Government Approves Southwest/AirTran Merger

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All that’s left is to cross the Ts and dot the Is.

The Department of Justice (DOJ) approved Southwest’s acquisition of AirTran, setting the stage for a May 2 close, as Southwest indicated last week. The DOJ elaborated on its decision in a release:

After a thorough investigation, the division determined that the merger is not likely to substantially lessen competition.  The merged firm will be able to offer new service on routes that neither serves today, including new connecting service through Atlanta’s Hartsfield Jackson International Airport from cities currently served by Southwest to cities currently served by AirTran.  The division 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. 

Although there are overlaps on certain nonstop routes, the division did not challenge the acquisition after considering the consumer benefits from the new service.  Also, the airports affected by the overlaps are not subject to restrictions on slots or gate availability.  Where such restrictions exist, entry by other airlines may be particularly difficult.

So, approval without any additional requirements or restrictions. That’s a big win for Southwest, though not an altogether surprising one.

In its own release, Southwest said, “Upon closing, Southwest will turn its efforts to welcoming its new colleagues and integrating AirTran’s operations. Next steps also include beginning work on securing a Single Operating Certificate (SOC) from the Federal Aviation Administration, which is currently projected for completion in the first quarter of 2012.”

With DOJ approval out of the way, it’s full speed ahead to Monday.

Readers, will a bigger Southwest be better?