What’s so unique about this merger is that AirTran truly is disappearing. This isn’t a “merger of equals” or anything else like we’ve seen in other big mergers. This is Southwest taking AirTran and turning its assets into Southwest. Because of that, the transition can occur much more easily. Effectively, this is how it will work.

Southwest has already started slowly canceling AirTran flights and re-creating them as Southwest flights. For example, today, AirTran operates three flights between LA and Atlanta while Southwest has none. Flash forward to a Tuesday in September and there are now three daily flights on Southwest as well as one single redeye on AirTran. So Southwest replaces the AirTran flights and has the ability to grow a little as well.

If you fly on an AirTran flight, you’ll get the AirTran onboard product. There will be business class, assigned seats, bag fees, etc. If you fly on a Southwest flight, you get the Southwest product with open seating, all coach, and no bag fees. Over time, all the AirTran flights will disappear and the Southwest flights will be the only ones to remain.

It seems so simple, and really, it is. Southwest has dramatically reduced the number of AirTran flights starting this summer (from 680 daily departures on a Friday all the way down to 568). This will allow the airline to start pulling out airplanes from the AirTran fleet to send them through the car wash where they’ll come out looking exactly like Southwest airplanes inside and out. At the same time, crews will begin coming over from AirTran to Southwest. They’ll get training and will be assimilated into the Southwest operation.

If you’re a cook, it’s like slowly adding an ingredient and mixing as you go instead of just dumping everything in at once. It just makes a lot of sense to do it that.

So why can Southwest do this so effortlessly and the others can’t? Because the other mergers are completely different animals. Whether it was America West/US Airways, Delta/Northwest, or Continental/United, these were all true mergers in the sense that they took bits and pieces from each other to create the new combined airline. Think about the harmonization of the frequent flier program as just one piece of the pie. There isn’t one airline that stays the same in these mergers, but there is in the Southwest/AirTran merger. AirTran is effectively disappearing and will leave barely a trace, and that allows Southwest to gradually phase it out without making any big changes to the surviving operation along the way.

I’m not exaggerating when I say tat AirTran is disappearing. According to Southwest spokesperson Chris Mainz, “we haven’t announced or decided on anything concrete that we plan to pull over from AirTran and incorporate into Southwest.” There will be some things behind the scenes that need to come over. For example, Southwest isn’t capable of flying internationally but AirTran can. That not a customer-facing issue, but it is something Southwest will need to incorporate behind the scenes to allow it to fly internationally. That’s why I imagine that toward the very the end, AirTran will just be a collection of international flights and redeyes, the two things that Southwest doesn’t do today. (Southwest has said that some limited redeyes are likely to come over.)

In the meantime, Southwest and AirTran continue to operate separately with Southwest getting bigger and AirTran getting smaller. There are efforts to connect the two systems with codesharing, but Southwest’s technology team is the hold-up. It can’t codeshare yet, despite years of trying. The plan is to have that up and running sometime in the near future, and that will make it easier to transition AirTran out slowly without completely killing the feed in the Atlanta hub.

Meanwhile, Southwest is doing what it can to relocate AirTran flights to be near Southwest in airports around the US so they can operate together, even as they continue to operate as two separate airlines.

[Original Southwest photo via Flickr user fdenardo1/Original AirTran photo via Flickr user PhillipC/Original Car Wash photo via Flickr user Ralph Hockens/All via CC 2.0]

When I wrote about the last route announcement which axed more small cities, I listed 8 AirTran cities which I thought should have been concerned about their future. Looks like I was about half right. Here’s a map with all the cities that won’t make the cut.

The Losers
The ones that will be going are Allentown (PA), Harrisburg (PA), Huntsville (AL), Lexington (KY), Sarasota (FL), and Westchester County (NY). The first four were on my list, and I had no doubt at all about Huntsville and Lexington. Allentown and Harrisburg were a mild surprise: I thought one would stick around, especially since Southwest has been getting its clock cleaned in Philly. I figured one of those cities might be a good add to the network, but I didn’t expect to see both. But it’s the last two cities that caught my eye.

Sarasota and Westchester were bigger surprises. Sarasota is a highly seasonal market, so maybe Southwest couldn’t find a way to properly serve it year-round, but I imagine it’s a good market in the winter. It is just 50 miles south of Tampa, so I suppose Southwest can leave it to airlines that are better capable of serving the market.

