There was a superfluous report stating the recession ended in the summer of 2009. The media outlet who released this report must not have known the current economic climate. Unemployment claims have been higher each month. The only change was when the government added thousands of workers to perform the 2010 Census. Mortgage failures have been rampant in major cities such as Las Vegas, Phoenix, and San Francisco. One in seven Americans have been labeled as living below the Federal poverty line.
All of these factors have not stopped big businesses from spending even bigger money. Southwest Airlines announced the acquisition of smaller rival AirTran Airways. For a reported $1.4 billion, Southwest Airlines has now positioned itself to be a growth vehicle among emerging markets. This move allows Southwest Airlines to enter key markets, potentially reduce fares and increase service to millions of new customers daily.
Following the trend of recent mergers such as Continental/United Airways and Delta/Northwest, Southwest Airlines merger will increase the company’s presence in major hubs. New York’s La Guardia and Washington D.C.’s Reagan National airports are on the list of big cities as well as the passenger heavy Atlanta.
With Southwest Airlines entering Atlanta, Delta will have a main competitor knowing at its doorstep. It is too soon to know if a low-cost airline such as Southwest Airlines will have an impact or not.
The details of the merger between Southwest Airlines and AirTran have not been immediately released, but speculations of reduced destinations and restructure of baggage fees are speculated. The final approval of the deal has to first be approved by United States regulators and the shareholders of bother Southwest Airlines and AirTran.
With over 100 million potential passengers flying aboard Southwest Airlines as well as AirTran, there is definitely money flying in the friendly skies.