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News & Advice

Change is in the air as Southwest plans AirTran purchase

US-based carrier Southwest, the largest airline in the world by passenger numbers, is to buy its competitor AirTran, it announced September 27, promising to generate "hundreds of millions in annual savings for consumers."

If the deal is approved, it will create a huge low-cost carrier flying 685 aircraft to over 100 different airports in the US, Caribbean and Mexico.

Southwest boss Gary Kelly said that the acquisition would allow Southwest to grow in "key markets we don't yet serve," which are likely to include extra locations for the carrier such as Atlanta (the world's busiest airport), and could mean more flights to New York and Washington, where AirTran holds several slots.

It may also signal the start of Southwest's first-ever overseas service, as AirTran's destinations currently include the Caribbean and Mexico.

On a joint website, the airlines promised that the deal would mean lower fares to customers, as the expanded carrier will be able to expand "the well-known 'Southwest Effect' of reducing fares and stimulating passenger traffic."

In a piece of good news for existing AirTran customers, who must pay a minimum of $20 for checked bags, the airlines said that they intended to scrap bag fees so that the product was consistent with Southwest's bag policy.

However, seat assignment and business class services on existing AirTran flights are also likely to be scrapped (also in line with Southwest's policy).

The proposed deal is the latest in a series of consolidation moves that will shake up the US airline industry.

Last week, United and Continental confirmed that they had received clearance from shareholders and US regulatory authorities for their merger, which will create a single entity serving an estimated 144 million passengers annually.