
Southwest Airlines Senior VP-Finance and CFO Laura Wright told investors and media at the 2010 Hudson Securities Airline Conference Wednesday morning in New York that SWA’s proposed acquisition of AirTran Airways is on track to “close in the first half of 2011.”
Following the US Dept. of Justice’s second request Nov. 8, “we are working on fulfilling their information needs,” said Wright (ATW Daily News, Nov. 10). She noted that SWA filed its S-4 Registration Statement with US Securities and Exchange Commission on Nov. 19. “Now what remains is to have the AirTran shareholders’ approval and receipt of DOJ and any other necessary clearances, plus the fulfillment of customary closing conditions,” Wright said.
After a record third-quarter net income of $195 million (excluding special items), Wright said that, assuming traffic and revenue trends continue, SWA expects “solid revenue improvement” in the fourth quarter (ATW Daily News, Oct. 22). “We have strong December bookings and, excluding fuel and related taxes, we expect fourth-quarter 2010’s unit costs to increase, year-over-year, in the 6% range,” Wright said.
Looking to 2011, Wright said ASMs are forecast to be “up in the 8% range in the first quarter of 2011 and in the 5% range in the second quarter.”
Discuss this news 34
I'm truly sorry to see
By Jim PittsI'm truly sorry to see AirTran being taken over by SouthWest. AirTran has built a loyal following and has put Delta on notice that they (Delta) are no longer the airline passengers favorite carrier. SouthWest is good and I just hope they don't screw up the fine people who work for
AirTran
Sorry Jim but are you really
By AnonymousSorry Jim but are you really serious? I would think just the opposite since Southwest is number one in least passenger complaints and I have only heard NEGATIVE feedback on AirTran....
Are you serious? Air Tran
By AnonymousAre you serious? Air Tran could only dream of being the airline that Southwest is, and have the people that it does. Southwest will do Delta what Air Tran hoped to do.
Yes, Southwest will truly be
By PhilYes, Southwest will truly be bringing the cattle car and higher fares to ATL. DL will be grateful as it eliminates their biggest competitor.
Phil, On behalf of the
By ChrisPhil, On behalf of the hardworking Crewmembers of AirTran, thanks for your kind words. We are very proud of what we have accomplished in the past and look hopefully to to the future by adding some of our corp culture to what is already a great industry leader that is Southwest Airlines. Maybe an ever better company will emerge.
And thanks to you to Jim
By ChrisAnd thanks to you to Jim
I have a few comments from an
By PaulI have a few comments from an industry insider. Air Tran is a quality product in the air. However they are let down when you call the reservations department. The people there are mostly - not all - rude and very unexcited - whoever heads up that department will need the ax during the merger. Southwest on the other hand at ALL levels offer a well oiled machine not only in the air but also on the ground and in their reservations department the Southwest Spirit is alive an kicking - this is where AirTran will finally be able to compete with an ever impressive Delta behemoth. I think DL and FL/WN will compete well in ATL and cant wait to see the results.
Does anyone know what is happening to the MD95/Boeing 717's? Will they stay in the fleet? I am hoping so... its the last of a dying breed. quiet comfortable and efficient ... who says RR doesnt know how to build a good engine.. just look at the 717.. :-)
they will keep them to see if
By Anonymousthey will keep them to see if the fleet works within there network, if not they will be traded in for more 737-800's.....
Both are good airlines,
By AnonymousBoth are good airlines, however, being from Houston, I am glad to see SW coming to Atlanta. This will upgrade services and allow us to fly to places we have not been able to do so before at a reasonable price. We despise DELTA and their price gouging ways.
I totally agree Jim. Seeing
By Jared HesseI totally agree Jim. Seeing AirTran go will be very sad. I live in the Atlanta area and ALWAYS fly AirTran. I never thought I would see them swallowed up by another airline. I just hope that SouthWest doesn't ruin everything.
You must don't fly much.
By AnonymousYou must don't fly much. Airtran is a very good airline. I fly them all the time and the service is great. and crew is very friendly.
SWA's frequent flyer programs
By Air Tran Fequent FLyer Elite memberSWA's frequent flyer programs are nowhere as good as AT's. And losing Business Class seating is going to cost SWA some business customers over to Delta unless SWA does something to improve the cattle call for frequent flyers.
Does any one know how much it
By GaGaDoes any one know how much it cost to bring golf bags on a flight? Flying out first of Feb.
Totally agree. Southwest is
By VikramTotally agree. Southwest is by far the best domestic airline.
Free bags. No change fees.
