AirTran Airways Boeing 717-2BD N949AT (msn 55003) (Orlando Magic) FLL (Dave Campbell), originally uploaded by Airliners Gallery.
Southwest Airlines (Dallas) announced today (September 27) that it has entered into a definitive agreement to acquire all of the outstanding common stock of AirTran Holdings, Inc. (Orlando), the parent company of AirTran Airways (Orlando), for a combination of cash and Southwest Airlines’ common stock.
At Southwest Airlines’ closing stock price of $12.28 on September 24, 2010, the transaction values AirTran common stock at $7.69 per share, or approximately $1.4 billion in the aggregate, including AirTran’s outstanding convertible notes. This represents a premium of 69 percent over the September 24, 2010 closing price of AirTran stock. Under the agreement, each share of AirTran common stock will be exchanged for $3.75 in cash and 0.321 shares of Southwest Airlines’ common stock, subject to certain adjustments, based on Southwest Airlines’ share price prior to closing. Including the existing AirTran net indebtedness and capitalized aircraft operating leases, the transaction value is approximately $3.4 billion.
The agreement has been unanimously approved by the boards of directors of each company, and closing is subject to the approval of AirTran stockholders, receipt of certain regulatory clearances, and fulfillment of customary closing conditions.
The acquisition will significantly expand Southwest Airlines’ low-fare service to many more Customers in many more domestic markets (especially the mega hub at Atlanta), creating hundreds of additional low-fare itineraries for the traveling public. Moreover, the expansion of low fares should generate hundreds of millions in annual savings to consumers. Based on an economic analysis by Campbell-Hill Aviation Group, LLP*, Southwest Airlines’ more expansive low-fare service at Atlanta, alone, has the potential to stimulate over two million new passengers and over $200 million in consumer savings, annually. These savings would be created from the new low-fare competition that Southwest Airlines would be able to provide as a result of the acquisition, expanding the well-known “Southwest Effect’” of reducing fares and stimulating new passenger traffic wherever it flies.
AirTran revenues and operating income, excluding special items, for the twelve months ending June 30, 2010, were $2.5 billion and $128 million, respectively. Southwest Airlines revenues and operating income, excluding special items, for the twelve months ending June 30, 2010, were $11.2 billion and $843 million, respectively. The proposed transaction, including the anticipated benefit of net synergies, but excluding the impact of one-time acquisition and integration costs, is expected to be accretive to Southwest Airlines pro forma fully-diluted earnings per share in the first year after the close of the transaction and strongly accretive thereafter. Net annual synergies are expected to exceed $400 million by 2013. One-time costs related to the acquisition and integration of AirTran are expected to be in the range of $300 million to $500 million.
As of June 30, 2010, the combined unrestricted cash and short-term investments of the two companies was $3.7 billion. Southwest Airlines intends to fund approximately $670 million in cash consideration for the transaction out of cash on hand. Since June 30, Southwest’s cash and short-term investments balance has increased from $3.1 billion to $3.3 billion. In addition, Southwest Airlines has a fully available, unsecured revolving credit facility of $600 million.
Based on current operations, the combined organization would have nearly 43,000 Employees and serve more than 100 million Customers annually from more than 100 different airports in the U.S. and near-international destinations. In addition, the combined carriers’ all-Boeing fleet consisting of 685 active aircraft would include 401 Boeing 737-700s, 173 Boeing 737-300s, 25 Boeing 737-500s, and 86 Boeing 717s, with an average age of approximately 10 years, one of the youngest fleets in the industry. Southwest Airlines also announced, previously, that it is evaluating the opportunity to introduce the Boeing 737-800 into its domestic network to complement its current fleet, providing opportunities for longer-haul flying and service to high-demand, slot-controlled, or gate-restricted markets. This acquisition supports Southwest Airlines’ evaluation of the Boeing 737-800.
Until closing, Southwest Airlines and AirTran will continue to operate as independent companies. After closing, Bob Fornaro will continue to be involved in the integration of the two companies. Southwest Airlines plans to integrate AirTran into the Southwest Airlines Brand by transitioning the AirTran fleet to the Southwest Airlines livery, developing a consistent Customer Experience, and consolidating corporate functions into its Dallas headquarters. Subject to receipt of necessary approvals, Southwest Airlines’ integration plans include transitioning the operations of the two carriers to a Single Operating Certificate. Plans for existing AirTran facilities will be developed by integration teams and decisions will be announced at appropriate times. The carriers’ frequent-flyer programs will be combined over time, as well.
