Tuesday, September 28, 2010

Southwest-AirTran merger means more cities, maybe not lower fares

The latest billion-dollar airline merger involving Southwest Airlines and a low-cost competitor almost certainly will give passengers more destinations to fly to from Nashville International Airport, but it won't necessarily mean lower fares on all the new routes.
That's the consensus opinion of airline analysts and business travelers after Monday's announcement of a pending merger between Southwest Airlines and AirTran Airways.

Southwest is already the largest carrier at Nashville International, with more than half of the airport's daily flights, and the merger would add 37 cities to Southwest's route map, including Atlanta's giant Hartsfield-Jackson Airport.

"We do see some opportunities for additional service in Nashville," assuming that the deal is approved by regulators, said Raul L. Regalado, president and chief executive officer of the Metropolitan Nashville Airport Authority. Not all of those new cities would necessarily be served directly from Nashville, though.

RelatedQuestions, answers on Southwest-AirTran mergerWhere AirTran flies that Southwest doesn't

Southwest Airlines will buy AirTran in a $1.4 billion cash-and-stock deal that expands its markets in the Southeast and on the Eastern seaboard. If debt and aircraft operating leases are included, the deal is worth $3.4 billion.

The merger also would bring the first international service to Southwest, as AirTran now flies to destinations such as San Juan, Puerto Rico; Aruba; Nassau, Bahamas; and Cancun, Mexico.

The buyout, funded mostly with debt, would also give Southwest a bigger slice of the market in cities such as Boston and New York, where it has been expanding recently.

"But what this does for Southwest is provide them immediate access to the Atlanta and New York markets," Regalado said. AirTran doesn't serve Nashville now, but some cities that AirTran serves — where Southwest doesn't fly — could be added to Music City's air destinations.

Orlando-based AirTran is the successor to ValuJet, a low-fare carrier created in Atlanta in 1993 mostly by former Eastern Airlines executives.

Fares may not come down

The deal won't necessarily mean lower airfares in Nashville, Atlanta or anywhere else that Southwest flies, said Tom Parsons, who operates the BestFares.com website.

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