By AnonymousFree bags. No change fees. I switched to Southwest from Delta years ago, and couldn't be happier. Free ticket every 8 round trips. On Delta, you can earn as few as 1,000 miles per round trip, and the only seats that seem to be available cost 40-60k miles (they kept upping the "prices", so I have no idea what they are these days). I stopped falling for the marketing about how great Delta's frequent flyer program is. Then there are those business class upgrades. I was a silver medallion SkyMiles member, but was traveling to a smaller town on the regional jets that have no business class, so I had a huge pile of upgrades-- that I NEVER got to use. I went on vacation on a full sized jet, but because I bought a cheap ticket, I couldn't upgrade, so being a loyal customer was worthless. I once got involuntarily bumped off a flight (didn't know that would ever happen as a Silver Medallion flyer). Then there were the very frequent flight cancellations which drove me to other airlines. Phew. Glad to have broken Delta's spell. You can walk away from your bank of miles and still be better off.
"Southwest will bring higher
By Deek"Southwest will bring higher fares to Atlanta" and "get run out of town by Delta"... In every new market Southwest has gone in to, prices have dropped signficantly! Delta will find out what American, Continental and all the "old boys" have and that is "Game on" ... and SW always comes out the winner!
I had understood that SWA
By JackI had understood that SWA would continue to use the same airports that ATW did if they did not now. Will SWA begin to use Huntsville, AL where ATW is now?
As a frequent business
By AnonymousAs a frequent business traveler I hope the merger is successful. Cheap tickets, no reserved seats, and the casual atmosphere that Southwest brings to the table is sure to be a big draw to students and families with small children. I wish them all the luck in the world. But I think for my piece of mind and overall comfort, I will stay with Delta
I'm an "A Lister"on SWA. That
By spearsallI'm an "A Lister"on SWA. That means I fly 32 flights per year or more. Have been for nearly 5 years. I dread flying anyone else. Why? Because the other airlines could give a rats butt about getting me to my customers on time and feeling good about doing it. SWA will bring good service, attitude and efficiency to those in ATL. You don' know what you have been missing...Air Tran was the top of the second tier...now they will rise to the top and Delta clients will begin to see what flying is all about.
Here's my personal SWA experience. Flying them since 1998, A Lister since they created it 5 years ago. They have lost my bags 2 times. Once in a blizzard, the other was their mistake (they offered me cash for the inconvenience which I refused). I have had 2 mechanical delays, and one cancellation (last week with the blizzard in Western NY). Compare that to anyone. If you take your business travel seriously...fly anyone you want. If you wan to get to where you are going mostly on time...SWA is the only way to go. That's why they get 90% of my travel dollars.
I agree with Deek. Delta is
By BoeExecI agree with Deek. Delta is the biggest price gouger in the industry ...!!. Let's face it. The only people saying anything positive about Delta work for Delta. I grew up on the airline! It has gone straight to ... and sticks it to the customers in markets they dominate.
I am sorry to see this
By SteveI am sorry to see this happen. I have been flying AirTran since it was Value Jet and have always had good experiences. I hope that southwest will do us good in ATL, but I have my doubts.
HA This is funny... Airtran
By AnonymousHA This is funny... Airtran is terribly abusive to their workers. Every single person at airtran I know (hundreds) is excited to see airtran dissapear of they face of the earth.... SW is being viewed as liberators... it is however a testament to the workers at airtran that they remain professional and helpful despite the abuses they suffer on a daily basis from their company.
I second Jim's comments. I
By AnonymousI second Jim's comments. I have had wonderful experiences with Airtran and I hope Sothwest doesn't cancel any of their routes some of which serve under-served markets (Milwaukee, Portland Maine, Rochester NY, etc.) (Hopefully they won't because the flights are always packed but who can predict what airlines will do?) Their flights are almost always on time and the people are pleasant. Very sorry to see them go.
Southwest will be able to
By John GSouthwest will be able to charge higher prices after the merger because it will kill a competitor’s innovative last-minute/short-notice pricing model.
AirTran utilizes a unique computerized price model for last-minute/short-notice reservations. AirTran is an innovator though its utilization of a pricing model that an empty seat at the last minute is an empty seat and should be offered at the lowest price.
The following table shows the best price for a one-way ticket from Baltimore to New Orleans when made three days out and again when made one day out.
Res Date Flight Date City Pair
12/20/2010 12/23/2010 BWI-MSY
Southwest $351
Airtran $151 -$200
12/22/2010 12/22/2010 BWI-MSY
Southwest $351
AirTran $125 -$226
Southwest seems to be following the computer pricing model followed by legacy airlines – as we close in on flight time the fare continues to go up. Do we want the pricing model of legacy carriers that to become the pricing model for low-costs carriers?
The goal of airlines is to fill every seat to maximize revenue and profit. AirTran’s pricing model accomplishes this and does so at a cost LOWER to the consumer.
Baltimore to New Orleans is not an isolated example of this pricing model.
