There are plans to enlarge the merged carrier's international footprint, according to Jordan. All 20 of the Boeing 737-800s the carrier has on firm order will be Etops-certified and the Amadeus IT Group's Altea reservations system will handle international bookings as AirTran transitions into Southwest. Altea, slated to be operational in 2014, will replace AirTran's legacy Navitaire system. Asked about additional cross-border or other over-water destinations, Jordan says, “we are very interested in Central America. And Hawaii is a definite possibility.”
He adds that Southwest also will select a “new-generation domestic bookings product” to replace its current Sabre SAAS system within the next 18 months. Proposals by Sabre and Amadeus are under consideration. In the meantime, the airline is “developing the technological capabilities” required to permit code-sharing between Southwest and AirTran by the first quarter of 2013, using the existing reservation infrastructure.
When the merger was announced, AirTran had 138 aircraft: 52 737-700s and 86 717s. Another 51 737-700s, plus two more 717s, were on order. AirTran took delivery of the two 717s by the time its sale to Southwest was finalized, bringing the fleet to 140. Jordan says Southwest, given its considerable buying power, was able to step into AirTran's 737-700 delivery positions and negotiate better pricing for the aircraft, spares and maintenance support.
“Both Boeing and [engine OEM] General Electric were fantastic partners in terms of renegotiating the acquisition costs of the aircraft, engines and maintenance contracts,” Jordan says. “They didn't have to do this.” He adds that as these aircraft come off the assembly line, they will be folded directly into Southwest's fleet.
As AirTran's currently operated 737-700s transfer to Southwest, they are repainted in Southwest livery and reconfigured with its seating, carpeting and Wi-Fi, after which they enter Southwest's maintenance program. Some changes to the flight deck also will be made for fleet commonality. Under current planning, 12 of the 737-700s will be cycled into the Southwest fleet this year. The reconfiguration process, which Jordan reports is on track, will take 40 days per aircraft. With the integration of the AirTran aircraft, the combined fleet's average age will be about nine years.
Southwest's all-737 fleet, which totals 552, is a mix of -300, -500, -700, and -800 models. When the AirTran acquisition closed, Southwest had 246 aircraft on order through 2021, including firm orders, options and purchase rights for the -700 and -800s. Since then, Boeing announced that Southwest will be the launch customer for the 737 MAX, with an order of 150. First deliveries are scheduled for 2017.
One result of the merger will be the gradual phase-out of AirTran's 717s through 2015, under a sublease plan with Boeing Capital Corp. and Delta Air Lines, announced in July. Jordan maintains that, originally, Southwest had no plans to dispose of them.
“The 717, with 117 seats, has about the same trip costs as a 737-300 with 143 seats,” he says. “But, since the 717 was designed for shorter trips, we would have been limited as to where we could fly them nonstop, which would have mandated maintenance support in more locations. Although we planned to use those airplanes, we concluded that if a deal that made sense came up to dispose of them, we would look at it.”
Under that deal, Delta will get the first batch of 16 717s starting in August 2013, while the next group of 36 will be delivered in 2014. Delta will receive the remaining 36 in 2015. Deliveries are projected at the rate of three per month. Southwest also agreed to pay conversion costs as part of the transition to Delta, in conformance with Delta's design specifications. For the total 717 fleet, that will run about $100 million, or about $50 million more than what it would have cost Southwest, had it decided to convert them to its own specs.
A Delta official confirms that the 717s were selected to replace the carrier's 50-seat regional jets.