U.S. Justice Department approves Southwest's $1.4 billion acquisition of AirTran Airways

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U.S. Justice Department approves Southwest's $1.4 billion acquisition of AirTran Airways

2011-04-27 04:37:23 GMT+7 (ICT)

DALLAS, TEXAS (BNO NEWS) -- The U.S. Justice Department (DOJ) on Tuesday announced the approval of Southwest Airlines Co.'s acquisition of AirTran Airways.

The DOJ's Antitrust Division said that after a thorough investigation, it "determined that the merger is not likely to substantially lessen competition." 

The division also said that the presence of low cost carriers like Southwest and AirTran "has been shown to lower fares on routes previously served only by incumbent legacy carriers." 

Furthermore, it said the merged firm would be able to offer new service on routes that neither currently serves, including new connecting service through Atlanta's Hartfield Jackson International Airport from cities currently served by Southwest to cities currently served by AirTran. 

On September 27, 2010, Southwest Airlines announced that it entered into a definitive agreement to acquire all of the outstanding common stock of AirTran for $1.4 billion in a combination of cash and Southwest Airlines' common stock. The acquisition was then approved by AirTran stockholders on March 23.

In 2010, Southwest Airlines, which is based in Dallas, Texas had revenues of $12.1 billion carrying approximately 88 million passengers. Southwest serves 72 cities in the United States. Meanwhile, AirTran, which is based in Orlando, Florida, had revenues of $2.6 billion carrying approximately 25 million passengers in 2010, as it serves 69 cities in the United States, Mexico and the Caribbean.

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