Southwest Buys AirTran: Here’s What We Know So Far

I like to try and ease into the work week, but Southwest rudely prevented that from happening by announcing the airline would acquire AirTran bright and early yesterday morning. But that’s ok. I forgive them. This is a really interesting move for the airline, so it’s worth shifting into overdrive here. I put a post up yesterday on BNET about what’s good about this (I have another going live today on what’s bad), but here I want to talk what it means for you, the customer. Unlike the United/Continental so-called “merger of equals,” this one is all Southwest. Also unlike that merger, we actually know a fair bit about how the post-merger Southwest will look, surprisingly. So, here’s what we know.

Southwest on AirTran

Southwest Rules, AirTran Drools
Make no mistake here. Southwest is the acquiring airline and AirTran’s name and brand will disappear completely. Headquarters will be at the Southwest campus in Dallas. I can’t say I’m sad to hear that. AirTran’s legroom on the 717s are so awful that I try to avoid them despite the fact that I love my Douglas jets. I’ve also found some of AirTran’s customer service policies to be more along the lines of customer disservice and I look forward to those dying as well.

You can use that basic plan as your general guide on what stays and what goes in the combined airline, but that doesn’t mean everything AirTran does is bad and will go. No, Southwest will find what it likes and keep it. I’m just not sure what that might be.

No Fees, No Change
Though Southwest will always want to hedge its bets by saying that things could change in the future, we can expect the bulk of the Southwest product to remain. In fact, CEO Gary Kelly gave some examples:

  • No change fees (AirTran charges $75 today)
  • No bag fees (AirTran currently charges $20 for the first and $25 for the second)
  • All coach class (AirTran currently has a business class cabin)
  • Open seating (AirTran lets you pay extra for a seat assignment today)

Southwest Will Fly Douglas Jets
For the first time (if you exclude the Muse Air acquisition years ago), Southwest will operate some good ole’ Douglas jets. Ok, so they’re actually Boeing 717s, a design Boeing continued when it bought McDonnell Douglas back in the 1990s, and AirTran has 86 of them. Southwest has confirmed that it will keep the planes. Today, they’re configured with 12 business class seats and 105 knee-crunching coach seats. Southwest expects to still have 117 seats onboard but without business class. That means your knees will also be free to roam about the country along with the rest of you.

This will complement Southwest’s fleet of 25 737-500s which today seat 122 people. The capacity on those is close enough that Southwest will be able to schedule them similarly, I would assume. You can also expect to see Southwest’s massive fleet of 737s seating 137 people grow by about 50 planes when AirTran’s 737s get painted. But there will also be this new opportunity of a 100+ strong fleet of airplanes with 20 fewer seats. That can be used to serve smaller markets.

No Route Decisions Except That DFW is Toast
As you would expect, it’s way too early for the airline to be announcing route decisions but there is one that has already been made. When the merger is complete, Southwest will not serve DFW because under its Wright Amendment settlement, it says it won’t serve the airport. Today, AirTran serves Atlanta six times daily, Milwaukee twice daily, and Orlando once a day. Those will disappear, but they could come back from Dallas/Love in 2014 when the Wright Amendment is lifted.

Some have talked about how Southwest is a point-to-point airline while AirTran is a hub-and-spoke airline, but I disagree. Look at some of Southwest’s bigger cities and they look a lot like a hub to me. In fact, CEO Gary Kelly said “We don’t see Atlanta developing for us any different than the way we operate Chicago Midway.”

Where I do expect to see change is on the small city side. Yes, the 717s will help serve smaller cities that Southwest can’t serve today, but a lot of AirTran’s business is short term incentive deals that I’m not a fan of. Southwest clearly isn’t against airport incentives, as it showed when it went into the Florida panhandle, but I can’t imagine it’s going to be as interested in most of the incentive opportunities since very few of these turn into sustainable opportunities. While AirTran is happy going in and out of markets on a whim, Southwest wants to build sustainability.

