What does a SWA merger mean to Midway?

September 28, 2010 4:45:24 AM PDT
Southwest Airlines plans to buy competitor AirTran, which would create a powerhouse in low-cost air travel.

Southwest will expand through cities like New York, Boston and Atlanta, which is the nation's busiest airport hub in the country, under the deal. But it already has hundreds of daily flights out of Chicago's Midway Airport. Experts say the $1.4 billion merger would mean more choices for low cost air travelers, including service to Mexico and the Caribbean.

While both airlines say joining forces will spread the low fares farther, there is concern among industry experts that fares will go up. However, many doubt Southwest will change it's popular business model.

Both Southwest Airlines and AirTran have reputations of good service. Industry experts say that makes them a good fit.

"The airline is supposed to be a service business. Some airlines seem to forget. Southwest has never forgotten it," said Aaron Gellman, Kellogg School of Business. "AirTran has that same thing, and I think that's where it starts."

Buying AirTran will give southwest a bigger slice of markets that are popular with the business traveler including Atlanta, Boston and New York.

"I'm excited about Southwest going into the Atlanta market and the other markets that AirTran serves," said Alan Oremus, Southwest.

Many Southwest passengers say they don't mind if the airline gets bigger as long as it doesn't change its business model, which includes low fares, good customer service and no baggage fees.

"Bags fly free. That's a big deal. It's a big deal. That's why a lot of people fly them," said Al Rashkow

Free bags are a big deal because of it, Southwest as taken away customers from the major carriers while AirTran does charge for bags, southwest customers doubt the airline will change it's current policy or philosophy.

"I think it's really entrenched in their philosophy as a company, and so I think that as they get bigger, they will just spread it around more," said Kathy Turnowcheyk.

Loyal AirTran customers are not exactly flying high with the news of a merger.

"I've never had a problem with flying AirTran. I mean, the customer service is great. I flew Southwest once and lost my luggage," said Rodney Ellis.

"I'm very happy with AirTran. I hope Southwest doesn't mess it up," said Herbert Hartman.

If approved by regulators, the merger will create an airline that will service 100 million passengers annually in nearly 100 airports.

Industry experts say it will probably take about two years for the two airlines to be fully integrated. Many say the big loser in the merger is Delta Airlines, which has a major hub in Atlanta. The move will put Southwest in head-to-head competition with Delta Air Lines in Delta's home base of Atlanta.


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