This morning as I rolled over and read an incoming e-mail from Southwest Airlines, at 7:12am EST, I was pretty sure what I was reading was practical joke. Southwest Airlines is known for its sense of humor … but this e-mail was one I really needed to read after consuming vast quantities of caffeine found in cans Cherry Coke to take it all in … considering my calendar did not read “April 1.”
What was the news? Southwest Airlines is swallowing up AirTran in its entirety, pending governmental approval. This is not a merger, this is an acquisition, a take over, a buy out to gain ground and eliminate a competitor at a cost of US$1.4-billion … and an estimated total value of US$3.4-billion… and its much more than that.
… the first thought that came to mind was “Thank goodness someone is going to paint over AirTran’s livery, its hideous” … That first thought however was quickly surpassed by the other more important thoughts, such as fleet, network, focus cities, class of service and frequent flyer programs. So I think I’ll just skip to the important stuff.
First off … once Southwest Airlines officially takes over AirTran, the once purely domestic airline, flying a single aircraft type, that always flew around Atlanta will be no more, it will be instantly changed forever.
From the day Southwest Airlines assumes control of AirTran, the airline will instantly become an international airline, flying two types of aircraft and it will not only finally encroach on Delta Air Lines‘ ‘fortress’ at Hartsfield-Jackson Atlanta International Airport, but will immediately go from never having had a presence at the busiest airport in the world, to operating slightly more than 200 departing flights daily from Atlanta.
All of these pieces of the Southwest acquisition of AirTran are important … however access to Atlanta, vast numbers of gates in Atlanta and a ready made network from the busiest airport in the world are at the top of the list.
Also up on the list is the future size of Southwest Airlines’ fleet. The airline will move to operate the 3rd largest ‘mainline’ passenger fleet in the world with 688 aircraft, behind Delta Air Lines and United Airlines (once United and Continental are merged).
Historically Southwest Airlines has only operated the Boeing 737 family of aircraft. This single fleet type has reduced training costs; reduced maintenance costs and allows for fairly easy swapping of aircraft within the fleet. There have been times early on in the history of Southwest Airlines when the airline operated different types leased aircraft, but its fleet has been the Boeing 737. With the acquisition of AirTran Southwest Airlines will begin operating the Boeing 717-200 in addition to its 737 fleet.
Early on in the analysts conference call early this morning the addition of the Boeing 717 was addressed, with Southwest Airlines stating it would retain the 717s as they complimented the small number of Boeing 737-500s in the current fleet for serving smaller capacity destinations. While Southwest publicly states it is maintaining the addition of 86 717s from AirTran, it is possible they will be phased out as Southwest Airlines continues to receive the 106 Boeing 737-700s (73G) they have on order with Boeing.
The acquisition of AirTran also gives Southwest Airlines an additional 52 Boeing 737-700 (73G) aircraft … however the Southwest Airlines has not yet addressed the issue of 19.2% of the 52 73Gs being leased, with 8 belonging to GECAS and 2 belonging to ILFC. Generally Southwest Airlines owns their own aircraft, presently only leasing two aircraft from its active fleet of 550.
For years many people both inside and outside the industry have speculated on how Southwest Airlines would continue to grow and if they would explore international routes. In one single swoop Southwest Airlines has found itself access to new cities (ATL), beefing up cities where it has a smaller presence (MKE), reinforcing cities where it has a large presence (BWI), making in- roads at restricted airports (DCA) and finding its legs in its entrance into the international market.
While AirTrans’ international presence is small, its destinations in Cancun, Montego Bay, Aruba, Nassau and Punta Cana are enough for Southwest Airlines to get its feet wet in the international market, before expanding further. Many airlines would see this limited number of international markets minimal, but for Southwest Airlines this is huge because it has been so domestic focused for so long.
But now that I have bored you with some aspects of the business side of Southwest Airlines taking over AirTran … lets move on to what you care about … the passenger experience.
This take over is not a merger; there will be no legacy of AirTran retained. Southwest Airlines is a solid airline, with a strong brand and significant loyalty … so going forward, once the acquisition is approved … it will be all about how Southwest Airlines runs an airline.
Southwest Airlines notably is a one-class cabin on every plane and flights have no assigned seats. AirTran offers a first class and economy class cabin, with assigned seats. AirTran flyers will need to get used to sitting in economy or find a new airline. For those who enjoy assigned seats, Southwest Airlines will be eliminating it and maintaining business as usual, which means ‘cattle call’ boarding. This is a change for many flyers, especially frequent flyers.
The frequent flyer programs between the two airlines are extremely different … and only one frequent flyer program will be retained, Southwest Airlines Rapid Rewards. Southwest Airlines’ frequent flyer program is straightforward … fly eight round trips and get a free flight. There is no elite status level for upgrades, as there is only one class of service.
If you are annoyed with AirTrans’ baggage fees, you can rejoice! Southwest Airlines will eliminate baggage fees, as “Bags Fly Free” with the airline. Many people choose Southwest Airlines for its straightforward approach and the fact that they aren’t paying for their bags.
Dallas-Fort Worth flyers hoping that Southwest Airlines will add service to Dallas-Fort Worth International Airport (DFW) where AirTran flies … do not count on it. Under the Wright Amendment, the one that has restricted Southwest Airlines for years, Southwest Airlines cannot operate from Dallas Love Field (DAL) and DFW. Love Field is Southwest’s home and the epicenter of their corporate culture, so I don’t foresee them ever moving to DFW.
For those of you who purchase premium seats on Delta Air Lines out of Atlanta on routes where they competed with AirTran … watch for your first class fares to increase. As Southwest Airlines has only economy class seating, Delta Air Lines is no longer competing for premium traffic.
If you really like GoGo Inflight internet … chances are GoGo is Going-Bye-Bye in favor of Southwest Airlines’ Row 44 inflight internet. GoGo operates from ground base signals, where as Row 44 is a satellite based in-flight connectivity provider.
Photographers who fly AirTran should be happy with the Southwest Airlines taking over AirTran, it means not only will equipment cases fly for free … but Southwest Airlines also allows media to pre-board so we can stow our gear ahead of the heard.
Not happy with the idea of Southwest Airlines acquiring AirTran and hopping the government blocks the take over? Well it is more than likely you’re out of luck. The two airlines have almost no route overlap and they takeover do not reduce routes or restrict the competitive nature of the industrial
So … now I guess we sit back and watch Southwest Airlines evolve once more, change directions once more and continue to be one of the airlines consistently making intelligent moves as a slow and measured pass.