Two of the biggest discount airlines in the U.S. will merge next year when Southwest Airlines buys AirTran in a $1.4 billion deal, reports the Associated Press. The acquisition has been approved by the boards of both companies, but is still subject to shareholder and regulatory approval. Assuming everything goes through, the deal is expected to take effect in the first half of 2011.
What does this mean for travelers? Airline mergers typically spell reduced competition and higher fares — and this may well occur in cities where Southwest’s routes overlap with AirTran’s (such as Baltimore/Washington and Orlando). But there are a few silver linings too.
Travelers who’ve been waiting for Southwest to extend its low fares to cities outside the U.S. will get their wish; the airline will absorb AirTran’s current routes to Cancun, Punta Cana, Montego Bay and other vacation destinations in Mexico and the Caribbean. In total, Southwest will gain access to 37 new cities, including Atlanta — which has been the biggest hole in its network. The airline will also strengthen its existing presence in major cities like New York and Boston.
Perhaps the best news of all? Once the airlines are fully integrated, Southwest does not plan to keep AirTran’s checked baggage fees (currently $20 for the first bag and $25 for the second).
What do you think of the proposed merger — will it help or hurt travelers?
–written by Sarah Schlichter