What Does Southwest Buying Air-Tran Mean For Consumers?

So, what are the consumer repercussions of the surprise acquisition of AirTran by fellow low-fare airline Southwest? Airfarewatchdog‘s George Hobica is worried that fewer competitors, especially at this price point, will mean that Southwest and other airlines will have less pressure to keep fares low. He also expects more mergers on the horizon.

Hobica tells Consumerist, “This is truly a shocker, and it can only mean further consolidation. I don’t think anyone really saw this coming. More than any recent merger, it spells bad news for low fares, since both airlines were leaders in the the low fare space and had frequent, almost weekly, sales. I can only imagine that now pressure is on for American to find a partner, and also US Airways, and that will lead to even less fare competition.”

Consumers usually benefit when there are more suppliers competing for their business. The question is whether the embiggened airlines will use their new positions to leverage efficiencies across the network, or to raise prices. And is it more better for travelers to have two low-cost carriers fighting each other, or to have one a more powerful low-cost carrier able to go more toe-to-toe with the bigger legacy airlines?

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  1. FatLynn says:

    One of the problems with this merger, IMO, is that both airlines are point-to-point, rather than hub-and-spoke, so they already serve many of the same cities*. Rather than combining airlines to offer more routes, they are just going to offer more flights on each route, which certainly does allow them not to compete on price.

    *ATL is a notable exception.

    • Franklin Comes Alive! says:

      You make a decent point, but your asterisked note of ATL is probably at least 2/3 of the reason Southwest wants to do this.

      • FatLynn says:

        Fair. I’m assuming they have been unable to get gates/landing times there otherwise.

      • Veeber says:

        Not just ATL. NYC has limited slots at all their airports for flights. The merger transfers those slots to Southwest, which means they can have more flights in and out. I think Dallas is screwed though since Southwest can’t operate out of there.

        • GearheadGeek says:

          Can’t operate out of Dallas? What?

          You mean that they don’t use DFW, using the downtown airport called Love Field instead? There may still be some route restrictions from there, but they certainly have a lot of flights into/out of Dallas.

          • Veeber says:

            Sorry should have been more specific. Southwest can’t operate out of DFW. So once the merger’s complete Airtran/Southwest will have to pull from DFW.

    • OrtizDupri says:

      Air-Tran flies out of Reagan National in DC – Southwest only flies out of Dulles or BWI. If I do fly Southwest (up to upstate NY to visit family, mostly), hopefully I’ll be able to do it from the airport around the corner as opposed to an hour and a half away. That’s the only reason I’m looking forward to this.

      • alissaaa says:

        But Airtran also has a large presence at BWI along with Southwest (I believe Southwest is #1 and Airtran is #2 @BWI.) . For some routes, BWI-BOS comes to mind, this means less competition and possibly higher fares.

      • pecan 3.14159265 says:

        I think this gives Southwest an edge when it comes to Reagan Naitonal because Southwest was battling JetBlue for tarmac space at Reagan National. Now that Southwest owns AirTran, it essentially inherited that tarmac space without having to fight JetBlue. It may still try to get the tarmac space JetBlue wants, but if it doesn’t succeed, at least it still has AirTran.

      • baconsnake says:

        AirTran flies out of BWI also. I fare-shop both whenever I need to travel.

    • ptkdude says:

      I found it interesting that on the merger website, Southwest repeatedly mentions Atlanta as where they would be able to gain service as a result of the merger, and they specifically mention no other cities. It almost reads as though they are buying Airtran solely to get access to Atlanta.

      I’m also curious to see what will happen with baggage fees at Delta, since Southwest specifically states they expect to eliminate Airtran’s baggage fees.

    • sth9669 says:

      As is DC, I mean I know Baltimore is in the region, but BWI is quite a hike from were I live, and it’s much easier to take the metro to Reagan. . . . Hopefully they’ll keep the fares low and the fees non-existant and just expand to more airport offerings and I’ll be happy!

  2. Loias supports harsher punishments against corporations says:

    Embiggened? Why, that’s a perfectly cromulent word.

    • fs2k2isfun says:

      “A noble spirit embiggens the smallest man”.
      - The Simpsons

    • Conformist138 says:

      “And is it more better for travelers to have two low-cost carriers fighting each other, or to have one a more powerful low-cost carrier able to go more toe-to-toe with the bigger legacy airlines?”