In Westchester, AirTran only has five flights a day there with two to Atlanta, one to Orlando, and one on the blue hair express down to West Palm Beach. Southwest wouldn’t be able to get more slots there, so it would be tough to run a Southwest-style operation. The model is further challenged by the fact that the airport handles all customer service, so Southwest couldn’t have its own people. (Southwest says that’s not why the airline backed out, but it had to be a factor.) Other airlines will be more than happy to snap up those slots in what is a strong market serving a very rich clientele.

The Winners
But what about the cities that are staying? That’s an interesting story. I said Branson (MO), Pensacola (FL), Portland (ME), and Rochester (NY) should be concerned, but they made the cut. I shouldn’t have been surprised by Branson since Southwest already announced AirTran would start Baltimore flights from there. I’m sure Southwest is getting a hefty subsidy, clearly showing this isn’t your father’s Southwest that only flew to markets that worked on their own. (The same goes for Wichita, which will be keeping service thanks to continuing what appears to be a perpetual subsidy.)

Pensacola surprised me because when it started Panama City service, Southwest agreed to pay a penalty if it started to serve Pensacola because of its proximity. Could the market be so good that it’s worth paying the penalty? Or maybe Southwest renegotiated that deal?

What else is staying? Well, there are the obvious ones. Akron-Canton (OH), Des Moines, Washington/National, and most of the international cities are sticking around. Southwest has already made it clear that these would be staying through various previous route announcements.

Then there are the mid-size cities that Southwest has previously avoided. Charlotte and Memphis are the most notable here. Southwest should serve these cities, though I don’t expect an enormous operation at either, at least not at this point.

That leaves us with Flint (MI), Dayton (OH), Richmond (VA), Key West (FL), and Grand Rapids (MI). These are a mixed bag. Dayton seems to be the closest Southwest wants to get to Cincinnati for now. Grand Rapids and Richmond are decent-sized places that might generate enough demand for a small operation. Flint and Key West are head-scratchers, however.

Flint isn’t very far from Detroit and it’s not exactly an economic powerhouse. Seems like a stretch to me. And Key West . . . if Sarasota can’t survive then I’m surprised Key West can. These just seem like markets that can barely sustain a minimum level of Southwest service, at best.

EVOLVE Seating
And that leads us back to the other big issue recently . . . Southwest and its seating. Last week, Southwest made a big deal about how it was putting new seating into its airplanes. It hailed the change as a “new era of customer comfort and sustainability.” There’s even a name for this change – EVOLVE – and yes, it’s written in all-caps. Give me a break.

I haven’t had the chance to try these seats, but they are thinner, and they use more environmentally-friendly material. They will, however, also recline less than the existing seats, and they’ll be moved closer together – enough to allow another row to be added to the airplanes. I have to reserve judgment on these since I haven’t sat in them to see if they truly are comfortable or not, but the way that Southwest is promoting this as the greatest thing since slice bread certainly is a turn off. And it’s the same strategy Southwest has used for most announcements. (Remember the new Rapid Rewards rollout? Bleh.)

More importantly, however, is that this shows the continued upgauging of Southwest. The 737-700s will now have 143 seats. The airline is focusing its future orders on 737-800s with a lot more seats than that. It has already said it doesn’t see much of a future for the 717. So how is Southwest going to really serve some of these smaller cities with only large-scale airplanes? It seems like there’s a disconnect here.

There’s no question Southwest can adequately serve some of the larger AirTran cities, and it will likely come up with a good model for serving the international destinations as well. But I think Southwest is going to have a tougher time serving some of these smaller cities unless it really decides to shake up the way it operates. I just haven’t seen any kind of indication from the airline that it’s going to do anything radical like that, so we’ll just have to see if some of these smaller cities can actually survive.

[Original EVOLVE seat photo via Southwest Airlines]

In the Trenches: Executing the Switch – Intuit Small Business Blog
We finally switched hosts, and it’s been great.

Peter Greenberg Worldwide Radio – Peter Greenberg
I was on Peter Greenberg’s radio show talking about mergers, frequent flier programs, etc. It starts at about the 1:29 mark and goes for 10 minutes. This was taped a few weeks ago and just aired over the last weekend. As you can tell at the end, I disagree with Peter a lot on fees.