We also know that we’ll see Southwest’s airplanes finally land at places like Washington/National, Charlotte, Memphis, Des Moines, and Wichita, places that have been rumored for years. And there will be the ability go international now as well. Lots of opportunities are opened up with this deal, but I expect lots of doors will be closed on the smallest cities in the network.

But beyond city selection, there will be big schedule changes as well. I think this chart sums things up nicely:

Southwest/AirTran Average Daily Departures per Airport

Southwest is all about frequent flights whereas AirTran just throws flights out there one or two at a time (or less than daily on some routes). The traditional Southwest market is a lot different than the traditional AirTran market (if there is such a thing), so Southwest is going to have to figure out how it wants to serve the Molines and Allentowns of the world, if in fact it does at all.

And that’s really what we know so far. Lots of speculation out there on what could and couldn’t happen, but it will all unfold in the months to come. They expect to close on this next year, and I don’t imagine there will be any pushback from the feds. They love Southwest, so this should get the seal of approval.

Now let’s see what you think. I’m particularly interested in what Atlantans have to say about this. Will it make you more or less likely to fly Southwest/AirTran?

[Original photo via Flickr user Mark on AirTran Team]

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72 Comments on "Southwest Buys AirTran: Here’s What We Know So Far"

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Ken
Guest

I’m not a Southerner (although I do now live in the South), but shouldn’t the Southern phrase “Y’all” have the apostrophe after the “y” and not after the “a”? (If you can even correctly punctuate slang, that is.) Is the sticker on the above picture incorrect then?

Xnuiem
Member

Yes. And as a Native Texan, and from DFW, it aint slang, its a word. Just like fixin’ and gonna.

Since you are new, I won’t turn you in. But repeat after me: “Y’all gonna get to fixin’ my boat or aint ya?”

Andrew
Guest

Many in the south do spell it “Ya’ll”, arguing that it’s not actually a contraction for “you all” like most people think, but rather it’s own word. It’s a minority spelling, but still acceptable.

MartyNearDFW
Guest

Agreed. I’ve seen both, but my iPhone automatically spellchecks it to “y’all”. I thought that was cool that my iPhone can type with a twang.

=M=

Ken
Guest

Or is that just some fancy Cranky Flier photoshop editing again?

tharanga
Guest

Yes, southwest has hubs. Anybody who says “they’re not hubs, they’re focus cities” will find get an electronic punch in the face from me.

Tim
Guest

Southwest’s “focus cities” may be “hubs”, but don’t tell their pilots that, you might be the one getting the bent nose! Coming back to DEN one day, the 737 driver came on the PA and told us to keep seated as we had to stop and wait, “because our competitor’s “choke & spoke” system has traffic blocking our access to the gate”.

DGS
Guest
Hey Cranky, you’ve found your native Atlantan! Things I will miss… 1a. Business Class 1b. Transcons to the West Coast I travel to the west coast (LAX, SFO, SEA, and SAN) several times per year. I usually took AirTran knowing that I could usually score a cheap Biz Class upgrade at check-in. I’m 6’4″, so the leg room was really the only thing that mattered to me. Losing that stinks, with SWA’s general dislike of transcons today, I assume they’ll flow that traffic over DEN or PHX. I’ll either move to Delta’s widebody flights to the west or look at… Read more »
JM
Guest
I’m an Atlanta resident, but will stick to Delta and my backup, US Airways. Look, I was an early devotee of AirTran, but it is just another airline now. Legroom is lousy in coach (and the seats are uncomfortably thin), the planes are sometimes dirty, as are the gates– although the people still tend to be great, as they were in the DC-9 and 732 days. What has kept me off AirTran for the past few years, though? Simple. AirTran has no airline lounges (like the Crown Room Clubs/Skyclubs) and a lousy frequent flyer program. Those things matter to me… Read more »
greg
Guest

I’m glad I’ll no longer have to drive ove to BHM just to fly Delta back to ATL…that part is OK. What’s bad is the return trip landing in ATL, flying to BHM, and driving back home!

