Southwest, AirTran deal to be approved, questions remain

Premium Analysis

Based on Department of Justice statements in past US airline mergers, the proposed Southwest acquisition of AirTran - the first merger between US low-cost carriers - will likely gain approval, according to a new White Paper published by the American Antitrust Institute. What is interesting is the fact the report revealed that Southwest, by acquiring AirTran, is eliminating its most aggressive pricing competitor, as well as the competitor that is more aggressive at entering new markets. Signaling the importance of AirTran to competition, the report cautioned against “excessive reliance on Southwest as the ever-present LCC to help justify larger legacy mergers.”

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