Copyright Photo: Dave Campbell. Southwest Airlines will become a new operator of the Boeing 717. Both companies are very supportive of logojets and special promotions. 717-2BD N949AT (msn 55003) in the Orlando Magic motif taxies to the runway at Fort Lauderdale/Hollywood.
AirTran Airways Boeing 717-2BD N895AT (msn 55047) MIA (Bruce Drum), originally uploaded by Airliners Gallery.
AirTran Airways (Orlando) will drop the Atlanta-Miami route on October 7.
Copyright Photo: Bruce Drum. Boeing 717-2BD N895AT (msn 55047) taxies to the gate at MIA.
AirTran Holdings, Inc. (Orlando) the parent company of AirTran Airways, Inc., reported a net profit of $12.4 million or $0.09 per diluted share for the second quarter of 2010. Excluding $26.4 million in unrealized losses, net of taxes, related to the reduction in value of future fuel hedges, the Company’s net income for the quarter would have been $38.8 million dollars or $0.23 per diluted share. This result is particularly noteworthy given the 37.2 percent increase in the per-gallon cost of jet fuel, the airline’s single largest expense, year-over-year.
AirTran set quarterly records for revenue passenger miles flown, load factor and enplaned passengers. For the first time in AirTran Airways’ history, load factor topped 83 percent in the second quarter.
Copyright Photo: Norbert G. Raith. Boeing 717-2BD N949AT (msn 55003) painted in the Orlando Magic scheme, arrives at the ATL hub.
AirTran Airways Boeing 717-2BD N892AT (msn 55044) MIA (Bruce Drum), originally uploaded by Airliners Gallery.
AirTran Airways (Orlando) yesterday (May 29) began new nonstop service between Wichita Mid-Continent Airport in Wichita, KS, and Orlando International Airport. The airline will offer a Saturday nonstop flight between the two cities.
Copyright Photo: Bruce Drum. Boeing 717-2BD N892AT (msn 55044) prepares for takeoff at Miami.
AirTran Airways Boeing 717-2BD N895AT (msn 55047) MIA (Bruce Drum), originally uploaded by Airliners Gallery.
AirTran Holdings, Inc. (Orlando), the parent company of AirTran Airways, Inc., reported a net loss of $12.0 million or $0.09 per diluted share for the first quarter of 2010. Excluding $4.7 million in unrealized gains on future fuel hedges, the Company’s net loss for the quarter would have been $16.7 million dollars or $0.12 per diluted share. The impact of historic winter snowstorms along the Eastern Seaboard and more than a 50 percent increase in fuel expenses offset record total revenues for the first quarter.
AirTran Airways experienced significant revenue improvement that accelerated through the quarter with total unit revenues increasing by a solid double-digit margin year-over-year in March.
The Company posted record first quarter total revenues of $605.1 million on a record load factor of 77.2 percent. Operating costs increased 21.8 percent or $107.8 million as compared to the same period last year. Fuel was the single largest contributor to the cost increase, accounting for over 60 percent or $67.3 million of the increase. Last year, crude oil averaged $41 per barrel in the first quarter but has risen to $78 this year. Winter storms further pressured unit costs due to reduced capacity and additional expenses related to extreme weather during the quarter.
Copyright Photo: Bruce Drum. Boeing 717-2BD N895AT (msn 55047) taxies to the gate at Miami.
AirTran Airways (Orlando and Atlanta) despite a rare snowstorm in Atlanta, yesterday (February 12) celebrated Little Debbie’s 50th anniversary by launching a one-of-a-kind, custom-designed Boeing 717-2BD N950AT (msn 55012), dubbed Little Debbie 1. Flight FL 931, the inaugural flight, departed from Hartsfield-Jackson Atlanta International Airport yesterday at 12:24 p.m. to Jacksonville.
As part of the 50th anniversary, AirTran Airways and Little Debbie are giving away 50 vacation packages in conjunction with The Great American Getaway sweepstakes. Each vacation package includes roundtrip airfare for two to anywhere AirTran flies in the continental United States, two nights at a Holiday Inn hotel, rental car for two days and a $200 cash card. Sweepstakes ends May 31, 2010. For more details and the chance to win, visit www.littledebbie.com. AirTran is also offering $10 vouchers toward travel on Little Debbie packaging during this promotion period.
