Southwest buying AirTran for $1.4 billion

By Rhonda Cook and Kelly Yamanouchi

The Atlanta Journal-Constitution

Southwest Airlines is buying AirTran Airways for $1.4 billion, giving Atlanta Hartsfield-Jackson International Airport passengers more options for low-cost tickets without the fees other airlines have adopted.

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Nick Ut, AP Southwest Airlines, based in Dallas, has not served the Atlanta market. Now, Atlanta will become its third-largest operation.

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CHRIS RANK, Bloomberg News AirTran will continue to operate as an independent airline until the deal with Southwest is final.

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John Spink, AJC It was business as usual on Monday for AirTran at Hartsfield-Jackson International Airport as travelers line up for curbside check in.

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Tad Hutcheson, a spokesman for Orlando-based AirTran, called it "a great day for AirTran Airways and Southwest Airlines.”

Southwest said the deal includes “significant opportunities to and from Atlanta, the busiest airport in the U.S. and the largest domestic market we do not serve.”

Southwest’s service in Atlanta can potentially stimulate more than 2 million new passengers and more than $200 million in consumer savings annually, Southwest said, citing an economic analysis by Campbell-Hill Aviation Group LLP.

AirTran chief executive Bob Fornaro said in a written statement that the deal with Southwest will give AirTran opportunities to grow “both professionally as individuals and as a group, in ways that simply would not be possible without this agreement.”

Under the deal, AirTran and Southwest would operate as independent companies until the deal closes, then Fornaro would continue work on the integration of the two companies.

Plans for existing AirTran facilities will be developed by integration teams and decisions will be announced later, according to Southwest. AirTran has its headquarters in Orlando but also has some corporate operations in Atlanta.

AirTran stock surged 58 percent to $7.19 in early trading. Southwest stock rose 4.1 percent to $12.78.

There were no reports that a merger was under discussion until the announcement early Monday that an agreement had been reached.

AirTran has about 202 departures daily out of Atlanta, which would be the third-largest operation in Southwest’s network, behind Las Vegas and Chicago Midway, according to AirTran.

AirTran has more than 6,000 employees based in the Atlanta metro area, including about 2,200 flight attendants and about 1,600 pilots. More than 100 work at AirTran’s Atlanta corporate center near Hartsfield-Jackson. AirTran also has reservations centers in Atlanta and Carrollton and an Atlanta maintenance base, along with its operations at Hartsfield-Jackson.

“Southwest has a very well-known corporate culture. They take care of their people, which is going to be a really good thing” for AirTran employees, said AirTran spokesman Christopher White.

“This deal will bring a level of competition to Atlanta that has never been seen before,” White said.

In a post on Twitter Monday morning, Delta Air Lines said, "Even with changing landscape, Delta is a strong competitor with a full-service product & flights to 350+ cities on 6 continents."

Hutcheson said the informal approach of Southwest will be adopted by AirTran.

“They’re a great airline. They offer low fares everywhere. Their intention is to continue growing,” he said.

“Southwest is a growing airline and hiring and they need employees,” Hutcheson said when asked about the effect the merger will have on Atlanta-based workers. “We’ll work through all that as the deal closes.”

Southwest and AirTran said the new airline will operate from more than 100 airports and serve more than 100 million customers.

The deal is worth approximately $3.4 billion including AirTran's debt. Southwest will pay about $670 million with available cash.

The agreement must be approved by federal regulators and stockholders for both companies.

The Associated Press contributed to this article.