Southwest to expand its presence with AirTran buy

SOUTHWEST Airlines is to purchase AirTran Holdings for $1.04bn (£656m) in cash and stock in a deal that will allow Southwest to expand its presence in major East Coast US markets.

The merger, announced yesterday, is the first among leading low-cost US airlines and the second notable deal this year after United Airlines and Continental Airlines. Delta Air Lines bought Northwest Airlines in 2008.

“The acquisition of AirTran represents a unique opportunity to grow Southwest Airlines’ presence in key markets we don’t yet serve and takes a significant step toward positioning us for future growth,” said Southwest chief executive Gary Kelly.

He also said the deal with Atlanta-based AirTran would allow Southwest to expand in markets such as New York LaGuardia, Boston Logan, and Baltimore/Washington.

It also allows the airline access to leisure markets in the Caribbean and Mexico.