How AirTran-Southwest merger affects customers

Posted Sep. 27, 2010 at 11:51 a.m.

By Sara K. Clarke, Orlando Sentinel | Orlando-based AirTran Airways said today it has agreed to be bought by Dallas-based Southwest Airlines, which is the busiest carrier at Orlando International Airport. What does this mean for customers and shareholders? Read on to see:

When is this going to happen?

Two groups need to approve the deal before it goes through — AirTran stockholders and federal regulators  — and the airlines say it could take months for both to occur. After the merger closes, Southwest said it could then take as long as two years to integrate the airlines and begin operating as one carrier. The airlines expect to be operating as one carrier sometime in 2012.

What if I’ve booked an upcoming AirTran flight?

“As of today, nothing changes for either company,” said Bob Jordan, Southwest’s executive vice presidnet of strategy and planning. The airlines will continue to operate separately until the deal is completed, meaning any AirTran flights in the near future will proceed as usual, under AirTran’s direction.

Does this mean Southwest will fly to more places?

Yes. Southwest says it likes the fact that AirTran flies to many destinations – especially smaller cities – that Southwest currently does not serve. Customers will likely benefit from expanded offerings, though of course Southwest and AirTran will no longer compete in certain markets, which is likely to mean fewer discount fares.

What happens to the AirTran brand?

It will eventually go away. After the merger, the airline will operate as Southwest, and the AirTran brand will not be used. The new airline will use also Southwest’s logo and colors.

What about Southwest’s Bags Fly Free policy?

Right now, Southwest says it has no plans to change its free-bag policy. It also plans to keep its “open seating” boarding system and single-class cabins. But the airline said it wants to learn from AirTran – a discount airline that flies with business-class seating on every flight and charges for even the first bag checked.

What about my frequent-flier miles? Do I need to do anything?

Southwest says it will merge the AirTran A+ Rewards program into its own Rapid Rewards frequent flier program over time. It will notify customers as the process goes forward.

What will AirTran stockholders get from the deal?

AirTran shareholders will get a combination of cash and Southwest stock in exchange for their shares. The companies estimate the payout will be between $7.25 and $7.75 a share, which represents a significant premium on the airline’s current stock price.

How will this affect pet owners who fly AirTran?

Southwest charges a bit more for pets who fly – but not much. According to their web sites, AirTran charges $69 each way for small pets who accompany their owners onboard, while Southwest charges $75 each way. Neither airline allows pets as cargo.

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