Low-cost US carrier Southwest Airlines is buying AirTran Airways in a deal worth $3.4bn including debts.
The move will put Southwest in head-to-head competition with Delta Air Lines in Delta’s home base of Atlanta.
Southwestern will acquire all of the outstanding common stock of AirTran Holdings, Inc. (AAI), the parent company of AirTran Airways (AirTran), for a combination of cash and Southwest Airlines’ common stock.
Southwest, based in Dallas, carries more passengers than any other airline in the U.S. Besides its base in Atlanta, AirTran has hubs in Milwaukee and Orlando, the deal will als give Southwest a bigger slice of the market in cities like Boston and New York, where it has been expanding.
The agreement has been unanimously approved by the boards of directors of each company, and closing is subject to the approval of AirTran stockholders, receipt of certain regulatory clearances, and fulfillment of customary closing conditions.
“Today is an exciting day for our Employees, our Customers, the communities we serve, and our Shareholders,” said Gary C. Kelly, Chairman, President, and CEO of Southwest Airlines.
“As we approach our 40th Anniversary of providing exceptional Customer Service at everyday low fares, 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.
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