Air Transport World

A clever way to get aircraft.(Waypoints)(AirTran Airways Inc.)(Delta Air Lines Inc.)(Southwest Airlines Co.)

A long, long time ago, someone--maybe it was Frank Lorenzo--observed that he was attracted to bid on another airline by simple arithmetic. It was faster and cheaper, he'd figured out, to buy another carrier than to try to acquire an equivalent number of aircraft.

Airline share prices being what they are, that math hasn't changed much in the last 30 years and amid all the discussions over whether Southwest Airlines can successfully meld the culture of AirTran Airways or take on Delta Air Lines in Atlanta is the simple fact that in agreeing to pay $1.4 billion in cash and stock for the Orlando-based LCC, SWA is getting 52 young 737-700s at about half the price it would cost to buy them separately. …

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