Nick Barnard
Member

Lol.. I’ve had a friend who did the same thing with DAY and CVG, even though he lived in CVG.

PeteyNice
Guest
I don’t see how this is good for Atlanta. At best we are swapping one LCC for another. AirTran made ATL a big hub, who knows what Southwest will do about capacity, especially if Delta decides to be aggressive. I think it will also hurt the other legacy carriers in ATL. They already fly RJs on most routes so I could see those being scaled back even more – AA to DFW as an exception of course. If Southwest has good non-stop frequency to the places I go (Northeast, West Coast) and the prices are fair I would fly them… Read more »
Rob Garren
Guest
I think Southwest might have to abandon (at least temporarily) Pensacola. I think it violates some agreements with the St. Joe company and Southwest serving Panama City Beach. For those of you that liked AirTran and worry that you will now have fewer choices and higher prices well…you might be partially right. Some smaller cities may go away but due to the larger route system feeding the smaller markets they will probably actually get more service. Also, having that larger route system means that you will probably get better fares to more destinations. You’ll also see the prices on the… Read more »
CL
Guest

As a student and an Atlanta resident I can say the one thing I will miss is the AirTran U program. I have only used it a few times, however it is great for when you last minute decide to go somewhere. About 90% of the time I fly out of Atlanta it is on Delta (even if AirTran is slightly cheeper) but you can’t beat ~$69 each way when you decide that day you want to go somewhere. With Southwest coming in I will probably only be flying Delta.

IHSW
Guest
Well, that’s handy. Now there’s just one airline for me to avoid instead of two. There was nothing intrinsically wrong with AirTran for the most part, although there was nothing all that *right* about them either. This move certainly will make life more difficult for JetBlue and Frontier (Especially in Milwaukee for Frontier). At the same time, it’s nice to see Southwest taking baby steps toward becoming a real airline. Maybe in another few years they’ll offer advanced seating and multi-class service, and ditch the saccarine, pandering false folksy-ness. One question about adding the 717s to their fleet: I thought… Read more »
AB
Guest

“the saccarine, pandering false folksy-ness”

I laughed out loud at this. Perfect description! HA! :)

David SF eastbay
Member
Like said WN like lots of flights between cities and AirTran one or two. If WN keeps their service plan then you can see lots of AirTran cities either going away or the service switching to just flying to large WN ‘transit’ cities and that’s it. WN could have flown to places like Wichita decades ago, so they may not want to now, so no city is safe. Those 717’s will start to fade away one day also I bet, as their range will not give WN the kind of flexiblity they want. They will keep the parts (cities/routes) that… Read more »
S
Guest

I’m disappointed (not surprised) they’re keeping open seating. I hate open seating. Why is that considered an asset by some people? Hate it.

IHSW
Guest

I’m with you on this. The SW cattle call to get on the plane is the single most unpleasant and unnecessary bit of indefensible stupidity by an airline that even I would admit does a lot of truly innovative things very well. Why you’d want to undermine that by making your passengers feel like naughty 7 year olds waiting for a school bus is baffling to me.

Tim
Guest
I admit that I once was a non-believer in WN’s boarding system, but trust me, after experiencing that 95% of the time you can still get an aisle seat even if you’re position is in the C group, I started to warm-up to it. Lots’s of WN’s customers are 2 or 3 non-business travelers flying together and they tend to take more window and middle seats than aisles. I also have experienced the snail speed that many traditional assigned seating systems frequently operate at. WN’s boarding is typically very fast. A major reason: their customers don’t pay for bags!! That… Read more »
S
Guest

As someone who only wants a window seat, that’s not great news that they can be the first to go.

How does WN save money by having open seating? Seat assignments don’t seem to be a cost factor. IHSW, I agree with everything you wrote.

Bill from DC
Guest

saves money based on the WN turn and burn method which relies on keeping the planes in the air, not on the ground. studies have shown their group seating method boards the same amount of pxs much more quickly. it’s not about system costs or keeping a WN signature, it’s about minimizing turn time.

