Southwest’s acquisition of AirTran made a little news yesterday when it was announced that Southwest would bring its own airplanes to Atlanta starting on February 12. That’s just in time for the LUV-iest day of the year, Valentine’s Day. We’ve all gotten used to watching mergers unfold over the last couple of years, but this one is really being handled differently. If I’m reading this right, then I like the game plan here. Let’s see if you agree.
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.
Interesting gameplan. Will be fun to see how it all plays out. Any word on when the rest of their frequent flier programs will merge? I’ve got handful of A+ rewards that I’d REALLY like to combine with my old Southwest credits so that I can get a free flight before everything expires.
Nope, I haven’t heard any details on that.
I don’t quite get how you can slowly/gradually convert a hub operation from A to S, when most passengers are connecting at the hub. I guess it’s possible with the code share, but won’t it be a little jarring for customers switching from one to the other for the connection? A hub seems like it needs an all-at-once conversion at some point. These SWA flights just seem to feed their existing hubs.
It a lot less jarring to switch from S to A on a codeshare than it is flying “Southwest” with a completely different set of product offerings onboard.
Oh, I agree. I was assuming they’d make everything on A match S, then do one giant name switch all at once.
Are they at least going to run the Southwest flights at different times as the Air Tran so people have say 8 flights spread out of the day on the S/A system to compete better against DL?
According to Dan Webb, they’ve already starting cutting back frequencies on the AirTran side. So it is a work in progress.
Given the disparate configuration of a FL plane and a SW plane I think this strategy makes good sense. At least with UA/CO and DL/NW the class configurations and boarding routines were not so polar opposite. Think of this more like weening FL fliers off their routine and config and onto the SW model. So in that case the Swedish Chef analogy is spot on I think.
Kind of like tempering eggs (when cooking), right?
sounds to me more like, Just For Men (http://www.justformen.com/home.asp), slowly making grey hairs less obvious until they are all gone.
I love the graphic Brett. They essentially confirmed the speculation that the FL integration will be done in baby steps…not some grand “Day One” marketing hogwash. It is going to take a good year for the FL planes to be reconfigured to WN standards…for gates to be redesigned to WN’s boarding model and IT platforms merged.
IMHO this is smart. By slowly phasing out the AirTran brand, this will prevent product confusion and chaos from 2 class aircraft showing up on traditional WN segments and visa versa. Gate congestion from trying to board A/B/C style in gates that are not configured appropriately and consumer unfriendly ‘AirTran flight 7121 operated by Southwest’ GDS requirements.
It seems to me that it’s kind of difficult to do a whole lot more until Southwest and AirTran have the ability to code share.
CF hit the nail right on the head. People don’t like change when you talk about brands like Airtran and Southwest. So to keep the business pax and loyal Airtran people you have to slowly merge the people with the airline and not the other way around (if that makes any sense).
Isn’t Atlanta Airtran’s biggest base? Pretty sure it is. So instead of making people defect to DELTA the other Atlanta monster airline down there; you have to sorta prepare people. And not make them scream and run for the hills.
Yes, it is the biggest base.
So if I understand correctly, this will not affect the AirTran operation in anyway.
The bigger question I feel is if WN is going to keep a banked hub system that AirTran has or move over to a rolling hub (which Delta does in ATL). Maybe WN needs a rolling hub to get more utilization out of the gates?
Also if anyone could give some tips on how to best figure out the connection banks for any given hub, that would be really great.
At present my home airport (ROC) is served by AirTran but not Southwest. Flying Southwest at present for me means an hour drive to Buffalo. I will be watching this merger with great interest. I hope Southwest equipment comes to ROC and that ROC doesn’t get dropped from the Southwest network. One visit to seat guru was all I needed to convince me NOT to fly AirTran. I’m a big guy and AirTran’s seat pitch is too small for me. Oh well we still have Jet Blue here.
I wonder what will happen to that seating confiquration. My svelt bod (LOL) fits in a Southwest seat, but Air Tran’s seating is a nightmare.
Sardine seating is the norm out of my home airport of Philly unless I do Southwest or pony up for Economy Plus on UA.
Hey Jet Blue, you interested?
Seating will be SWA style, no business class but no tiny AT seats either;)
Help me understand this. Currently there are 4 flights to Chicago on Airtran. In February there will be 4 Airtran flights + 4 Southwest flights, 8 total flights to Chicago Midway on the same airline (at least ownership). Doesn’t this bring up issues of having #1 gates available and #2 saturating the route with too much capacity?
If Airtran has the right schedule & capacity why not just drop one flight and change it to WN….phase it in rather than adding capacity overnight?
Funny, I was thinking the exact same thing. Is there really capacity for 8 flights a day from ATL-BWI, or is this just going to result in a bunch of half-empty planes buzzing around? I was also wondering if a smarter way to do it would have been go to from 4 FL/0 WN to 3 FL/1 WN, then 2 FL/2 WN, etc.
