by David Beasley | September 27, 2010
The Southwest Air Lines acquisition of AirTran Airways will be good news for Atlanta travelers and Hartsfield-Jackson Atlanta International Airport, a Georgia State University airline expert said.
The larger merged airline will create more competition for Delta Air Lines Inc. in its home city, likely lowering ticket prices for Atlanta travelers, said Jonathan Godbey, professor of finance at Georgia State's Robinson College of Business.
"That is what makes America great, two fantastic airlines competing head to head," said Dr. Godbey. "This is going to keep prices down. I think it will be great news for Atlanta."
Southwest, based in Dallas, does not currently fly out of Atlanta while Orlando-based Airtran has its largest hub here, flying to cities in the U.S. as well as the Dominican Republic, Aruba, the Bahamas, Jamaica and Mexico.
The merged airline will likely increase the number of flights in Atlanta as Southwest expands, said Dr. Godbey. More flights will help Hartsfield-Jackson International Airport, he added.
"Combining our airlines will invigorate competition at Hartsfield-Jackson Atlanta International Airport," Southwest said on its website, adding that Atlanta passengers could save $200 million annually through lower fares.
AirTran and Southwest both currently serve 69 cities, according to a news release. But Southwest has five times the number of passengers and four times as many employees as AirTran.
The combined airline will serve 100 destinations, adding four new airports in 2011, Southwest said. It will keep a "vast majority, if not all," of AirTran's current markets. One AirTran destination that will be dropped is Dallas-Fort Worth International Airport, the company said. Southwest flies out of Dallas Love Field.
Southwest is offering $7.25 a share for AirTran, which is 69-percent higher than the stock's Friday closing price. The deal, which is still subject to approval by the U.S. Justice Department, and Airtran shareholders is valued at $1.37 billion.
For AirTran passengers, one major difference will likely be the end of assigned seating. Southwest does not assign seating and the merged company likely will follow that procedure, Southwest said on its website.