Merger Would Open New
Markets For Southwest
Sep 28, 2010 08:16 PM
Southwest's bid to acquire AirTran, if
approved by government regulators,
would give the major low-cost carrier a
presence at Reagan Washington National, a
slot-controlled airport that Southwest has
long attempted to enter, and at Hartsfield-
Jackson Atlanta International, the largest
domestic market that Southwest currently
doesn't serve.
The proposed merger, announced on
Monday and valued at $1.4 billion, calls for
Southwest to acquire all of AirTran's
outstanding common stock for a
combination of cash and Southwest
common stock.
After the transaction is completed, AirTran
Chairman, President and CEO Bob Fornaro
"will continue to be involved in the
integration of the two companies,"
according to a joint announcement by the
companies. Southwest said it would
transition the AirTran fleet to the
Southwest livery and consolidate corporate
functions into its Dallas headquarters.
Based on current operations, the combined
organization would have nearly 43,000
employees and serve more than 100
million customers annually from more than
100 different airports in the U.S. and near-
international destinations, according to the
announcement.
Fitch affirmed the debt ratings of
Southwest following the merger
announcement, noting that the rating
outlook for the company is stable. Fitch
said that the proposed merger "represents
a good strategic fit, opening up new and
attractive revenue and margin expansion
opportunities" for Southwest "without
driving a significant deterioration of credit
metrics."
Home 