Well, it depends if Southwest has determined they actually want 8 flights on ATL-MDW then they’ll go from 4 FL/0 WN, 4FL/4WN, 3FL/5WN, 2 FL/6WN etc…
Don’t forget that MDW is basically a dead-end for AirTran, and if Southwest was serving Atlanta on its own it would be a dead end also. Combining the 2 airlines and this is now a hub-to-hub situation (as close to one as you can get with Southwest).
No, Currently there are 6 flights to both MDW & BWI on Airtran, which drop to 4; 5 flights to HOU, which drop to 3; and 3 flights to DEN, which drop to 2. With the Southwest additions, MDW & BWI each will have 8 (net gain of 2); HOU will have 6 (net gain of 1) and DEN will have 4 (net gain of 1)
So, I get this strategy, and I think it’ll work.
Although, it has a major drawback in comparison to a Day One “hard cut” strategy. If AirTran flights are going to slowly disappear and be replaced by Southwest flights, I’d wonder if those folks who used to book AirTran for a specific route, would just presume that they stopped serving that route, and book elsewhere, such as on Delta? Depending on how they’re handling GDSes this is a pretty big danger. I hope Southwest is willing to get off their no GDS high-horse and keep former AirTran routes listed on the GDSes.
Also, I wish CF went with Julia Child instead of the Swedish chef. I was looking forward to seeing him with his second sex change in as many weeks.
Some interesting points have been made and WN needs to plan ahead on the GDS issue.
If they operate as they do now, only Sabre travel agents/corporate travel departments would be able to see WN flights. What will GDS users who can now see and book Airtran but not see WN do when Airtran starts to vanish out of their non-Sabre computers? They could just start booking other airlines thinking the airline doesn’t fly the route anymore.
Will WN now move to full GDS participation in all GDS’s? If not, this could be a win-win for DL in Atlanta, at least for awhile.
The code-share will be in place long before AirTran completely disappears. This seems like a smart move by WN and I hope this works for them. On an interesting
side note: This is very similar to how Martin Shugrue suggested National be merged into Pan Am 30+ years ago. To paraphrase him: “Let’s have Pan Am Overseas and Pan Am Domestic and take 10 years to merge it all together…” Well, we know how that turned out. Seawell wanted the whole thing slammed together in one day. When you have two substantially different operations, best to blend them together slowly, even if one operating style is to be essentially eliminated (assigned seating, biz class etc…). The FL acquisition is WN’s biggest move to date, and they’re not about to rush it.
I think the strategy makes sense with the slow replacement of FL flights w/ WN flights. Not sure the markets can bear the increased frequency, but I’m not an airline analyst! Personally as an ATL resident, this merger does not seem to be a plus. At least FL & DL had a somewhat similar product. WN has no business class, cattle car boarding, and multi-stop itineraries. It will be interesting to see if WN will avoid multi-stop itineraries from ATL. Bag fees are the only differentiator now.
Just wondering besides the regionals and B6 why doesn’t any LCC (Airtran, Southwest, Spirit, Frontier, etc) serve SYR. I mean they serve all the other airports around them except for that city. And that city has a lot compared to the other cities in upstate NY that have LCC service.
Because B6 can serve it from JFK which is fairly close. Also it satisfies the New York senators who have a close relationship with B6.
Most others serve ROC about an hour away.
Don our County Government (Monroe County) made a concerted effort to bring LCCs to ROC. Before this was done ROC was one of the most expensive places to fly to or from. Now ROC is in the top 20 of least expensive places to fly to or from . Maybe your city and county government needs to get on the ball on this.
I don’t travel to SYR that often. When I do I go on US, AA, or B6. But after your comment I just did research and you are exactly right. Well if SYR wants any business they will either do something or see little activity in that area or very small growth while BUF, ALB, and ROC take their customers. That’s why Canadians drive across the border and fly out of BUF. Anybody who REALLY travels knows that. Some just travel out of Canada to stay loyal.
Hence this topic of WN coming into Atlanta.
On a happy note today cheapflights.com listed ROC as the 12th most affordable airport to fly from in the U.S. People used to drive to Toronto when traveling internationally because it was cheaper than flying out of ROC. This is no longer the case.
Your obvious bias toward swa shows again. I find their product subpar and Atlanta will be lose a decent carrier (AIRTRAN) and gain service for the Jerry Springer crowd to get to Midway.
So, they’re scheduling planes into ATL. Ok, that’s a small piece of the pie when merging two airlines. Over the past 30 years I’ve watched and participated in numerous mergers. Pan Am and National had their issues in that merger. For years, crews were segregated by the Orange or Blue identity of each carrier.
Delta and Western. Union and Non Union issues. I believe Delta did NOt honor any Union contracts from Western. American and TWA, of course, the TWA employees were stapled to the bottom of the seniority list and after 9-11 furloughed or dropped off the list permanently. Laws were changed because of this merger!
The Southwest/AirTran merger has a long way to go. Union issues, aircraft configurations, galley, service issues resolved. Scheduling issues, passenger service issues, etc..etc..etc. all need to be resolved by management and in some cases, UNIONS need to vote on these changes.
Very few MERGERS have gone smoothly. Time will tell.