AirTran is Critical of Southwest Bid

13th Dec 2004

AirTran Airways, a
subsidiary of AirTran Holdings, Inc. , today called the Southwest
Airlines’ bid for ATA Airlines’ assets a “clever trick” to eliminate
competition at Chicago Midway’s Airport. With direct lease of 25 of the 43 gates at Midway and a marketing
arrangement over the use of ATA’s remaining eight gates, Southwest
Airlines would effectively control 80 percent of Midway Airport. Even if
ATA Airlines were to eventually fail or sell rights to its eight gates,
the deal with Southwest Airlines would shut out the potential for another
hub carrier to operate there.

AirTran Airways has an agreement with ATA to acquire all 14 of ATA’s
Midway gates and use of some slots at Washington’s Reagan National Airport
and New York’s LaGuardia Airport for $90 million in cash, plus a code
share arrangement for its entire system that is valued at well over an
additional $100 million.

“Southwest Airlines’ bid is nothing more than a clever trick to gain a
stranglehold at Chicago’s Midway Airport,” said Kevin Healy, AirTran
Airways’ vice president of planning and sales for the airline.
“Southwest’s proposal is not in the best interests of the city of Chicago.
As the second largest aviation market in the country, Chicago has a unique
situation with two principal airlines at each airport—United and
American at O’Hare and Southwest and ATA at Midway. Southwest’s proposal
destroys this balance and creates a monopoly at Midway.”

AirTran Airways believes its bid is superior to Southwest Airlines’ bid
for the following reasons:

* Southwest Airlines’ bid will raise additional concerns at the Department
of Justice as it will directly control 25 of the 43 gates at Chicago
Midway Airport—thereby shutting out the possibility of another carrier
operating a hub in Chicago. * Southwest Airlines’ bid will give the
airline a stranglehold at Midway. * Southwest Airlines has the ability to
add up to 50 flights from Chicago on its current 19 gates—the airline
doesn’t need more gates to grow. * Southwest Airlines has no experience
with code share operations whereas AirTran Airways has entered into
several code share arrangements over the past few years. * Southwest
Airlines’ proposed code share with ATA appears to be a one-sided code
share, thus giving Southwest even more control over destinations served
from Midway.



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