Dallas-based Southwest Airlines Co. (LUV), which purchased AirTran Airways in 2011, has nearly completed the integration process with the departure of the latter’s final flight (Flight 1) from Atlanta to Tampa, FL. The flight departed from the Hartsfield-Jackson International Airport for the Tampa Bay International airport at 10.25 p.m on Dec 28.
Several employees of Southwest, as well as those of the erstwhile AirTran, were on board this historic flight. The flight had a total of 117 passengers. Many more gathered at Tampa to receive the flight that marked the end of an era of successful customer service by AirTran.
The historic last flight was reminiscent of AirTran’s first commercial flight that flew on the same route 21 years ago. Southwest Airlines has expanded significantly following the acquisition of AirTran by taking over many routes formerly operated by AirTran.
With the integration process of the AirTran–Southwest Airlines merger almost over, we believe all eyes will now be set on the integration process of the merger between American Airlines and U.S. Airways. The merger, completed in late 2013, led to the formation of the American Airlines Group (AAL). American Airlines and U.S. Airways still operate as separate entities. The integration process recently got a push when a contract covering the flight attendants of American Airlines and U.S. Airways was finalized.
We believe that merger-driven consolidation has played an important role in the airline industry, limiting competition. Moreover, operating efficiencies have also largely improved following mergers by airline companies. According to a report in the Associated Press, following the mergers in the industry, more than 80% of the travel market in the U.S. is now being dominated by four major carriers — United Continental Holdings, Inc. (UAL), Delta Air Lines, Inc. (DAL), Southwest Airlines and American Airlines Group.
Zacks Rank
Southwest Airlines carries a Zacks Rank #1 (Strong Buy). An equally highly ranked stock in the airline space is Delta Air Lines.
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