Southwest Airlines, Antitrust Violations, Washington 2011

Washington – The Antitrust Division has issued a statement after closing its investigation into the proposed acquisition of AirTran Airways by Southwest Airlines Company.

After a thorough investigation, the division determined that the merger is not likely to substantially lessen competition.

The merged firm will be able to offer new service on routes that neither serves today, including new connecting service through Atlanta’s Hartfield Jackson International Airport from cities currently served by Southwest to cities currently served by AirTran.

The division said that the presence of low cost carriers like Southwest and AirTran has been shown to lower fares on routes previously served only by incumbent legacy carriers.

Although there are overlaps on certain nonstop routes, the division did not challenge the acquisition after considering the consumer benefits from the new service.

Also, the airports affected by the overlaps are not subject to restrictions on slots or gate availability. Where such restrictions exist, entry by other airlines may be particularly difficult.

Southwest Airlines, a Dallas-based company, had revenues of $12.1 billion in 2010, carrying approximately 88 million passengers. AirTran, based in Orlando, had revenues of $2.6 billion in 2010, carrying approximately 25 million passengers.

Both Southwest and AirTran serve multiple cities in the United States, Mexico, and the Caribbean.

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