Southwest Airlines will officially complete its integration of AirTran Airways – four years since announcing plans to acquire AirTran – on Sunday, December 28. After AirTran flight 1 lands in Tampa just before midnight Sunday, AirTran will officially cease operations.
For many, Sunday is bittersweet; many employees are excited to complete the integration, but some customers are not happy to see the beloved AirTran brand be switched to Southwest.
Over the last two decades, AirTran has had a long and significant presence in the U.S. airline industry as it dates back to the introduction of ValuJet. In this week’s FlashBack Friday, we take a look at ValuJet and AirTran.
The ValuJet Days
When Eastern Air Lines went out of business in 1991, it left a void in the Southern travel market as it was growing at a rapid pace, but Robert Priddy – the founder of Atlantic Southeast Airlines, Air Midwest Airlines, and Florida Gulf Airlines – started working on plans for ValuJet – which he helped co-found in 1992 – to help fill the void.
From the beginning, very few people took ValuJet seriously. It had a cartoon character painted on the fuselage of old DC-9s it acquired from Delta, and its orange and yellow all coach seats were not really eye candy. Plus, ValuJet based its operations in Atlanta where it would have to directly compete with Delta who dominated the Atlanta market since 1941.
Despite what people thought about ValuJet, it still continued to push that it offered low-fares and only flew full size jets.
On October 26, 1993, ValuJet flew its inaugural flight – ValuJet 901 – from Atlanta’s Hartsfield-Jackson International Airport to Tampa with 105 customers. Shortly after the first flight, word started spreading quickly that ValuJet’s fares were much lower than Delta’s, and passengers began flying ValuJet more and more.
Meanwhile, the airline became very profitable thanks to non-union crews, low fares, high aircraft utilization, and sub-contracting most operational functions, and the airline filed for an initial public offering (IPO) in 1994. It soon became one of the hottest trades on Wall Street.
Some its business model as a recipe for disaster.
Two years after starting flights, ValuJet placed an order for 50 MD-95s which later became known as the 717 when Boeing bought McDonnell Douglas. This was the first time in history that an airline as young as ValuJet would become the launch customer for a new plane.
On May 11, 1996, ValuJet flight 592 took off from Miami for Atlanta, but shortly after takeoff, fire broke out the in cargo hold and quickly spread throughout the aircraft. Unfortunately, the pilots were not able to return to Miami, and the aircraft plunged into the Everglades, killing all 110 people on-board.
Leading up the the crash, the FAA opened an investigation into why ValuJet had more than 114 emergency landings in 17 months and 14 times the number of accidents. After the crash, the FAA grounded ValuJet for maintenance practices for four months.
Where Do we Go Next?
When flight operations resumed in September 1996, ValuJet made some significant changes; it reduced its fleet from 51 DC-9s to 15, and it made sure to make safety and compliance its top priority.
However, people picked up on every little thing – from turbulence to a hard landing – that went wrong or could be seen as something unsafe on a ValuJet flight, and it consistently made the front page of the newspaper.
Meanwhile, AirTran Corporation who was the holding company of Meseba Airlines – a Northwest Airlink carrier – was growing as it acquired Conquest Sun Airlines which was planning to become a Boeing 737 operator based out of Orlando. Over time, AirTran started building up a small low-fare hub in Orlando to several destinations in the north and midwest.
In July 1997, ValuJet Airlines’ holding company, ValuJet Inc., announced plans to buy AirTran Corporation. The new airline would be known as AirTran Airways.
A Remarkable Turnaround
Over the next few years, executives worked very hard to turn the old ValuJet into AirTran with a new and better reputation. Even to this day, the ValuJet turn around is still looked highly upon in the airline industry.
On September 24, 1997, ValuJet Airlines changed its name to AirTran Airlines, and in the summer of 1998, the two airlines merged onto the same FAA certificate. While the airline kept its main hub in Atlanta, the headquarters was combined in Orlando, Florida, and finally, in January 1999, a new management team led by Joe Leonard, a veteran of Eastern Air Lines and Robert L. Fornaro, of US Airways, took over.
Like any acquisition, it’s difficult to bring employees from different cultures together, but there was no drama or strikes by employees during integration. Many employees cite management’s focus on ensuring employees were first – similar to Southwest’s culture – for making the integration smooth.
The airline also decided to focus on the needs of business travelers which were often overlooked by low fare airlines which typically mean that business travelers did not fly these airlines. AirTran wanted to fix that, and it introduced a business class section that featured four rows of two-by-two seats with seven more inches of legroom and four more inches of seat width than its coach seats. The business class seats were only $25 more than AirTran’s regular one-way coach fare on nonstop flights and $40 more on multi-stop flights. All of the carrier’s aircraft had the new class by November 22, 1997.
The airline still continued to grow in Atlanta where it built a large hub that was bustling with DC-9s and 737s. By 2003, AirTran had retired most of its DC-9s and replaced them with the 717s which received raving reviews from customers. Later in the year, AirTran announced plans to purchase 100 new Boeing 737-700s to help expand the airline to operate longer flights and expand to the west coast.
In 2004, the AirTran JetConnect regional brand, operated by Air Wisconsin, ceased operations after two years of service. Also in 2004, AirTran made a bid for 14 gates at Chicago Midway after ATA’s departure, but unfortunately, Southwest outbid the airline.
In 2005, AirTran introduced satellite XM radio as its in-flight entertainment. This was the first time that an airline introduced this feature, and it celebrated it at a special event in Las Vegas with Elton John who’s face was also on a promotional plane. This service would be removed in 2011 when the airline was acquired by Southwest Airlines to ensure a consistent product.
2006 was another big year for AirTran. It took delivery of one of the last two Boeing 717s during the first half, and at the end of 2006, it attempted to takeover Milwaukee based Midwest Airlines. Although eight months later, the airline announced that its attempt to purchase Midwest expired, and TPG Capital and Northwest were in talks to purchase Midwest for more than AirTran offered. Despite increasing its offer, AirTran will still unable to acquire Midwest.
Four years later in 2010, AirTran Airways opened its second crew base in Milwaukee and made the city a new hub.
The Southwest Acquisition
On September 28, 2010, Southwest Airlines announced that it would acquire AirTran Airways with a $3.4 billion bid.
Although the deal was not official until May 2011, Gary Kelly, Southwest’s CEO, met with AirTran’s CEO, Bob Fornaro in April 2010, to see if a Southwest takeover would be something that AirTran was interested in. Fornaro said he would be interested if it was under the right circumstances, and six moths later, fuel spiked and the economy started to decline. Days later, the announcement came.
Southwest would be able to increase its presence in several cities through the acquisition. It was able to gain access to Atlanta which was the largest U.S. city without Southwest Service. Plus, it was able to gain a significant presence in Milwaukee and grow in Baltimore and Orlando. Plus, Southwest would be able to add several international cities to its growing network.
Although, some did not think AirTran and Southwest would mesh well together because the two airlines were different. Although both were low-cost airlines, AirTran had a mix of 717s and 737s, a business class cabin, and operated a hub/spoke network; Southwest only operated and still operates 737s all in a one class configuration and operated mostly point to point. Southwest was able to lease out AirTran’s 717s to Delta Air Lines, and AirTran would slowly be absorbed into Southwest over the next few years.
Although, the merger did offer a lot of benefits. Southwest would be able to gain international access and AirTran was familiar with 737 operations which would allow the carrier to grow.