Gregory Polek has spent his entire career in aviation journalism with AIN, starting as a proofreader and assistant to then-managing editor Mary Mahoney in 1995 after serving an internship with&nbsp;New Jersey Monthly&nbsp;magazine and completing his B.A. degree in English/Writing at New Jersey’s William Paterson College. By 1997 Polek accepted a position as an associate editor, covering the regional airline beat for&nbsp;Aviation International News&nbsp;in place of retiring industry veteran Don Anderson. The assignment took Polek across North America and Europe to profile regional airlines varying in size and mission from the likes of floatplane operators Kenmore Air and Chalk’s Ocean Airways to regional jet operators such as SkyWest and American Eagle. Today, in his dual role as Air Transport Editor and International Airshow Editor, Polek writes, edits, and manages AIN’s commercial aviation content while overseeing each of the company’s daily international air show publications in Paris, Farnborough, Singapore, and Dubai. Most recently Polek has assumed oversight of daily coverage of the Helicopter Association International’s annual Heli-Expo convention.

Senior Editor

Gregory Polek

The consolidation of the airline industry extended to the low-fare segment in dramatic fashion this morning, as Southwest Airlines announced that it has agreed to acquire all the outstanding common stock of AirTran Holdings for a combination of cash and Southwest Airlines common stock.&nbsp;

At Southwest Airlines’ closing stock price of $12.28 on September 24, the transaction values AirTran common stock at $7.69 per share, or some $1.4 billion, including AirTran’s outstanding convertible notes. Under the agreement, each share of AirTran common stock will be exchanged for $3.75 in cash and 0.321 shares of Southwest Airlines’ common stock, subject to certain adjustments, based on Southwest Airlines' share price before closing. Southwest places the value of the transaction at some $3.4 billion, including existing AirTran net indebtedness and capitalized aircraft operating leases.&nbsp;

The boards of directors of each company have unanimously approved the agreement, which remains subject to the approval of AirTran stockholders, receipt of certain regulatory clearances and fulfillment of customary closing conditions.

Based on current operations, the combined organization would employ nearly 43,000 people and serve more than 100 million customers annually from more than 100 different airports in the U.S. and near-international destinations. The combined carriers’ all-Boeing fleet would consist of 401 Boeing 737-700s, 173 Boeing 737-300s, 25 Boeing 737-500s and 86 Boeing 717s. Meanwhile, Southwest continues to evaluate the possibility of adding Boeing 737-800s into its domestic network, as it considers opportunities for longer-haul flying and service to high-demand, slot-controlled or gate-restricted markets. The AirTran acquisition supports Southwest Airlines’ evaluation of the Boeing 737-800, according to Southwest.&nbsp;

Until closing, Southwest Airlines and AirTran will continue to operate as independent companies. After closing, AirTran chairman, president and CEO Bob Fornaro will continue to participate in the integration of the two companies. Southwest Airlines plans to paint the AirTran fleet in Southwest Airlines livery and consolidate corporate functions into its Dallas headquarters. So-called integration teams will develop plans for existing AirTran facilities and the airline will announce decisions related to those sites “at appropriate times.” &nbsp;

Southwest expects net annual synergies to exceed $400 million by 2013 and one-time costs related to the acquisition and integration of AirTran to fall in the range of $300 million to $500 million.&nbsp;

As of June 30, the combined unrestricted cash and short-term investments of the two companies totaled $3.7 billion. Southwest Airlines intends to fund approximately $670 million in cash consideration for the transaction out of cash on hand. Since June 30, Southwest’s cash and short-term investments balance has increased from $3.1 billion to $3.3 billion. The airline also has a fully available, unsecured revolving credit facility of $600 million.&nbsp;

&nbsp;“The acquisition of AirTran represents a unique opportunity to grow Southwest Airlines' presence in key markets we don't yet serve and takes a significant step towards positioning us for future growth,” said Southwest Airlines chairman, president and CEO Gary Kelly.&nbsp;

“This acquisition creates more jobs and career opportunities for our combined employee groups, as a whole. It allows us to better respond to the economic and competitive challenges of our industry, and fits perfectly within our strategy for our fifth decade of service. It offers customers more low-fare destinations as we extend our network and diversify into new markets, including significant opportunities to and from Atlanta, the busiest airport in the U.S. and the largest domestic market we do not serve, as well as Washington, D.C., via Ronald Reagan National Airport. The acquisition also allows us to expand our presence in key markets, like New York LaGuardia, Boston Logan, and Baltimore/Washington. It presents us the opportunity to extend our service to many smaller domestic cities that we don't serve today, and provides access to key near-international leisure markets in the Caribbean and Mexico. Finally, this accelerates our goal to boost profits and achieve our financial targets.”&nbsp;

According to Southwest, an economic analysis by Campbell-Hill Aviation Group showed that the airline’s more expansive low-fare service at Atlanta alone could stimulate more than two million new passengers and over $200 million in annual consumer savings.&nbsp;

“Joining Southwest Airlines will give us opportunities to grow, both professionally as individuals and as a group, in ways that simply would not be possible without this agreement,” said Fornaro.

AirTran revenues and operating income, excluding special items, for the 12 months ending June 30, 2010, totaled $2.5 billion and $128 million, respectively. Southwest Airlines revenues and operating income, excluding special items, for the same period totaled $11.2 billion and $843 million, respectively.&nbsp;

Southwest Airlines to Acquire AirTran 

The consolidation of the airline industry extended to the low-fare segment in dramatic fashion this morning, as Southwest Airlines announced that it has ag

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