If nothing else, mergers today give me an opportunity to come up with monikers for them.  While the merger between Southwest Airlines and Airtran is being described as an acquisition, it is a merger with the Southwest brand surviving.  And this is a pretty big bite for Southwest. 

Southwest has made purchases before but never one nearly so big.  Airtran is a pretty big airline and pretty successful too.  Let’s take a look at the questions we all have.

The Boeing 717:  I think SWA will keep this in fleet for a while anyway.  The airplane works well within the Airtran model and I think SWA has been searching for a smaller aircraft it could operate for a while now.  The 737-500 never really worked that well for them and the -600 just had too high operating costs to be worthy.  This aircraft gives SWA an opportunity to play with their mix a bit more and its easy to integrate into scheduling because there are enough for a pilot base and it doesn’t change their flight attendant mix on other aircraft.  I think this aircraft will stick around for  a while and I think that if SWA does get rid of them eventually, we’ll continue to see a smaller aircraft in the SWA fleet a la the 717.

Flying from DFW.  CEO Gary Kelly says the Wright Amendment prohibits them from flying from DFW and so the integrated airline will cease DFW operations.   I can find nothing that prohibits SWA from flying from both airports and if Airtran departs DFW, this is going to be a pretty big blow to consumers in the area.  Airtran provided so much needed competition on some routes from DFW and if those go away, I think we’ll see fares from American Airlines rise astronomically.  DFW needs to explore this with these two airlines.

Union integration:  I think this is going to be a bit tricky.  On the whole, the SWA pilot and flight attendant contracts are much better than the corresponding contracts at Airtran.  If the SWA unions are willing to integrate somewhat fairly,  perhaps this won’t be too much of a problem.  I think those unions will be a bit fussy about bringing over the Airtran crews and I wouldn’t be surprised to see them try to simply “staple” the Airtran lists to the bottom of the SWA seniority lists.  Gary Kelly needs to do more on behalf of Airtran employees in this area and perhaps he will.

Milwaukee:  I think we see routes shrink in this city and fares go up.  Airtran won over Milwaukee and that wasn’t easy to do.  I don’t know if Southwest will succeed as well as Airtran in that market and suddenly I wonder if Frontier doesn’t have an opportunity in this city.  They know how to hold their own with SWA.

Management teams:  Expect to see a few Airtran executives move over to SWA.  Expect most to depart.  Southwest is a pretty insular company but even more so when it comes to its executive corps.  I wouldn’t be surprised if some Airtran executives are working on their “flare” this morning.

International flying:  I think Southwest will maintain the existing Airtran international routes and I think they’ll awkwardly explore ways to expand it in the distant future.  To withdraw it all at this point would be a big loss.

Airtran’s Business Class:  Say Buh-Bye.  Southwest will dump this product quickly.  Southwest never sees the value of business class and I think this will potentially be a mistake.  Airtran’s business class is pretty nice and very attractively priced.  Retaining it even if just for some markets might not be a bad idea.  Think NYC – Washington, D.C. here.

I think this merger will happen and I think it will ultimately result in a stronger airline.  However, I think it will also be very awkardly executed.  SWA does things its own way and always has.  It always stubbornly clings to its own methods and madness and that works pretty well for them.  However, they are a big boy airline now and it wouldn’t hurt to start looking a little more closely at how their fellow competitors are doing things.  I’m not suggesting change for the sake of change.  I’m suggesting that Airtran figured out how to do pretty well with products that are pretty different from SWA.  Others have too.  It’s worth looking at the other guy’s success before you throw out the bathwater. 

Sadly, I think SWA won’t do this and I think SWA will have some labor problems and I think this will take longer and be more awkward than it has to.  I do think SWA is every bit capable of losing some of the advantages that buying Airtran brings.   Like losing a reservations system that knows how to do things like codeshares and international flights.   This is a risky deal for SWA.  One they can conclude and profit from but I think this will be harder to do than many seem to.

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