September 27, 2010
Southwest Airlines is buying AirTran for about $1.4 billion as it seeks entry into a number of smaller markets. AirTran offers flights in and out of Wichita's Mid Continent Airport.
The announcement comes about a week after Continental Airlines and UAL Corp. combined amid an industrywide consolidation.
The companies said Monday that the new Southwest-Airtran operation would operate from more than 100 different airports and serve more than 100 million customers. "The acquisition of AirTran represents a unique opportunity to grow Southwest Airlines’ presence in key markets we don’t yet serve and takes a significant step towards positioning us for future growth", said Southwest President and CEO Gary Kelly.
The deal is worth approximately $3.4 billion including AirTran's debt. It will pay about $670 million with available cash.
Southwest Airlines Co. gets more exposure to existing markets like New York and Boston and it can get into smaller markets it doesn't already serve.
Shares of AirTran Holdings Inc. rose nearly 4 percent to $4.55 in premarket trading.