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.
In addition to a common fleet of 737-700s, the maintenance infrastructures of the merging airlines offered similar capabilities, according to Brian Hirshman, Southwest's senior vice president of technical operations. AirTran operated line-maintenance hangars at Atlanta and Orlando, but it outsourced all airframe and component work. Southwest performs heavy airframe work and intermediate level inspections (C checks) at Dallas Love Field. Intermediate checks are also carried out at Houston's William P. Hobby Airport, Chicago's Midway Airport, and Sky Harbor Airport in Phoenix—but Southwest contracts out “a large majority” of component repairs. (Emergency slides, crew seats, aircraft doors and on-wing composite repairs are among components maintained in-house. Both carriers outsource engine maintenance. Southwest expects to add line maintenance at Denver International Airport in October.
“As with Southwest, AirTran's support infrastructure was very strong, and we were able to integrate AirTran's maintenance team into Southwest's and some have assumed leadership positions,” Hirshman says.
Both of AirTran's Orlando and Atlanta maintenance hangars were working exclusively on AirTran's aircraft early this month mainly due to seniority integration issues. However, Hirshman anticipates this is about to change.
“We now have a single labor agreement on seniority integration, which is pending determination by the National Mediation Board. We expect that determination to be made sometime this month. Until then, neither union works on the others' aircraft,” Hirshman says. Right now, AirTran's mechanics are represented by the International Brotherhood of Teamsters (IBT), while the Aircraft Mechanics Fraternal Association (AMFA) represents Southwest's. AMFA is slated to be the union representing the combined group. Southwest employed 2,700 maintenance workers while AirTran employed 500 at the time of the acquisition.
To date, seniority agreements have been reached with seven of the nine unions representing AirTran and Southwest employees. Negotiations are still in progress with the stock clerks, represented by the IBT, and the customer service representatives, who are represented by the International Association of Machinists and Aerospace Workers.
Jeff Lamb, Southwest's executive vice president and chief people and administrative officer, says all AirTran employees were offered opportunities with the merged company. “We said that any opportunity we'd make available could involve a different job, and maybe in a different city. Of the 215 offers we made, 141 [were] accepted,” he says. “In most cases, the impact was on non-union, administrative staff.”
Lamb adds that the on the day the sale closed, the two airlines together accounted for 43,000 employees. “Today, I'd say we have closer to 45,000, since we added another 2,000 in the last 18 months.” He notes that AirTran outsourced all below-the-wing positions, which mainly included ramp agents, at its 11 locations. Those jobs has been brought in-house, with the addition of 100 employees.