Thursday, January 29, 2015

Southwest Airlines taking over AirTran

$3.4 billion deal makes Southwest Air bigger

Southwest Airlines taking over AirTran

Southwest Airlines says it's paying $1.4 billion (and taking over $2 billion in debt) to acquire low-cost rival AirTran. Price works out to around $7.69 a share in cash and stock, which Southwest says is a 69% premium to AirTran' recent share price.

Deal still needs AirTrans shareholder approval and routine federal regulatory approval. The combination may mean some jobs and flights will be combined at airports like Philadelphia International that are served by both airlines. Southwest statement here.

Update: Why this deal, why now? Southwest's status as a relatively efficient, popular, mid-sized airline "won’t work once the domestic industry becomes the massive trio of United, Delta, American" following pending mergers, writes commentator Jason Bachman in this brief Bloomberg LP note. Plus AirTran gets Southwest into Latin America in a bigger way. Tho he "expects some lumps" in the merger, Southwest's largest. Plus "it may well feel pressed to add more airlines in the race to compete."

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
Business Videos:
Also on Philly.com:
Stay Connected