DOJ Approves Southwest, AirTran Merger

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NEW YORK (MainStreet) — The Department of Justice has formally approved the merger between budget airlines Southwest (Stock Quote: LUV) and AirTran (Stock Quote: AAI), the agency said on Tuesday.

The merger, originally proposed by the two airlines in September, was waiting on DOJ approval since it could potentially violate anti-trust laws and result in higher fares and fewer flight options for consumers.

The DOJ said, however, that Southwest’s acquisition of AirTran was more likely to benefit consumers as it would allow both airlines to widen the areas they service. 

“After a thorough investigation, the division determined that the merger is not likely to substantially lessen competition,” the DOJ said in a written statement. “The presence of low cost carriers like Southwest and AirTran has been shown to lower fares on routes previously served only by incumbent legacy carriers.”

Southwest, based in Dallas, services 72 cities in the U.S. while the Orlando-based AirTran services 69 cities in the U.S., Mexico and the Caribbean.

The DOJ said that any overlap between the two would not result “restrictions on slots or gate availability.”

Having received formal approval, Southwest said in a statement that it plans to close on its deal with AirTran on May 2. A complete merger is expected in the first quarter of 2012.

The DOJ’s findings echo earlier sentiments from travel experts who believed that the merger will lower prices and minimize fees. For a full rundown of what consumers can expect from the approved merger, check out MainStreet’s analysis.

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