Southwest and AirTran to optimise flight schedules at Atlanta this year

Washington DC
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Southwest Airlines expects to optimise flight schedules at its subsidiary AirTran's hub at Atlanta when the two airlines begin codesharing this year, even as it indicates that it is unlikely to add flights back into the airport.

Southwest closed on its acquisition of AirTran in May 2011 and is in the process of integrating both airlines' networks and schedules. It says today that it will begin testing connecting itineraries between the Southwest and AirTran networks in a "handful of markets" and that "significant offerings" are planned in February and more in March.

As part of the integration, Southwest has been "dehubbing" AirTran's base at Atlanta, which as a result has lost non-stop service to a number of cities even as Southwest begins flying its own metal to the southern city.

Southwest's chief commercial officer Bob Jordan acknowledges today that the airline is running a "sub-optimised AirTran network" in Atlanta, but says that the carrier will be able to further optimise the two airlines' flight schedules at the airport once they begin codesharing during the first quarter.

Noting that the two carriers have seen "really good results" when it came to managing capacity in their overlapping markets out of Atlanta, Jordan says: "There is a lot we just can't do until we have the connectivity [in flight schedules]... we might be down 10 to a dozen flights from 18 months ago but a lot of that has to do with the number of aircraft being converted from AirTran."

Southwest is in the process of converting AirTran's 52 Boeing 737-700s to Southwest's interiors and livery and had converted 11 as of the end of 2012.

Jordan, however, indicates that Southwest is unlikely to add capacity back into Atlanta. "You will see pretty substantial changes in schedules, but not substantial changes in the number of flights between the two carriers," he says.

As a result of the integration between the two airlines' networks, Southwest has dropped 16 AirTran destinations from their combined network and announced the transition of several AirTran markets to Southwest. At least seven cities will transition this year.

The airline says today it realised $142 million of net annualised pre-tax synergies from the merger during 2012, and is on track to achieving its $400 million target in 2013.

Kelly says that while the synergies realised in 2012 are mostly cost-driven, the synergies to be achieved in 2013 will help drive revenue as the two carriers optimise their flight schedules.