Southwest Airlines is buying AirTran

Southwest Airlines is the biggest discount airline in the United States, and with the acquisition of AirTran, they'll be able to expand their presence in key markets like New York LaGuardia, Boston Logan, andBaltimore/Washington.

And, Southwest will now have access to Atlanta, a market that the airline currently does not already serve. In respect to size and airport access, the deal is a transformative one for Southwest.

The deal will be transacted in a mix of cash and stock. But one thing is clear, the mix of the two brands will be a tricky one.

Southwest's reputation and brand are so clear, and effective, we certainly hope they'll use AirTran for their routes and planes, and keep their brand positioning as a customer-centric airline well enough alone.

Southwest promises to retain its distinct existing brand--including avoiding bag fees and offering a single-class service. "This fits in beautifully with the strategy we've laid out, probably for the next decade," Gary Kelly, Southwest's chairman and chief executive officer said.

This could have a significant affect on AirTran employees who will need to join the Southwest-Way or jump on the proverbial emergency evacuation slide and leave the airline.

Source: WSJ.com and  NYT's Dealbook

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