Nick Barnard
Member
America West of all airlines commissioned a study to investigate different boarding models, and found that the cattle call was the most efficient. The reason: Passengers self resolve “conflicts” (e.g. being unable to get to a specific seat because of another passenger blocking them in some way.) by choosing another seat. The second most efficient model, which America West implemented on both their airline and then US Airways, was an “inverse U”, meaning the first people called were those with window seats in the back, next was those with middle seats in the back, and window seats in them middle,… Read more »
Nick Barnard
Member
Nick Barnard
Member

actually I think this is probably a better link: http://www.wired.com/science/discoveries/news/2006/05/70689

Sanjeev M
Guest

It’s good that Gary Kelly has come out with lots of details upfront. BWI will become slightly more expensive (maybe $10 bump in prices – esp BOS) cause it’ll be all Southwest now. I think the whole D concourse could be closed after this.

Does buying Airtran make codesharing easier and faster for SWA? I know Airtran has done something with Frontier in the past and now Skywest, so maybe this will speed up the Volaris codeshare (and possibly bring back the WestJet one?)

Thoughts on this?

Bill Hough
Guest

As someone who truly despises checked bag fees, this is one airline merger that I can support wholeheartedly. Southwest announced that they will continue with “2 bags fly free” so I can visit ATL now and avoid DL’s nickel and diming.

Eric
Guest

I don’t know this for sure…but my gut tells me the DOJ is going to take a REALLY close look at this. I am not making predictions to the outcome, but I can see consumer groups raising concerns about BWI…and handing over the entire state of Florida to one airline.

daren_siddall
Member

Having read your analysis CF plus comments from others, it looks like it would be highly unlikely that the ATL-SAV route will be resurrected. Shame because Delta’s monopoly on this route is pushing up fares. WN would be a welcome entrant to that market as far as I am concerned.

Brad
Guest

I was just checking websites and seems Delta generally meets or beats Southwests fares without all the change in cities and small aircraft. I live in Atlanta and generally fly Delta, Airtran has always offered a good product and alternative to Delta. I don’t get the Southwest Hype and don’t feel they are a good replacement for Airtran. We will see, but I don’t see Southwest having more than a limited impact at ATL.

Bruce
Guest
WN has become the largest domestic airline … and the most consistently profitable … with its business model of one aircraft type, among other things. I wonder if the sudden addition of 80 717s, a completely different aircraft type and a major switch from that model, bodes ill for the future. JetBlue added RJs to its otherwise all-A320 jet family and soon joined the ranks of carriers shuttling between profit and loss. Other elements of the successful business model are unassigned seats and single-class service, points which IHSW seems to ignore in his/her tirades. In fact, WN has gained added… Read more »
Brad
Guest

Having flow WN, I understand the seating policy and its reasons. It gets the passengers to move and settle in instead of taking their sweet time boarding and milling about the cabin. Hard to turn and aircraft in 30 minutes when everyone moves at a snails pace and can’t sit down. That is the only thing good about open seating. It does help turn aircraft, but it is miserable.

sforsyth
Member
This is a mind blower: Now watch for a large follow-on order from SW for 737-800’s. I would not be a bit surprised if they ordered as many as 100 stretched over 5 or 6 years…starting with 25 firm and 75 options, and maybe even a few short term leased 737-800’s to kick it off until deliveries catch up…and that’s on top of more 737-700’s already in the pipeline from both SW and AirTran. That gets and keeps all the pilots on-board, ups the loads at gate restriced/slot restricted airports like LGA, SNA, EWR and DCA, gives them larger planes… Read more »
David SF eastbay
Member

Gee I wonder why the CEO at JetBlue came out today saying they have no plans to get involved in airline merger activity. Maybe he doesn’t want the stock value to go down before someone buys them.

Nick Barnard
Member

Probably more about preserving their product than anything else.

MrSkyGuy
Guest

Sign me up! Perhaps ATL will see EWR service, allowing me to connect from LAX through ATL.

