The $1.4 billion acquisition of AirTran Airways by Southwest Airlines, announced on September 27, is likely to mean a bump in fares for meeting travelers. What’s uncertain is if the merged carrier will have a discount program for meetings.
AirTran has a meetings program, called EventSavers, which offers participating meeting groups a 10 percent discount. Southwest does not have a meetings program but offers discounts for groups traveling from the same origin to the same destination—but not from multiple destinations. Southwest eliminated its meeting fares program in 2003.
Once the deal closes, AirTran will be fully integrated into the Southwest brand, however Southwest spokeswoman Ashley Dillon says it is too early to know whether Southwest will carry over the EventSavers program. After regulatory approvals go through, company officials will focus on the integration of the airlines’ policies, procedures, and resources. “During that time period all of those details will be hashed out,” says Dillon.
The AirTran acquisition will enable Southwest to start service in new markets, including Atlanta and Washington, D.C. (Reagan National), and expand its presence in major East Coast markets, including New York’s LaGuardia International Airport, Logan International Airport in Boston, and Baltimore/Washington International Airport. All together, the expanded airline will serve nearly 100 U.S. airports.
Jack Keady, president, Keady Transportation Consulting, in Playa del Rey, Calif., says that with one fewer competitor in the low-cost carrier space, the merger will probably mean an increase in fares in the second- and third-tier markets that both served. However, in bigger markets, it could have the opposite effect. “It works both ways. In certain cities you are going to get more competition,” Keady says. A bigger, stronger Southwest will be able to compete with Delta, United, and other major carriers, which may lower fares in some cases, he explains.
Whether the merger results in fewer routes and seats remains to be seen. Often that’s the case, but not always, Keady says. The recent merger of Delta and Northwest, for example, resulted in increased seat capacity, he adds. Throw in the merger of United and Continental, which became official October 1, and there’s even more uncertainty in the skies. United has no plans to reduce seats, says Keady; however, he expects that seats will be tougher to get in the more popular hubs, like Chicago and Houston, as a result of the merger.
“Overall, it’s probably going to move airfares up a bit,” Keady predicts. It all depends on the destination and air traffic volume. In recent months, traffic has been trending up, and if that continues, he says, it’ll be harder to get discounted fares.