In the off chance you haven’t grown tired of the incessant airline merger buzz these days, I come to you today with something that’s actually, you know, news instead of rumor or speculation. Reuters reports that low-cost carrier AirTran has offered to buy rival airline Midwest for just a hair under $300 million.
According to the report, “AirTran said [merging with Midwest] would create a low-cost airline [and] … generate more than USD$60 million in estimated cost savings.”
OK, but let’s put this into context (yep, we’re back to the whole “rumor and speculation” part again). AirTran’s a relatively small fish in a pond that includes some pretty big sharks (metaphorically speaking, of course) like Delta, Northwest, Continental, US Airways, and obviously the two biggest of all, American and United—the latter of which seems to be attached in some way to just about every merger rumor under the sun.
On the other hand, AirTran has made a name for itself as a low-cost rival to Delta—both have hubs in Atlanta and are about as fond of each other as, say, the Red Sox and Scott Boras these days. Any move that strengthens a thorn in Delta’s side could complicate matters with Delta’s bankruptcy plan, perhaps making the US Airways merger more attractive in the eyes of some executives and creditors. Theoretically speaking.
This is not the first time AirTran has proposed a merger with Midwest, which previously rebuffed the offer. But in the current merger-frenzied climate, it seems safe to say that everything’s up for grabs. Expect the unexpected and all that.
In the meantime, I’ll keep my ear to the ground for the next twist in this ongoing saga.
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