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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