      Picky, I know, but “more better”?? *Rolls up newspaper* Bad Ben, bad!

  3. SiD says:

    This will put pressure on the Legacy carriers for sure as Southwest will be a strong presence on the East coast. With Delta acquiring NWA, Continental and UA merging, these are the times of super carriers. Southwest had to make an acquisiting since it failed to buy Frontier.

  4. Tim says:

    Yes, consolidation almost always means less competition, so higher prices for consumers. SouthTran will likely still be the cheapest option for most of the routes it flies, but prices will definitely go up.

    I could also see ALL airfare prices (at least the ones on SouthTran routes) rising because of this. If the bottom of the market rises, I’d bet that the rest of it does too (something about higher tide, boats. etc.).

    • fs2k2isfun says:

      Out of my city, Southwest is never the cheapest. I was buying tickets home for Thanksgiving last night and Soutwest was at least $100 more than the other 2 airlines in my home town. Even driving 150 miles to the next bigger airport Southwest was still far more expensive.

  5. Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

    I can only hope it brings southwest to more cities, with its no baggage fee policies and reasonable fares. Airtran goes to some of those cities SW doesn’t serve…

    • HogwartsProfessor says:

      My city! Please!

      I have to drive three hours to get to an airport they service. It’s not worth it. It’s too far, I can’t take a cab and leave my car at home, and security at the large airports is a nightmare (I’m talking to YOU, Lambert St. Louis!). They built a brand new airport here specifically for expansion purposes because the old one was kind of landlocked and had no room to grow. I’m hoping that it does come. I’ve been hoping since the new airport opened.

  6. Rocket says:

    OMG that plane is gunna be eaten by a dog! Watch out!

    • hotdogsunrise says:

      Love this picture. I wish the dog’s head was a little bit more toward the plane, as it also gives the impression that the plane is going to crash into the dog.

    • ARP says:

      I’m a geek, so I thought of the scene in Empire Strikes Back with the worm and the asteroid.

  7. smo0 says:

    Southwest has never been the cheapest for me. I fly Virgin when I can… but as of late, I’ve tried to avoid flying as much as possible.
    My last trip to Cali, I drove. Worth it, imo.

    • There's room to move as a fry cook says:

      Oranges and apples.
      Virgin America only flies selected high traffic routes between 11 US cites.
      Southwest serves 65 US cities with a web of connections & 3,200 departures/day. There’s a better chance that SW will get you where you want to go.

    • jesirose says:

      Where was the other end of the line?

      I’ve driven TX to CA (22 hours one way, it took us 24 the other b/c we stopped for real meals). I’d do it again over flying any day. We’re planning another 24 hour drive to the other side of the country for Christmas. It’s obviously easier when you have two or more people, and don’t mind sleeping in a car for a few hours.

    • Brad Ackerman says:

      Southwest wins on not nickeling-and-diming, more comfortable seats on the airplane, and better gate area seating than any Red Carpet Club I’ve been in. The only loss is open boarding, but it’s much less sucky.

      Being cheaper than the competition is just an extra bonus; I’d happily pay $100 more over most carriers ($200 more if you’re comparing Southwest to Allegiant or Spirit).

    • Brad Ackerman says:

      Southwest wins on not nickeling-and-diming, more comfortable seats on the airplane, and better gate area seating than any Red Carpet Club I’ve been in. The only loss is open boarding, but it’s much less sucky now that pax get a numeric position rather than just a boarding group.

      Being cheaper than the competition is just an extra bonus; I’d happily pay $100 more over most carriers ($200 more if you’re comparing Southwest to Allegiant or Spirit).

  8. Sword_Chucks says:

    I actually hope this as a potentially good thing to expand southwest’s service into atlanta, which would be MUCH appreciated. I hope that southwest stands by its promises and advertising saying how their airline isn’t joining in the trends with bags and fees EVERYWHERE, like tmobile is doing. It will help them stand out as a better airline by not increasing prices, increasing destinations through the acquisition, and not changing their fee free zones

  9. TheDudeOC says:

    I don’t foresee Southwest raising fares. They have always been the cheap, no frills airline. Great for short flights (3 hours max). I think this just solidifies Southwest’s hold on the domestic market, especially as we continue to see other airlines charge for standard services.

