What the Southwest/Airtran merger means for consumers

Filed under: Business, Airlines, NewsSouthwest Airlines announced yesterday that it will acquire Airtran in a cash plus stock deal.

Here's what to expect:

1.) Good news for Airtran passengers and travel to/from/through Atlanta in general. Southwest has better service than Airtran, and lower fees (assuming that Southwest keeps the low/no-fee model, see number 4, below). Southwest is not keeping the Airtran brand.

2.) Southwest and Airtran don't have much route overlap, so the merger in and of itself won't lead to higher fares. But both airlines offer aggressive airfare sales almost weekly. We'll see fewer of these, and fares will inch up. Remember, though, that fares can only go so high before consumers stay home, drive, take the BoltBus, or Amtrak. One route that does overlap is Boston to Baltimore, which both airlines fly nonstop for $78 round-trip; but JetBlue flies the route at the same fare, so as long as there are two airlines flying nonstop on the route, prices will stay reasonable. (In fact, Baltimore probably has the most overlapping routes, so we expect fares to go up there.)

3.) More fare pressure if other airlines continue the merger dance. American and US Air must be in panic mode as Southwest continues to grow. What next? An American/US Air marriage? Frontier/Midwest combine with USAir? JetBlue+American? The Southwest/Airtran merger came out of the blue, so anything and everything could be on the table.

4.) This impacts Delta, at least at first, the most. Will Delta eliminate checked bag and ticket change fees on competing routes to/from/through Atlanta to compete with Southwest's fee model? Or will Southwest add fees? Airtran was a minor thorn in Delta's side, but Southwest is going be a major thorn. Airtran was not a particularly healthy airline financially, and Southwest is.

5.) Southwest now becomes an international airline, if it keeps Airtran's routes to Aruba, the Bahamas, etc. It also becomes a multi-aircraft airline, if it keeps Airtran's Boeing 717's along with Southwest's 737 fleet.Continue reading What the Southwest/Airtran merger means for consumersWhat the Southwest/Airtran merger means for consumers originally appeared on Gadling on Tue, 28 Sep 2010 13:00:00 EST. Please see our terms for use of feeds.Permalink | Email this | Comments

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