ATLANTA – Southwest Airlines said it is buying AirTran Airlines for $1.4 billion.
“Both companies have dedicated people with kindred Warrior Spirits, who care about each other, and who care about serving Customers. We will continue to enhance our award-winning Customer experiences and high-quality operations,” Gary Kelly, Southwest Airlines’ chairman, president, and chief executive officer, said in a statement.
The cash and stock deal is pending regulatory and AirTran stockholder approval. The purchase is set to close next year, and the combined airline’s operations would be fully merged by 2012.
“It allows us to better respond to the economic and competitive challenges of our industry, and fits perfectly within our strategy for our fifth decade of service,” Kelly said. “It offers customers more low-fare destinations as we extend our network and diversify into new markets, including significant opportunities to and from Atlanta, the busiest airport in the U.S. and the largest domestic market we do not serve, as well as Washington, D.C. via Ronald Reagan National Airport.
“The acquisition also allows us to expand our presence in key markets, like New York LaGuardia, Boston Logan, and Baltimore/Washington,” Kelly added. “It presents us the opportunity to extend our service to many smaller domestic cities that we don’t serve today, and provides access to key near-international leisure markets in the Caribbean and Mexico. Finally, this accelerates our goal to boost profits and achieve our financial targets.”
AirTran operates 138 active aircraft (52 Boeing 737-700 and 86 Boeing 717-200), employs 8,083 employees and had $2.3 billion in revenues in 2009. Southwest operates 547 active aircraft (349 Boeing 737-700, 25 Boeing 737-500 and 173 Boeing 737-300), employs 34,636 employees and had $10.3 billion in revenues in 2009.
Combined, the two airlines serve 106 destinations.