Airline industry news doesn't get much bigger than this: Southwest this morning announced it would buy AirTran, forming a low-fare, low-cost behemoth that could give the four remaining carriers networks tougher competition for years to come. Southwest and AirTran have among the lowest operating costs in the industry and by combining will be more competitive in major cities, including New York, Boston and Washington, where the two are now smaller players. An AP story on the basics is here and check back as the day goes on for more developments and analysis.
UPDATE: From a Wall Street perspective, analyst Michael Linenberg of Deutsche Bank likes the deal and thinks it will be approved by federal regulators, especially since the Continental-United merger just sailed through the process unscathed. There is relatively little overlap between AirTran and Southwest route systems, and this gives the combination a stronger network, a necessity in a time of industry consolidation, he said. Southwest also gets to operate from AirTran's Atlanta hub, where it has been giving Delta competitive fits for years. The aircraft fleets of the two airlines are largely compatible, with SW operating only Boeing 737s and AirTran mostly doing the same.
At PHL, AirTran and Southwest already share a terminal (E), and this merger will make that concourse low-cost carrier central. If you haven't seen E recently check it out: Southwest has almost a dozen gates available to it, with the addition of a rotunda at the end of the E concourse.The secured areas of D and E are now one, with a shared security checkpoint, and ticketing and baggage claim areas are practically merged.