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.
JetBlue Airways (New York-JFK) plans to continue growing its focus city at Boston’s Logan International Airport with new daily nonstop service to Newark, beginning in early May 2011. JetBlue will operate four daily flights to Newark’s Liberty International Airport, complementing its existing schedule of frequent daily flights between Boston and New York’s John F. Kennedy International Airport.
Copyright Photo: Dave Campbell. Airbus A320-232 N569JB (msn 2075) decorated in the special 10th Anniversary color scheme awaits its turn for takeoff from Fort Lauderdale/Hollywood.l
US Airways (Phoenix) announced it is adding more flights from more destinations to New York City, including new service from seven East Coast cities to New York’s LaGuardia Airport. Two of the cities receiving new air service, Hartford, CT. and Harrisburg, PA., currently do not have nonstop flights to LaGuardia on any other airline. In addition to the seven new markets, three additional cities are seeing an increase in round trips to LaGuardia.
The new and expanded service begins on October 31 and will be operated by US Airways Express partners Air Wisconsin, Chautauqua Airlines, Piedmont Airlines (2nd), PSA Airlines (2nd) and Republic Airlines (2nd). With these additions, US Airways increases its presence at LaGuardia to 194 peak-day departures to 34 airports.
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Copyright Photo: Dave Campbell. PSA Airlines’ (2nd) Bombardier CRJ700 N702PS (msn 10135) climbs away from Charlotte.
AeroMexico (Mexico City) announced the beginning of its new Monterrey–Miami service effective on June 28, and its new Monterrey–Houston route effective on July 5.
Schedules for these new routes to be served with 50-seat AeroMexico Connect Embraer jets are as follows: the Monterrey-Miami flight will leave at 10:15 a.m. (1015) and arrive at 2:15 p.m. (1415), while the Miami-Monterrey flight is scheduled for a 3:15 p.m. (1515) departure with a 5:15 p.m. (1715) arrival.
The new daily Monterrey-Houston flight will leave at 7:05 p.m. (1905) and arrive at 8:30 p.m. (2030), while the Houston to Monterrey flight is scheduled for a 9:30 p.m. (2130) departure with a 10:55 p.m. (2255) arrival.
Business travelers will also benefit from the airline’s new Monday through Friday flight scheduled to depart Monterrey at 6:25 a.m. (0625) to land in Houston at 7:50 a.m. (0750), and leave Houston at 8:45 a.m. (0845) to land in Monterrey at 10:10 a.m. (1010).
The airline has also included additional summer service between high-demand routes, such as Mexico City to Miami, New York, Orlando, and San Antonio, and on the Merida–Miami, Monterrey–San Antonio, Los Angeles–Aguascalientes, Los Angeles–Bajio (León), Chicago–Durango and the Chicago–Guadalajara routes.
Copyright Photo: Dave Campbell. Embraer ERJ 145LU XA-WLI (msn 145434) of AeroMexico Connect prepares to land at Miami on runway 9.
JetBlue Airways (New York) said yesterday afternoon (February 26) that its flights would resume after it had earlier voluntarily issued a systemwide temporary ground halt for all operations because of an information technology (IT) problem with its computers.
Flights restarted around 3:45 p.m. (1545) Eastern time after all flights were halted about an hour earlier.
The company was already flying a reduced schedule on Friday due to a large snowstorm in the Northeast United States.
Copyright Photo: Dave Campbell. Airbus A320-232 N569JB (msn 2075) wearing the special 10th Anniversary scheme prepares for departure from Fort Lauderdale/Hollywood.
PSA Airlines (2nd) (US Airways Express) (Dayton) will start flying the Melbourne, FL-Charlotte route (three roundtrips daily) for its parent US Airways starting on February 11, 2010. This marks the return of US Airways to the Melbourne area.
Copyright Photo: Dave Campbell.
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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: