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Southwest announced that it expects its acquisition of fellow low-cost carrier AirTran to close on Monday, May 2, roughly seven months after the deal was announced.
“With the overwhelming approval of AirTran stockholders in March, we are ready to move forward with closing the transaction, now planned for May 2nd,” said Gary Kelly, Southwest’s Chairman, President, and CEO. The airline said Bob Jordan, Southwest’s Executive VP, will be appointed as President of AirTran and guide the carrier through its integration with Southwest.
So what’s left to do before the deal can close? Well, as mentioned above, AirTran shareholders have already approved the deal. Southwest still needs approval from the government, however, which could come at any time. Southwest wouldn’t likely make an announcement like this without knowing, or at least being fairly certain, that approval is forthcoming, so it’s reasonable to expect that the government will hand down its decision before the end of next week. “We anticipate that all necessary regulatory approvals will be obtained by that date,” Kelly said in the release. “We look forward to that milestone day, first and foremost, so that we can begin the exciting work to integrate AirTran into Southwest.”
While no one expects the government to block the deal completely, it would not be entirely surprising if approval came with some catches. Continental was forced to give up gates at Newark when it merged with United, and it’s possible Southwest will have to forfeit slots at Baltimore, where both Southwest and AirTran have large operations. Chances are any such deals have already been made.
Once the deal closes, it will take roughly a year to obtain a single operating certificate from the FAA, and full integration of both carriers isn’t expected to finish until 2013.
Readers, do you think acquiring AirTran will be good for Southwest, or will it have a negative impact on the carrier?