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BREAKING: Southwest to Buy AirTran in Surprise Merger

In the first merger of major low-cost carriers, Southwest has agreed to buy AirTran for $1.4 billion.

The deal will expand Southwest’s service from many major cities currently served by AirTran, and open the door to Southwest’s first international service, as AirTran currently flies to destinations in the Caribbean and Mexico.

In a press release, Southwest laid out the benefits of the merger: “[The deal] offers Customers more low-fare destinations … including significant opportunities to and from Atlanta, the busiest airport in the U.S. and the largest domestic market we do not serve, as well as Washington, D.C., via Ronald Reagan National Airport. The acquisition also allows us to expand our presence in key markets, like New York LaGuardia, Boston Logan, and Baltimore/Washington. It presents us the opportunity to extend our service to many smaller domestic cities that we don’t serve today, and provides access to key near-international leisure markets in the Caribbean and Mexico.”

Once completed, the merged carrier will serve roughly 100 million people a year from 100 airports with 685 aircraft. It will fly under the Southwest name and colors. AirTran’s entire fleet is currently equipped with in-flight wireless access. AirTran also offers business class seating, unlike Southwest.

For now, little will change from a customer perspective. The two airlines will operate separately until the merger is closed, following the standard regulatory process.

Stay tuned for more details as they come.

Readers, do you think this is a good deal for Southwest? What about AirTran? Are you excited about the prospect of expanded Southwest service?

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