    • fair_and_balanced says:

      Southwest is not cheaper than anyone.
      I always find cheaper fairs on Airtran, American, United, Continental, basically everyone.
      And they have that horrible no assignments for seats which makes getting seats very stressful.

      • MrEvil says:

        I love the no assigned seating because I’m well above average height so I need to sit in either the front row or exit to avoid my knees jammed into the seat back in front of me. Then again when I fly Southwest I usually always pay for a premium ticket which puts me in the A boarding group so I get first dibs on a seat.

      • MrEvil says:

        Depends on where you’re flying to. If you’re flying to or from an airport that’s well off the beaten path say….Amarillo TX, southwest is by far the cheapest option. $200 from Austin to Amarillo as opposed to $400-500 one way from the other two airlines that serve AMA.

  10. TheMonkeyKing says:

    From AirTran’s website:
    “Completion of the transaction, which will require both regulatory and shareholder approvals, is expected to close by the first half of 2011. Commercial and operating integration is slated to culminate in 2012, with both carriers operating under Southwest Airlines’ Federal Aviation Administration operating certificate in Dallas.”

    We’ll see the effects starting June of net year, if everything goes through. I’ll probably see less flights out of RDU to Atlanta because both go there. Southwest will most likely continue to MSY (picking up the AirTran route.)

  11. PeteyNice says:

    I really don’t see this as a net-positive for Atlanta based travelers. AirTran already acts as an effective check on legacy prices. I primarily fly to NYC and LA – when AirTran has a sale the price is instantly matched by Delta, Continental and American (to NYC) and Delta (to LA). Having Southwest around won’t change that.

    It will be interesting to see if they intend to keep Atlanta as a real hub or if they scale it back. This will be especially tricky with AirTran’s Boeing 717s leases expiring. If Southwest is committed to Atlanta has a major hub it will be a push – trading one LCC for another. If not it is a negative.

    I think Delta is pretty happy today since there is one less LCC they have to worry about coming to Atlanta.

  12. ZeGoggles says:

    It means finally being able to use Southwest from DC. IAD doesn’t count.. they have very very very few flights out of IAD.

  13. ChoralScholar says:

    What’s Southwest going to do with all those non-737 aircraft?!?

    Seriously, though, that’s an important part of Southwest’s business model – low maintenance costs because they fly only one type of aircraft.

    • wetrat says:

      The 717 has very low maintenance costs, so I imagine they’ll be very happy to have them.

    • hbkawachi says:

      This will open the door for Southwest to serve many cities that are too small for their 737 aircraft as their smallest 737 seats 20 more than AirTran’s 717′s.

  14. cromartie says:

    It means we consumers who enjoyed flying airTran are S.O.L., unless JetBlue comes in to fill the vacuum.

    • cromartie says:

      Over time, here’s what it will mean.

      The 717s, a very underrated plane from a flyer perspective, will be sold off and phased out, because Southwest will not want to maintain the expense of a second plane (that is no longer manufactured by Boeing) Which is a pity.

      Cities in which the currently separate Southwest and airTran serve from different airports will be consolidated into one airport. A combined company will not, for example, continue to serve both CAK and CLE, they most likely will consolidate into CLE.

      If I were a smaller airport currently serviced by airTran, such as Bloomington/Normal, Dayton, Pensacola, Huntsville, or Portland, ME, I’d be very concerned about future service.

      If I were an airTran employee at a small/medium sized airport also served by Southwest (Des Moines, San Antonio and Kansas City, for example) I’d bust out the old resume and head for the exit.

      I’d consider doing the same if I were working at airTran’s Atlanta hub, as there is no way that stays the same size as it is currently. Ditto for BWI or Milwaukee or Orlando.

      If I’m a regional airport that relies heavily on airTran (again referencing CAK, but I’m sure there are others), I pick up the phone and make very nice with JetBlue. Maybe buy the folks at Frontier a nice lunch or two, ASAP.

      It means we’re that much closer to the end of ‘affordable for the average person’ business class, as Southwest will phase that terrific part of flying airTran out. It means a decline in two things I’ve found airTran (with a few exceptions *ahem* Hobby Airport staff *ahem*) was very good at, customer service and attention to detail on plane safety (in the post ValueJet era, anyway).

      It means a continuation of the trend across multiple industries into two camps: the herd camp for the proletariat and the luxury camp for those who can afford it.

      And it means some degree of higher prices.

      Not a positive development.

