Alaska is very service-oriented, they might have wanted the routes and changed the culture. This will only be the second time Southwest has grown by acquisition. Can anyone name the first time?

September 27 2010 at 3:35 PM Report abuse rate up rate down Reply
1 reply to Fred's comment

Morris Air...

September 27 2010 at 6:52 PM Report abuse rate up rate down Reply