Southwest Airlines: The AirTran Acquisition  Executive Summary
1. After the deregulation of the US Airline industry in 1978,
the barriers to entry within the industry came down
significantly and many Low Cost Carriers emerged overtime. 2.
The emergence of rival Low Cost Carriers and the improvement in
the Operation Efficiencies of Full Cost Carriers progressively
eroded Southwest’s competitive advantage. 3. A closer look at
AirTran’s value chain and its resultant efficiency shows
significant differences in the operational strategies and
differentiation approach of the two companies. A seamless
integration would largely depend on Southwest’s ability to merge
systems, processes and organizational cultures. | | | 2010
Revenues (M) | $12,104 | $2,600 | 2010 O&D Revenue | ~ 88
Million | ~ 25 Million | 2010 Load Factor | 79.3% | 81.4% | 2010
Departures | 1,114,451 | 252,663 | Airports Served | 72 | 69 |
Source: Southwest Airlines Media / Merger Website  4. Given the
increasing consolidation in the industry in gener