Southwest Airlines said it plans to close its buyout of AirTran Airways on May 2 but expects to maintain AirTran's brand and policies for months afterward.
The deal will bring Dallas-based Southwest to Atlanta and will eventually bring an end to Orlando-based AirTran.
Southwest is still waiting for clearance from the U.S. Department of Justice for the deal but said Thursday it expects to receive all regulatory approvals by May 2.
Southwest also announced that Bob Jordan, executive vice president of strategy and planning, will become president of the AirTran subsidiary once the deal closes. He'll oversee the operation as AirTran is folded into Southwest, a process that will take until 2013. Jordan will continue to be based in Dallas.
AirTran chief executive Bob Fornaro will move into a consulting role. Fornaro's take from the merger is estimated at $5.7 million, including pay, bonuses, benefits, accelerated equity awards and a two-year consulting agreement worth up to $1.16 million, according to a filing with the U.S. Securities and Exchange Commission.
For months after the deal closes, "We'll continue to have the AirTran brand," Southwest CEO Gary Kelly said in an analyst conference call after the carrier reported first quarter profit of $5 million, down from $11 million a year ago.
"Its policies, its procedures, its product features will remain unchanged for some period of time," he added. For example, Southwest does not charge checked baggage fees as AirTran does, but that is not expected to change immediately.
Southwest doesn't currently plan to change AirTran's flight schedule for this year, but "once we dive in on May 2 we might see some things that we like and we don't like and we might try to tinker with the schedule," Kelly said.
He said Southwest is also considering how to market its merger partner and "keep the AirTran brand alive" during the transition period. "We're going to have to do something, I think, to make sure that customers aren't confused, for people who go to AirTran and think they'll get the Southwest product."
What will happen quickly is Southwest's assumption of many corporate responsibilities at AirTran. Some AirTran executives are already departing. AirTran's operational departments will continue on until the two airlines get a single operating certificate from the Federal Aviation Administration, expected in 2012. The rest of AirTran's organizational structure will be "refined" over the next few weeks, according to Southwest.
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