Jason Steele
Guest
It is amazing how many Atl based travelers are chiming in here. Atlanta keeps a relatively low profile compared to places like NY, LA and Chicago. Analysts write it off as the Delta fortress, yet I have always thought that they have a lot more O & D than most cities it’s size. When I lived there, I knew all sorts of consultants and such who flew out every week or sometimes multiple times a week. The city attracts that type. Even today, I know plenty of leisure travelers there who make Gold and even Platinum medallion, Atlanta being such… Read more »
travelnate
Guest
I actually have enjoyed the Air Tran product (I’m Elite). The upgrade system works, using my points has never been an all-night project (like using my SkyPesos), and I’ve always found friendly staff on AirTran. This is a much different culture than WN, but that isn’t a bad thing. The staff @ AirTran are really proud of their airline and seem to get along “better” with management than at other carriers. AirTran has always been willing to experiment (they had 3 types of bottled water on their flights @ one time). Fares on FL have always been OK, but Air… Read more »
Rob Garren
Guest
I think all the 717’s are leased. That means that when the lease comes due, Southwest can just not re-new. AirTran has something like 53 -700’s on order. Southwest has a ton on order too and has expressed that they can convert these orders over to -800’s. That means that they can keep the -700 orders and ADD the -800 orders to speed the retirement of those 717’s. So…the 717’s are temporary and will quickly be replaced. Maybe Allegiant will be interested. The old rumor was that Southwest wanted to buy Sun Country. I wonder if after the seniority of… Read more »
Wonko Beeblebrox
Guest

I’m surprised that WN doesn’t want to add in one extra row into those 717s once they remove first class. If they did, then they’d simplify their (current) fleet scheduling to be only either 122 seats or 137 seats…

Nick Barnard
Member

Its not that simple. The pilots and the flight attendants aren’t interchangeable between a 717 and a 737 unless they’re cross trained. It’d make sense in a smaller airline for this, but it makes no sense to train all of the SWA crew for a small subfleet. There are likely some different ground support requirements as well. If they’re going to have to schedule them separately, they might as well just keep them separate..

Wonko Beeblebrox
Guest

I completely agree.

But it still makes sense to me to simplify where-ever it is “low hanging fruit”. Having only 122 or 137 seat offerings seems to meet that idea than adding in a third capacity offering as well.

Bruce
Guest

Don’t forget there are FAA requirements as to the ratio of F/As and emergency exits per psgr. Adding just five seats on a 717 mite exceed that ratio. If it’s exits, there’s no way around it. If it’s an additional F/A, WN has a choice but really it’s a no brainer re: additional costs. Don’t add an F/A for five more psgrs.

Rob Garren
Guest

The FAA requires one flight attendant for every 50 passengers…so with over 100 and up to 150 seats you need 3 flight attendants. I think the issue with the 717 only seating 117 has more to do with leg room. You just don’t have enough by Southwest standards to fit more on a 717.

consumer mike
Guest

My opinion is : GOOD that SW may “DE-FOCUS” Atlanta and get a work around plan for the hub from hell.

What could be BAD is that SW may change it’s fares (make that increase) to recover liquidity as soon as possible. It’s hard for me to believe that SW will not make serious changes after digesting AIR TRAN.

I personally rarely fly SW as I hate the “Cattle Call” system of seating. Guess you get what you pay for.

Fred
Guest
Do you think it would be at all possible that Southwest partially dismantles Atlanta as a hub and just keep it as a focus city? Atl isn’t a great location for a pure domestic hub-like operation (DL has plenty of international traffic) and they really don’t need a huge operation to attract passengers. The slots at LGA, BOS, DCA, extra aircraft and simply less competition would seem more significant benefits from AirTran than a full-blown hub at Atl. On a side note, one reason I will never truly like Southwest is because they don’t fly red-eye flights. If you hate… Read more »
Rob Garren
Guest
If you look at Gary Kelly’s quotes they basically say, “Atlanta, Atlanta, international, Atlanta.” He talks a lot about Atlanta. AirTran has 32 Gates at ATL. On top of that AirTran already has 200 flights every day out of ATL yet Southwest will add something like 37 new cities to that existing route network. So, I’m guessing that at least 300 daily departures for the combined carrier out of ATL. If you look at the crew bases that Southwest already has I think usually 200 flights per day is when a city is considered for a crew base. You actually… Read more »
Rob Garren
Guest

