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Southwest, AirTran deal to be approved, questions remain


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.” [2399 words]

Unlock the following content in this report:


  • Challenging conventional wisdom
  • Competitive Cost Comparison
  • Impact on fares
  • Post-merger considerations
  • Raising costs
  • Hybrid model
  • Opportunity knocking

Graphs and data:

  • Cost per Available Seat Mile (CASM), excluding fuel Adjusted to Southwest’s Average Stage Length
  • Average Discounts and Fares on Top 1,000 City-Pair Routes for Legacies and LCCs
  • Discounts on Top 1,000 City-Pair Routes Where Southwest and AirTrain are Low-Fare Carriers
  • Entry at Airports Where Southwest and AirTran Do and Do Not Compete (2006-2010)
  • Changes is Shares of Legacies and LCCs at Selected Airports (2006-2010)
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