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Robert Trigaux

Southwest Airlines nabs Orlando-based AirTran in merger of discount carriers

27

September

Airtranairplane.jpgWake up and good morning. In the first major merger among healthy U.S. discount carriers, a Texas-based airline is buying one headquartered in Florida. Orlando-based AirTran Holdings said it has agreed to be acquired by Southwest Airlines in Dallas in a transaction currently valued at more than $1.37 billion. Including existing AirTran Holdings, Inc., indebtedness and capitalized aircraft operating leases, the aggregate transaction value is approximately $3.42 billion.

Why do such a deal? Southwest CEO Gary C. Kelly says the deal with AirTran represents "a unique opportunity to grow Southwest Airlines' presence in key markets" -- Atlanta is No. 1 in this case -- "we don't yet serve and takes a significant step towards positioning us for future growth."

SouthwestAirlinesairplane.jpgKelly also tipped his hat to a common culture shared by the two airlines. "Both companies have dedicated people with kindred Warrior Spirits, who care about each other, and who care about serving customers," he said.

The two airlines currently serve 106 communities from coast-to-coast, Mexico and the Caribbean, with 685 all-Boeing aircraft and nearly 43,000 employees.

The proposed deal follows Southwest's failed effort to acquire Denver-based Frontier Airlines earlier this year and would revive its stalled efforts to launch international services by accessing AirTran's network to the Caribbean, the Wall Street Journal reports here.

Here's Southwest's news release on the deal. And here is AirTran's release. There are more details forthcoming later this morning here.

-- Robert Trigaux, Times Business Columnist

 

[Last modified: Monday, September 27, 2010 8:52am]

    

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