Res Date Flight Date City Pair
12/20/2010 12/232010 BWI-FLL
Southwest $321
AirTran $265 -$56
12/20/2010 12/23/2010 BWI-IND
Southwest $199
AirTran $176 -$23
12/20/2010 12/23/2010 BWI-JAX
Southwest $187
AirTran $168 -$19
12/20/2010 12/23/2010 BWI-MCO
Southwest $286
AirTran $186 -$100
12/20/2010 12/23/2010 BWI-MKE
Southwest Nothing Available
AirTran $186 ???
12/20/2010 12/23/2010 BWI-RSW
Southwest $313
AirTran $229 -$84
These represent fares for various short-notice situations. If Southwest were the only choice, one would have to pay from 11.3% to 53.7% more. These fare differences are substantial. And, in one case, one would not be able to get where they needed to go.
But, what if I have a last-minute situation?
Res Date Flight Date City Pair
12/18/2010 12/18/2010 BWI-BOS
Southwest $161
AirTran $99 -$62
12/18/2010 12/18/2010 BWI-MCO
Southwest Nothing Available
AirTran $98 ???
12/18/2010 12/18/2010 BWI-TPA
Southwest Nothing Available
AirTran $90 ???
Here, someone needed to go from Baltimore to Boston on the same day. Southwest’s “Wanna Get Away” (the best fair they offer in any market)—$139. AirTran—$99. Bottom line: Southwest is 40% more.
This is not two legacy airlines on the verge of filing bankruptcy merging in order to create efficiencies to lower their cost structure that could not do in absence of merging. This is two healthy airlines with two divergent low-cost carrier business models and two dissimilar computer pricing models.
Southwest is not new to the takeover market. Southwest faced competition much like AirTran and eliminated that competition by acquisition and then shut-down.
In 1986, Southwest purchased competitor Muse Air, who like AirTran, operated a low-cost business class and coach class service from coast-to-coast utilizing a fleet of DC-9’s (the precursor to the Boeing 717). Promising at the outset not to change the things that made Muse so popular, Southwest shut it down within 18 months of the take-over.
Southwest will kill AirTran’s pricing business model.
Should the Southwest pricing become the standard for 70% of the low-cost carrier market? Should Southwest’s “cattle-car" service model become the Microsoft Windows operating system for low-cost carriers? Does this mean that anyone wanting a low-fare will never see a business class seat or a reserved seat because Southwest, holder of 70% of the low-cost carrier market has deemed that as the norm-for the market?
Last March I gave up my seat
By CaptbobLast March I gave up my seat on an overbooked AirTran flight in exchange for 2 complimentary round trip tickets. I have tried numerous times to use these complementary tickets (usually with a 4 to 6 week lead time) only to be told that no seats were available. I look forward to Southwest's takeover and an improvement in customer service.
Does anyone know what will
By aegisroseDoes anyone know what will happen to those of us with AirTran "miles" (credits)? Do I need to use them quicklike or will SW let me use my credits with their routes once this merger completes?
John G, I see what you're
By Anonymous001John G, I see what you're doing there and your point is well taken. Also, I acknowledge that I'm neither a frequent flyer or a business class flyer.
For my situation, Southwest (and their model) remains the best carrier. I travel from the west coast to the east coast about twice a year, visit my grandson, and return home. I ALWAYS have bags to check as I stay for 2-3 weeks and schlep gifts to him. My trips are planned out in advance and I book the flights when I have worked out suitable dates.
AirTran would charge me an additional $95/RT for the checked bags, bringing your quoted fares up significantly.
Additionally since I usually book well in advance, with Southwest, I am able to take advantage of lowered fares even after my reservations have been made. Multiple times, in fact, and there are no change fees for doing so.
Again, I realize I'm an atypical passenger, but Southwest and their model work for me, and I'm not alone.
I am an Atlanta resident, but
By DaveI am an Atlanta resident, but my friend in Tallahassee always flies cheaper on Delta even though he has an extra leg and changes to the same flights I take from ATL. Last month I saved money driving to Tallahassee to catch a Delta flight to London. Yep, I still had to change planes in Atlanta. Anything that gives Delta competition is great with me! ...
Any word what will happen (&
By AnonymousAny word what will happen (& when) with the DFW/Dallas Love field markets? Will SW be forced to give up Airtrans DFW spots??
As an AirTran stockholder, I
By AnonymousAs an AirTran stockholder, I am happy to see the merger.
This merger is really putting
By Charles SuttonThis merger is really putting Delta in auncomfortable spot. For years, they have cried foul every time that southwest wanted to get into Atlanta and at the same time and behind the scenes bullied to keep them out. With this merger they have got some real trouble due to the fact that Airtran has 20+ gates at Atlanta.
Anyone have any idea how
By NYCAnyone have any idea how Airtran has been with delays recently....and also what was the longest delay they experienced???
Silver Medallion??
By AnonymousSilver Medallion?? Pffft...please.lol
Not Really. I doubt you'll
By AnonymousNot Really. I doubt you'll see much of a fare decrease from the one Airtran already offer. Delta won't be going anywhere.lol
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