What might AirTran and Edith Piaf have in common? No regrets, as the Little Sparrow would have said. Rebuffed in its pursuit of Midwest Airlines, the Orlando-based AirTran has not looked back. It’s adding flights in Milwaukee, Midwest’s home town, making big bucks while Midwest loses money even in what should be a strong season and is not looking for a merger partner because it doesn’t need one. And now AirTran is adding valuable assets at two of the most desirable airports as it takes advantages of the troubles of another beleaguered carrier.
ATA Airlines, which used to be the low-fares laggard American Trans Air, is giving up slots at Washington Reagan National and at New York LaGuardia airports, and AirTran is taking them over. AirTran will use the slots to boost its competition with Delta on the lucrative routes to Atlanta’s Hartsfield/Jackson. The move is part of ATA’s retreat from Washington, and later in the year, from New York LaGuardia. ATA had flown to its Chicago Midway hub from the two East Coast airports, but evidently could not make money. We will not ask how an airline couldn’t make money between Washington and Chicago. ATA insists that its code-share with Southwest Airlines will not suffer from the pullback. Interestingly, ATA formed the link with Southwest after AirTran’s unsuccessful buyout bid for ATA back in 2005.
(The slots news came on the same day that Midwest said its shareholders had approved a deal to go private through a $450-million-ish buyout from Texas Pacific. That deal, engineered to fend off AirTran’s pursuits last summer, would give shareholders $17 a share for their Midwest Holdings. That’s about 80 cents higher than the price at which Midwest shares were trading on the open market. Investors may be sceptical about the TPG deal because the US competition authorities are investigating it; even if it does not lead to objections or charges, such antitrust investigations can delay a proceeding.)