On Sept. 27, Dallas-based Southwest Airlines announced plans to acquire Orlando, Fla.-based AirTran Airways. In the transaction, Southwest will pay AirTran shareholders approximately $1.4 billion in cash and stock, according to Southwest spokeswoman Marilee Mecinnis. When Southwest takes on AirTran’s debts and leases, the deal will cost a total of roughly $3.4 billion.
Madeleine Johnson, vice president and general counsel of Southwest, says she expects the proposed deal to close formally in early 2011. “We have two events that have to happen first,” says Johnson: AirTran shareholders and the U.S. Department of Justice’s Antitrust Division must sign off on the deal. Once AirTran shareholders and DOJ bless the deal, the two airlines will integrate operations. As a result of the deal, Southwest will have access — or, in some cases, better access — to airports such as Washington, D.C.’s Ronald Reagan National Airport; Hartsfield-Jackson Atlanta International Airport, which is the largest domestic market Southwest does not currently serve; New York’s LaGuardia Airport; Boston Logan International Airport; and Baltimore-Washington International Thurgood Marshall Airport. “We are not looking for downsizing; we are looking for growth opportunities,” says Johnson. “It’s very exciting.”
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