Why Southwest's purchase of AirTran is good for the consumer
Southwest Airlines to Buy AirTran
Excerpt:
The deal promises to be transformational for Dallas-based Southwest, the largest U.S. carrier of domestic passengers, by providing access to the large Atlanta business-travel market for the first time, as well as potential expansion to smaller cities and international destinations.
"This absolutely changes things," said Gary Kelly, Southwest's chairman and chief executive, during a call with analysts.
The definitive agreement marks the first combination between major U.S. low-cost carriers.
Mr. Kelly said an enlarged Southwest would retain its distinct existing brand, 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," he said.
Comments:
- Whenever SouthWest enters a market, overall airfares decline. We saw this when SouthWest entered the Minneapolis St Paul marketplace. When NorthWest air dominated, the consumers suffered.
- The fees for checked bags really irritates people! Southwest has the bag police (if you have seen their recent commercials, they are funny!)
- SouthWest has a business model that is profitable. They trade under LUV