Last Friday, AirTran (not Southwest) put out a press release announcing that it would pull out of five cities by next June. Four of those don’t have Southwest service so they will really be losing out on low fare service. I’m sure the timing of this announcement was not a coincidence – companies put out release on Friday with the hope that the news will be forgotten by Monday.

This strategy became quite clear when Sunday afternoon, Southwest announced it was adding a bunch of new routes to its network, including a lot of international. The talk was all around all the new things that are coming, but the new schedule also slipped in some bad news on some routes, with some big cuts. This wasn’t discussed at all, and while Southwest usually puts out a full PDF file with all changes, it opted not to do it this time. I’m not a fan of the new opaque strategy here.

The story you see picked up most is Southwest going international. I’ve seen headlines like “AirTran to add routes to Mexico, Puerto Rico” or “Southwest’s Airtran Adds New International Routes.” Great news indeed, but it’s too bad that people aren’t really looking at all the changes.

First let’s talk about the cities that AirTran will abandon. Three of those are small cities: Bloomington/Normal (IL), Charleston (WV), and Knoxville (TN). We’ve already seen four other cities lose out from this merger with Asheville (NC), Atlantic City (NJ), Newport News (VA), and Quad Cities/Moline (IL) going away in a previous announcement. I can’t imagine we’re done. I’d imagine that Allentown (PA), Branson (MO), Harrisburg (PA), Huntsville (AL), Lexington (KY), Pensacola (FL), Portland (ME), and Rochester (NY) are all very anxious right now. Hopefully some will stay in the network, but I would be surprised if all did. Southwest’s model just isn’t built to serve small cities the way AirTran’s was.

AirTran will also pull out of Miami and Washington/Dulles. In Miami, it’s a cost issue. That airport is absurdly expensive and has been involved in one debacle after another when it comes to building new infrastructure. AirTran had already cut back there on its own and Southwest is finally just pulling the plug, as it should. With Dulles, that’s a more curious announcement. Southwest will still fly there, but it hasn’t been able to grow the operation much at all over the years. You would think that Atlanta would be a likely connecting point in the new network, but I guess not. Neither of these are huge surprises, that’s for sure.

But all that was forgotten when on Sunday night, Southwest came out with the news about all its summer schedule changes. The big headline is the welcome news that Southwest is using AirTran to expand into Mexico and the Caribbean, as it has said it would all along. Here’s everything that coming into the network (some are seasonal changes). These are all AirTran except where noted.

• Baltimore – Branson (Saturday only), Los Angeles, New Orleans, San Francisco, and Seattle
• Chicago – Oklahoma City (on Southwest)
• Denver – Akron/Canton, Dayton, and New York/LaGuardia
• Ft Lauderdale – San Juan
• Houston – Kansas City, Raleigh/Durham, and Seattle (on Southwest)
• Las Vegas – Norfolk (on Southwest)
• Nashville – Seattle (on Southwest)
• Orange County – Cabo San Lucas and Mexico City
• San Antonio – Cancun and Mexico City
• San Diego – St Louis (on Southwest)

First things first. A hearty congrats to the mighty CAK (Akron/Canton) for not only holding on to AirTran service but seeing new, growing flights from the airport. I’ve always been a big fan of that airport, and this is yet another win. It means even more with other smaller cities losing service entirely in the merger.

Also, the Mexico stuff make a lot of sense in general. It’s about time that Southwest started tapping into that. And with Orange County just opening its customs/immigration facility this month, Southwest can finally serve Cabo from there, a market which should do very well. Not so sure about Mexico City from Orange County, however. I see Orange County as a great place for the rich and plastic to fly down to Mexican beach resorts. It’s not, however a big ethnic market and that’s more of what Mexico City needs. I’ll be interested to see how that goes, and I’ll be interested to see how Volaris, Southwest’s partner, feels about these moves.

Now Southwest would like you to think that this is it. No other big changes are happening in the network, but that’s not the case. Along with a roller coaster of frequency increases and decreases in a variety of markets (as usual), there are some routes going away. Some might be seasonal, but I bet not all.

Wondering where those slots are coming from to operate the new Denver – LaGuardia flights? Well, LaGuardia is losing AirTran’s Orlando flights. JetBlue will be happy to hear that one, and it will also be happy to see that Boston to Florida flights on AirTran are gone as well (Ft Myers and Orlando).

We’ll see the relatively recent upstart market of Milwaukee to New Orleans go away in the AirTran network. Southwest is cutting Albuquerque to Salt Lake as well as Midway to Islip. Islip continues to shrink as Southwest gets more traction at New York City airports.