Also…ATL is a good location for avoiding lots of weather problems associated with many other airports. You don’t have to worry as much about having your aircraft stuck due to snowstorms, hurricanes, flooding, etc. It has a nice central location, mild climate, far enough inland.

consumer mike
Guest
Rob, I cannot disagree with you more regarding your misleading picture of Atlanta avoiding bad weather. It is precisely because of many bad experiences being stuck, delayed, and missing many connections in ATL that I call it the HUB FROM HELL. There are the summer storms which back up air traffic and when a storm cell opens up the traffic jam on the ground, same for the winter storms. AND, don’t remind me about the occasional hurricane impact. Either you don’t fly through ATL very often or you are related to someone in the chamber of commerce or works for… Read more »
Bill from DC
Guest

now that’s not entirely fair. as a former platinum medallion in ATL, i can say that ATL operates very efficiently during the fall and winter, especially compared to the hubs in the north.

ATL performance suffers mostly in the summer with the dreaded (and frequent) summer thunderstorm patterns. the key to using ATL in the summer is to fly early in the day! t-storms tend to be a mid to late afternoon phenomenon.

Rob Garren
Guest

I’m not saying that things don’t get backed up when there is a thunderstorm (just like at any airport). What I mean is that there are rarely situations where the entire airport is closed for a day or more due to being snowed in or in the direct path of a hurricane. For an airline, having aircraft stuck on the ground for a day or more is a bigger deal than a delay.

Dan
Guest

Rob,

I’m not sure where you came across that idea, but you don’t need to have a “major hub” to have a crew base. Most majors have more crew bases than they do hubs…

Rob Garren
Guest
What you need for a crew base is a large number of originators which usually also implies lots of air traffic later in the day as well. After this you take into account the costs of putting crews up in hotels and the cost of airport facilities. It doesn’t make a lot of sense to originate crew members in a city where you don’t have a lot of originators or air traffic. If so, I’d call that a hub. I’d like to see some examples of crew bases at airports where those airlines don’t have a significant percentage of their… Read more »
consumer mike
Guest

Bill from DC;

During the winter months I admit ATL can have better access then the NE. But we are talking about ATL as a destination or connection. Unless you take a red eye from the west there is NO OPTION flying to or connecting early. That’s just the way it is.

Bill from DC
Guest

i’m not sure that is accurate? i know most DL spokes have a 5:30 or 6 am departure to ATL so pxs can connect to the first bank of ATL departures which, i believe, runs from 7-9 am.

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[…] and on BNET has done a great job looking at this merger from a number of different angels: – First look at the merger – Frontier and other airlines will benefit from this merger – 6 Reasons why this merger is a good […]

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[…] and on BNET has done a great job looking at this merger from a number of different angels: – First look at the merger – Frontier and other airlines will benefit from this merger – 6 Reasons why this merger is a good […]

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[…] and on BNET has done a great job looking at this merger from a number of different angels: – First look at the merger – Frontier and other airlines will benefit from this merger – 6 Reasons why this merger is a good […]

Shane
Guest

A late comment, but in addition to the Altanta, DCA and international opportunities with the purchase, could this also be a partial defensive move? A profitable company with a huge pile of cash had to be on the radar of hedge funds and other large private equity groups.

jp
Guest

please stop calling southwest buying airtran deal a “merger.” it is not a merger. it’s an acquistion!

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[…] when Southwest announced it was taking over AirTran and people immediately thought Delta was in trouble in Atlanta? Hah. Yeah, right. I’d say the […]

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