airline consolidation

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

Worried that the megamerger will mean higher airfares? That's not part of the plan, says Continental CEO Jeff Smisek. The post-merger airline is expected to add $1 billion or so to the bottom line over three years, but mostly because of cost-cutting.