So, while there is some positive news here that shows the direction of this merged airline, there is going to be some pain as well. In particular, the small cities left in the AirTran network should be really feeling nervous about the whole thing.

[Original photo via Flickr user dougtone/CC-SA 2.0]

Beginning on February 12, Southwest will launch flights on top of the AirTran flights that already exist in four markets while adding one new one. Here’s how it’s going to look.

This all seems funny, right? I mean, Southwest will bring its own airplanes into Atlanta just as it would in almost any new city. The pattern of connecting a new spoke to its largest operations has been done time and time again. The only difference is that Southwest now owns AirTran, an enormous airline in Atlanta, yet it’s just going to sit on top of AirTran and run a parallel operation. Why would it do that?

Let’s think about how Southwest is approaching this. In Delta/Northwest and United/Continental, those airlines have both pitched this as a sort of “merger of equals” type of thing. Two great airlines come together to make one. Blah blah blah. I’m going to turn into Julia Child for a minute and look at this in cooking terms, because for some reason that’s the analogy that came to mind. Then again, I know nothing about cooking. Let’s go with the Swedish Chef.

Say that United is made with recipe U and Continental is made with recipe C. Both are recipes for airlines, but the ultimate goal is to improve them together to create a better, single airline with recipe UA. To get there, you put pieces of recipe C into recipe U and pieces of recipe U into recipe C to bring them closer to each other. But you also improve on both by adding extra ingredients until they’re both that same new recipe UA. It’s a relatively slow process, but it’s been time-tested.

With Southwest/AirTran, it’s different. Southwest is the dominant carrier, and it’s trying to get AirTran to conform to the Southwest standard, ultimately possibly taking bits and pieces from AirTran, but only around the edges.

To do this, Southwest sticks with recipe S for its product, and it tries to take AirTran’s recipe A and turn it into recipe S without much disruption at all. How does it do that? It starts with a big batch of recipe S and slowly stirs recipe A into it so that it dissolves. That’s what I think is happening here.

Southwest is bringing recipe S into Atlanta with this new service starting in February. This is the core Southwest-style operation that will form the basis of the combined airline. Slowly, we’ll see new routes brought under the Southwest name while routes slowly disappear from the AirTran brand. I imagine eventually we’ll see AirTran stop serving these (and all other) cities and the service will be consolidated under Southwest. Slowly AirTran cities will be brought into the Southwest family or they’ll disappear (as has already happened to Asheville, Atlantic City, Moline, and Newport News). Over time, Atlanta will be all Southwest, but the transition won’t happen overnight.

I bet we don’t see Southwest simply paint over the ticket counters one night in Atlanta. Instead, we’ll see Southwest get a larger and larger presence as AirTran gets smaller and smaller. Eventually, AirTran will just disappear once the entire fleet has been brought under the Southwest brand.

To be honest, I think that’s a smart way to handle this kind of merger. There’s no reason to just throw it together at once and call it the same name. Do it slow, and do it right. With that in mind, there are some things that need to be done quickly, and Southwest is addressing them.

As part of this announcement, Southwest also said that it would offer reciprocal elite status in the two frequent flier programs. So if you’re elite with AirTran, then you’ll get A-List status with Southwest and vice versa. CEO Gary Kelly also said today that codesharing between the two airlines would begin in the first half of next year. So you allow people to freely use either brand and get the same benefits while the AirTran brand still exists.

I like it. Now, whether or not Atlanta will work in the Southwest system is a whole different question. I actually have a guest post coming up on that topic soon.

When Southwest purchased AirTran, it had to make two quick moves. The first was the pull out of DFW. We already talked about that here. The second was to end AirTran’s regional partnership with SkyWest. SkyWest had been flying to smaller cities out of Milwaukee, but that couldn’t continue under Southwest’s deal with its unions. (And Southwest probably wouldn’t have wanted to continue it anyway.) So it disappears on September 6, but unlike the DFW decision, this one opened up more questions. Would Southwest try to continue serving some of those cities served by SkyWest or would it walk away? Now we know. Here’s what will happen on September 6. All of these are to/from Milwaukee:

So why do I say this is exciting? Because there’s a lot we can take away from this.