In addition to The Great American Getaway, AirTran Airways and Little Debbie will announce the winner of the Little Debbie Look-A-Like Contest at the AirTran Airways Atlanta maintenance hangar. The 10 finalists will help unveil Little Debbie 1, and the winner will be chosen by a panel of judges. The winner will receive a $5,000 scholarship and other prizes.
McKee Foods, a family bakery with annual sales of more than $1 billion, is a privately held company based in Collegedale, TN. The McKee story began during the height of the Great Depression when founder O.D. McKee began selling 5–cent snack cakes from the back of his car. Soon after, he and his wife, Ruth, bought a small, failing bakery, using the family car as collateral. Today, the company employs more than 6,000 people in Collegedale; Gentry, Ark.; and Stuarts Draft, VA. The company creates and bakes Little Debbie Snacks, Sunbelt Snacks & Cereals, Heartland and Fieldstone Bakery food products. Visit mckeefoods.com for more information.
Editor’s Note: From a public relations standpoint, yesterday (February 12) was a nightmare day for any airline PR event as 49 of the 50 U.S. states had measurable snow on the ground (Hawaii had none) along with thousands of airline cancellations nationwide, not to mention the opening day ceremonies of the Vancouver Winter Olympics (which can use some snow!).
AirTran Airways (Orlando and Atlanta) sensing a weakness with the Midwest Airlines brand will make Milwaukee a hub next year, basing aircraft and crews at MKE. The company will add additional routes according to this news item.
AirTran Airways (Orlando and Atlanta) yesterday (December 19) launched weekly Atlanta-Aruba flights. Orlando-Aruba commences on January 9.
Copyright Photo: Tony Storck. Boeing 717-2BD N891AT (msn 55043) in the Atlanta Falcons motif arrives at Baltimore/Washington.
AirTran Airways (Orlando and Atlanta) yesterday (December 15) while the world was watching the Boeing 787 first flight, introduced its latest Boeing 717-200 logojet, this one for the Orlando Magic of the National Basketball Association (NBA). Dubbed “Magic 1″ the specially-painted 717-2BD, registered N949AT (msn 55003), was introduced at Orlando.
AirTran Airways (Orlando and Atlanta) will start weekend only nonstop service between Des Moines and Orlando starting on March 6, 2010 with Boeing 717s.
Copyright Photo: bwione.
A now rare shot of AirTran’s Boeing 717-2BD N971AT (msn 55032) with the image of race car driver (and model) Danica Patrick landing on runway 33L at Baltimore/Washington (BWI). Note the “AirTranica” special titles (now gone).
AirTran Airways (Orlando and Atlanta) has placed Boeing 717-2BD N946AT (msn 55009) into revenue service. The airliner is painted in the Baltimore Ravens (NFL football team) special motif as we previously first reported. It is pictured arriving at Baltimore/Washington in this nice view.
Copyright Photo: Tony Storck.
Please see our previous post for the early photos.
AirTran Airways (Orlando and Atlanta) will soon officially unveil the latest NFL logojet, this one is for the Baltimore Ravens, just painted at Miami. The next will be for the Indianapolis Colts.
AirTran Airways (Orlando and Atlanta) yesterday (October 13) officially unveiled the Atlanta Falcons logojet dubbed “Falcon 1″. AirTran intends to also paint logojets for the Baltimore Ravens and the Indianapolis Colts also of the NFL. Ironically AirTran does not fly the football team (its planes are too small). Instead the Atlanta Falcons charter larger aircraft from Delta Air Lines!
AirTran Airways (Orlando and Atlanta) will drop Charleston, SC and the ATL-CHS route on December 3.
The company, as promised, also introduced the anticipated Atlanta Falcons (NFL) team logojet. Boeing 717-2BD N891AT (msn 55043) has been painted in the team colors.
AirTran Airways (Orlando and Atlanta) will increase the number of flights to Florida starting December 17 for the winter season. Daily flights will be added to a combination of Orlando and Ft. Myers, from Boston, Pittsburgh, Chicago (Midway), and Columbus, OH.
Press release with details:
AirTran Airways (Orlando and Atlanta) will add new service to Allentown/Bethlehem/Easton (Lehigh Valley) (ABE), its 62nd destination, on June 25 with nonstop service to both Orlando and Fort Lauderdale/Hollywood.