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Tampa's airport expects growth from Southwest's purchase of AirTran

Tampa International's biggest airline wants to get bigger.

Southwest Airlines announced Monday that it had a deal to buy rival discount carrier AirTran Airways for $3.4 billion, including cash and debt.

A larger Southwest will bring more competition and lower fares to major airline hubs such as Atlanta, as well as smaller cities now served by AirTran, said the airlines and some consumer advocates.

"It's a real opportunity for an airport like Tampa,'' said Christopher White, spokesman for AirTran, headquartered in Orlando. "They're a bigger competitor, a stronger competitor.''

Southwest already carries one in three TIA travelers. The enlarged carrier would control just over 40 percent of passenger traffic.

Southwest also could help Tampa International expand its small offerings of flights to destinations outside the continental United States, said Trudy Carson, TIA's director of air service development.

AirTran launched short flights from East Coast cities to Caribbean vacation spots over the last year. Daily AirTran flights from Tampa to San Juan, Puerto Rico, begin April 5.

Southwest, which doesn't fly outside the United States, will study AirTran's short-hop international service and is "committed to going international,'' CEO Gary Kelly told analysts Monday.

The larger airline will remain true to its roots, he said. The airline will keep the Southwest name, logo and aircraft colors. It won't charge for checked bags or offer reserved seats or any service beside coach.

"We are not contemplating two separate airline brands,'' Kelly said.

Southwest's appetite for growth drove the deal. The airline thrived by expanding outside its Texas home — to California and Chicago in the 1980s, the East Coast and Florida in the 1990s and more recently into big city airports like New York LaGuardia and Boston's Logan International.

As fuel prices spiked in 2008 and the recession took hold, Southwest pulled in its horns. It had no plans to enlarge its fleet in 2011 and 2012 for a major expansion.

The deal gives Southwest a foothold in Atlanta, a big business travel market controlled by Delta Air Lines.

Southwest touted a finding by Campbell-Hill Aviation Group that more expansive low-fare service in Atlanta alone could stimulate more than 2 million new passengers and more than $200 million in consumer savings annually.

AirTran also would give Southwest entry to Ronald Reagan Washington National Airport and a bigger footprint at New York's LaGuardia Airport.

"The acquisition of AirTran represents a unique opportunity to grow Southwest Airlines' presence in key markets we don't yet serve," Kelly said. "We think of ourselves as a growth company, and we're trying to make it happen."

Travel professionals and consumer advocates split on whether a bigger Southwest will be good for consumers.

Fares went "spectacularly low'' when Southwest invaded Minneapolis, a Delta hub, and LaGuardia, said Rick Seaney, CEO of FareCompare.com, a fare shopping site. But on individual routes where Southwest and AirTran go head-to-head — such as Tampa-Baltimore and Tampa-Indianapolis — prices inevitably go up. "Southwest is like every other airline,'' Seaney said. "Why discount when your planes are 90 percent full?''

Others warn the deal heats up consolidation of the industry. Fewer competitors could lead to higher fares. The Delta-Northwest merger and recently approved United-Continental combination left just four remaining network airlines.

"Now (with) Southwest's move to buy fellow low-cost carrier AirTran, we're beginning to reach a tipping point,'' said Bryan Saltzburg of TripAdvisor.com.

Steve Huettel can be reached at huettel@sptimes.com or (813) 226-3384.

Tampa's airport expects growth from Southwest's purchase of AirTran 09/27/10 [Last modified: Wednesday, September 29, 2010 4:58pm]
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