The Last Chapter

Everyone loves insight into landmark merger deals --- Jeff Smisek called Glenn Tilton on his birthday to talk about what now is United-Continental Holdings, the America West Cactus call sign remains as a symbol of the brand that faded with the US Airways merger.

AirTran senior vice president marketing and planning Kevin Healy earlier this week at the Boyd Group's International Aviation Forecast Summit gave a few more details into the landmark deal that ushered in consolidation in the US low cost sector.

By now everyone knows Southwest chief executive Gary Kelly placed a call in April to his counterpart at AirTran Bob Fornaro as the firs step in the process of Southwest acquiring AirTran.

Healy says only about six people at AirTran were aware of the negotiations, and it wasn't really until the last couple weeks prior to the announcement that the parties were sure they could firm up a deal. "There were a lot of issues to work through," Healy told Summit attendees.

Healy has been with AirTran for 11 years, and remembers when the carrier's managment led by Joe Leonard was trying to revive the fortunes of what was once Valujet.

Laughing, Healy says "if any of us would have done due diligence, none of us would have come".  During one of his first meetings at the airline Healy recalls hearing the company's cash balances were roughly $9 million. "We were a snowstorm away from going out of business," Healy recounts.

AirTran eventually became a formidable challenger to Delta in Atlanta and recently recorded a third quarter operating margin of 8.5%, its best since 2003.

Healy says his personal view is perhaps he's not ready to write the last chapter for AirTran. But he realizes "there aren't a lot of happy endings in the airline industry. But as last chapters go, this is a good one