First, it’s important to know that SkyWest was flying these flights at its own risk. It shared revenue with AirTran, but AirTran didn’t have to reimburse SkyWest for costs. SkyWest had planes sitting on the ground and thought this would be a good use for those airplanes. Why is it, then, that Southwest/AirTran ends up canceling those markets with more flight frequencies? Wouldn’t you expect those to do better? Not exactly.

The difference is that Indianapolis, Omaha, and Pittsburgh are already in the Southwest system. You can fly Southwest from those cities and connect to just about any other city in the Southwest network. In other words, SkyWest was bringing people into Milwaukee and connecting into a hub operation on AirTran. Southwest no longer needs that because it already has ways to flow those people into the Southwest system.

Akron/Canton and Des Moines, however, do not have Southwest service yet. In fact, these had been two hotly-debated cities. How (if?) would Southwest continue to serve them after the merger? That fact that Southwest has decided to upgauge these flights to be on 717s is good news for them. And it shows that Southwest really does want to use those 717s to open up mid-size markets that it doesn’t serve today.

I actually wouldn’t expect these cities to necessarily keep service to Milwaukee in the long run. Today, the only other AirTran flight in Des Moines is a weekend service to Orlando. Without Milwaukee, Des Moines is an island. Akron/Canton is different with a lot of service up and down the east coast. But Milwaukee is the only real gateway to the west (unless you head south to Atlanta first).

Once the Southwest and AirTran systems merge, you might see that shift to Chicago/Midway because Southwest can flow more people into the system that way. That’s a powerful thing and it should allow the airline to serve some of these smaller cities in a way that AirTran couldn’t alone. This makes it clear to me that Southwest wants to stay in those markets. That’s what’s exciting.

St Louis seems like a different story to me. Southwest has slowly been ramping up in St Louis since American pulled down. This is just another route that Southwest probably thinks can work now so it has put some airplanes in there. It will also start flying Milwaukee to Denver once a day to complement AirTran’s single daily service. So we might be seeing the beginnings of an aircraft routing optimization project.

In the end, this is great news for Southwest loyalists who want to be able to fly to smaller cities. It’s also great news for the small to medium-sized cities that have been trying to attract Southwest for years.

[Original photos via Flickr user wbaiv, Flickr user cliff1066™, and Wikimedia Commons/CC 2.0]

Frequent flier’s tips for dealing with jet lag – CNN Out of the Office
I had some challenging travel this week from a body clock perspective, so I shared some of my tips for helping with jetlag. Nothing works really well for me, but this isn’t bad.

In the Trenches: How to Stop Working So Much – Intuit Small Business Blog
It’s hard enough working at home, but if you aren’t careful, you’ll never stop working.

Frequent Flier Facts – Woman Road Warrior
I sat down to discuss my thoughts on elite programs and whether they’re worth it. This was a piece more for those who don’t know a lot about the world of elite status.

Federal Air-Service Grant Program Sees Some Worthy Applicants in 2010 – BNET Headwinds
It’s SCASD week over on BNET and here I look at some of the best proposals from this year’s crop of small city grant applications.

The Worst Small Community Air Service Grant Applications For 2010 – BNET Headwinds
And now it’s time to look at some of the worst proposals.

Horizon Looks to Create Small Community Air Hub in San Jose – BNET Headwinds
One of the more interesting SCASD trends this year was Horizon’s support of a number of cities looking for flights to San Jose.

Great Falls Aims to Prove Airline Pricing Analysts Wrong – BNET Headwinds
Great Falls took the SCASD opportunity to propose offering rebates to customers to bring fares down.

How the Southwest-AirTran Merger Creates a Labor Problem – BNET Headwinds
The Southwest-AirTran merger presents an interesting problem. What can Southwest offer to labor to make this merger interesting?

Delta’s ScottEVest Ad Rejection Turns into PR Blunder – BNET Headwinds
It’s just a vest, but the company owner is turning it into a David versus Goliath story. It doesn’t seem correct to me, but he’s winning the PR battle.

Antitrust Immunity Enables New British Airways, American Airlines, and Iberia Flights – BNET Headwinds
The joint venture between American, British Airways, and Iberia is now in effect, and the airlines are celebrating by launching new routes.

Antitrust Immunity Deals: How U.S. Airlines Avoid Foreign Ownership Restrictions – BNET Headwinds
My editor at BNET asked me why all these antitrust deals were happening in this industry. The answer? Foreign ownership rules.