      • There's room to move as a fry cook says:

        The biggest impact will be on Delta. They will have shape up & switch from little regional jets to bigger airplnes on competing routes.

      • wetrat says:

        From the FAQ on the merger website:

        ” Q: Do you plan to keep AirTran’s Boeing 717s?

        A: We will continue to operate the Boeing 717, which we intend to transition to the Southwest livery over time.
        Q: This is a deviation from your single-fleet strategy. Will that impact efficiency?

        A: With a fleet of 86 Boeing 717s, the fleet is large enough to schedule efficiently. We are excited about the possibilities of scheduling a slightly smaller gauge aircraft. We believe the 717 will allow us to better match seasonal demand without necessarily changing frequency in a market. In addition, the 717 will allow us to consider markets and cities that historically have been considered too small for Southwest service.”

        • cromartie says:

          No offense, but I’ve read this song and dance with previous mergers. Message me in 2014 and we’ll see whether that comes to pass.

  15. soxfantoo says:

    I fly the Baltimore to Boston route frequently.

    After the merger…
    1. I won’t be able to book a reserved seat.
    2. Won’t be able to fly standby on day of departure at no additional charge.
    3. lose the ability to upgrade Business Class
    4. Will probably see fares rise due to reduced competition

    As a frequent flyer on Air Tran, I see no personal benefit to the acquisition.

    • cromartie says:

      CAK to Boston. Same here.

    • fair_and_balanced says:

      Airtran has the cheapest prices, xm radio, internet, and assigned seats.
      Southwest is a huge downgrade to making customers happy.

      I hate flying southwest. For some reason the grossly obese people board last and always get stuck taking the middle seat. They stick out into your seat and touch you the entire flight, but no one kicks them off the plane.

      On every airline where there are assigned seats I have never been seated next to a insanely obese person, I guess they never select the middle seat on normal airlines.

  16. There's room to move as a fry cook says:

    Southwest’s new website about the purchase:
    http://www.lowfaresfarther.com/

    “Learn More About the Deal
    Here’s the deal
    Here’s what it means”

    What does Southwest want with a Starship?

  17. majortom1981 says:

    YAY this will give southwest a place at MIAMI before the farthest south was fort lauderdale. YAY

  18. majortom1981 says:

    YAY this will give southwest a place at MIAMI before the farthest south was fort lauderdale. YAY

  19. carsinamerica says:

    Count me as pleased. A purchase of AirTran means SWA service to Grand Rapids, MI, which opens the second-largest (and growing) city in Michigan and its environs.

    • fair_and_balanced says:

      Don’t be so happy.
      Airtran has cheaper prices, xm radio, internet, and assigned seats.
      You will lose all of that.

  20. fair_and_balanced says:

    This is horrible.
    Airtran is the best airline. Cheapest/XM radio/internet/assigned seats – No one comes close.

    Southwest will hurt airtran with the expensive southwest prices/no xm radio/no assigned seats/no internet.
    This is horrible. Southwest management is horrible and airtrans knows how to make customers happy.

  21. pot_roast says:

    I’m near DFW and while Southwest is based at DAL (Love Field) this means that folks at DFW are screwed. Southwest announced that they were not going to continue flying out of DFW and would close that station. So much for useful connecting flights.
    Southwest is still hamstrung out of Love Field because of that ridiculous Wright Amendment (Democrat Jim Wright) too.
    They will almost certainly eliminate AirTran’s business class. With the elimination of AirTran, Southwest’s fares might not stay so low. While they don’t charge bag fees, their fares are often higher than those of AirTran.

    I still think this was basically a big F U to Republic, who bought out Midwest and Frontier. AirTran wanted to buy Midwest, and Southwest wanted to buy Frontier.

  22. SynMonger says:

    Funny how deregulation killed off competition. Seems counter-intuitive.

  23. Brian Cooks says:

    Well it means I won’t be flying airtran anymore unless they keep their cheap business class upgrades.

  24. jp7570-1 says:

    And now, time for the old tired corporate lies. . . . . .

    “This merger means new synergies for our customers” (i.e. higher prices).
    “We are combining our strengths and will not layoff anyone” (i.e. expect massive layoffs)
    “A bigger Southwest Airlines is good for travelers” (i.e. fewer choices)
    “This allows us to be more competitive” (i.e. fewer scheduled flights and higher prices)