Johnny Jet's Travel Blog

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Monday, September 27, 2010

Southwest Airlines to Acquire AirTran

The news of Southwest Airlines to acquire AirTran caught everyone by surprise! Here's a copy of the press release.

DALLAS, Sept 27, 2010 /PRNewswire via COMTEX/ --

Southwest Airlines (NYSE: LUV) announced today that it has entered into a definitive agreement to acquire all of the outstanding common stock of AirTran Holdings, Inc. (NYSE: AAI), the parent company of AirTran Airways (AirTran), for a combination of cash and Southwest Airlines' common stock.

For more information, click here

At Southwest Airlines' closing stock price of $12.28 on September 24, 2010, the transaction values AirTran common stock at $7.69 per share, or approximately $1.4 billion in the aggregate, including AirTran's outstanding convertible notes. This represents a premium of 69 percent over the September 24, 2010 closing price of AirTran stock. 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 prior to closing. Including the existing AirTran net indebtedness and capitalized aircraft operating leases, the transaction value is approximately $3.4 billion.

The agreement has been unanimously approved by the boards of directors of each company, and closing is subject to the approval of AirTran stockholders, receipt of certain regulatory clearances, and fulfillment of customary closing conditions.

"Today is an exciting day for our Employees, our Customers, the communities we serve, and our Shareholders," said Gary C. Kelly, Chairman, President, and CEO of Southwest Airlines. "As we approach our 40th Anniversary of providing exceptional Customer Service at everyday low fares, 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.

"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."

The acquisition will significantly expand Southwest Airlines' low-fare service to many more Customers in many more domestic markets, creating hundreds of additional low-fare itineraries for the traveling public. Moreover, the expansion of low fares should generate hundreds of millions in annual savings to consumers. Based on an economic analysis by Campbell-Hill Aviation Group, LLP*, Southwest Airlines' more expansive low-fare service at Atlanta, alone, has the potential to stimulate over two million new passengers and over $200 million in consumer savings, annually. These savings would be created from the new low-fare competition that Southwest Airlines would be able to provide as a result of the acquisition, expanding the well-known "Southwest Effect'" of reducing fares and stimulating new passenger traffic wherever it flies.

"Both companies have dedicated people with kindred Warrior Spirits, who care about each other, and who care about serving Customers. We will continue to build upon our outstanding Customer experiences, strong and unique Cultures, and award-winning, safe operations," said Kelly. "We believe this acquisition can benefit all Stakeholders. Ultimately, we are very excited to spread low fares farther and look forward to working together with AirTran to realize the new opportunities and benefits we expect to derive from this combination."

Bob Fornaro, AirTran Airways' Chairman, President and CEO said, "This agreement is great news for our Crew Members, our shareholders, our customers and the communities we serve. 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. This agreement with Southwest is a testament to the success and hard work of the more than 8,000 AirTran Crew Members who have built this airline. I am tremendously proud of the things we have accomplished together and look forward to continuing that great work during this next exciting chapter of our history."

AirTran revenues and operating income, excluding special items, for the twelve months ending June 30, 2010, were $2.5 billion and $128 million, respectively. Southwest Airlines revenues and operating income, excluding special items, for the twelve months ending June 30, 2010, were $11.2 billion and $843 million, respectively. The proposed transaction, including the anticipated benefit of net synergies, but excluding the impact of one-time acquisition and integration costs, is expected to be accretive to Southwest Airlines pro forma fully-diluted earnings per share in the first year after the close of the transaction and strongly accretive thereafter. Net annual synergies are expected to exceed $400 million by 2013. One-time costs related to the acquisition and integration of AirTran are expected to be in the range of $300 million to $500 million.

As of June 30, 2010, the combined unrestricted cash and short-term investments of the two companies was $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. In addition, Southwest Airlines has a fully available, unsecured revolving credit facility of $600 million.

Based on current operations, the combined organization would have nearly 43,000 Employees and serve more than 100 million Customers annually from more than 100 different airports in the U.S. and near-international destinations. In addition, the combined carriers' all-Boeing fleet consisting of 685 active aircraft would include 401 Boeing 737-700s, 173 Boeing 737-300s, 25 Boeing 737-500s, and 86 Boeing 717s, with an average age of approximately 10 years, one of the youngest fleets in the industry. Southwest Airlines also announced, previously, that it is evaluating the opportunity to introduce the Boeing 737-800 into its domestic network to complement its current fleet, providing opportunities for longer-haul flying and service to high-demand, slot-controlled, or gate-restricted markets. This acquisition supports Southwest Airlines' evaluation of the Boeing 737-800.

Until closing, Southwest Airlines and AirTran will continue to operate as independent companies. After closing, Bob Fornaro will continue to be involved in the integration of the two companies. Southwest Airlines plans to integrate AirTran into the Southwest Airlines Brand by transitioning the AirTran fleet to the Southwest Airlines livery, developing a consistent Customer Experience, and consolidating corporate functions into its Dallas headquarters. Subject to receipt of necessary approvals, Southwest Airlines' integration plans include transitioning the operations of the two carriers to a Single Operating Certificate. Plans for existing AirTran facilities will be developed by integration teams and decisions will be announced at appropriate times. The carriers' frequent-flyer programs will be combined over time, as well.

Saturday, September 11, 2010

NYC’s Tribute in Light


A behind-the-scenes look at NYC’s Tribute in Light. The Tribute in Light is an art installation of two vertical columns of light that can be seen from up to 60 miles away on a clear night. They first appeared in 2003 in remembrance of the September 11th, 2001 attacks. For the last several years, the lights shine from dusk to dawn each 9/11, a solid reminder of what the victims, heroes and our country went through on that fateful day. (I was in New York City that day and lost a good high school friend.)

Thanks to a friend, I was given a tour by one of the masterminds of the Italian lighting firm, which is behind the project. It turns out there are 88 lights in total, 44 for each column. The closer I got, the more it felt like I was in a Batman or Spiderman movie. It became even more surreal when I ducked in between them and went into the center to see all 44 lights shooting up to make one incredible beam. Fortunately, I wasn't stupid enough to look directly into the lights. My friend Dr. Giammaria later told me in his thick Italian accent that if I had, I'd have had serious problems in about two hours (Gulp! That meant permanent blindness.) In my opinion, the best view seemed to be a few miles away where you could really get the whole feeling.

Good news! According to Jaunted.com (http://bit.ly/clWFlk) the Tribute is back for the ninth anniversary.


Wednesday, September 08, 2010

ETIHAD FIRST FEMALE CAPTAIN

ETIHAD PILOT QUALIFIES TO BECOME FIRST FEMALE CAPTAIN

Etihad Airways is celebrating the maiden commercial flight of Sophie Blanchard, its first female Captain.

Captain Blanchard, a French national, will take the controls of the left hand seat in the flight deck for the first time today for flight EY17 from Abu Dhabi to London Heathrow.

She joined Etihad in 2007 as a First Officer, after initially flying for Etihad Crystal Cargo with Air Atlanta. Since joining Etihad, Captain Blanchard has been able to complete the necessary training and pass the rigorous checks to gain her fourth stripe.

Captain Richard Hill, Etihad Airways’ Chief Operations Officer, said: “We congratulate Sophie on becoming Etihad’s first female Captain. It’s a great achievement and well deserved as she has shown tremendous dedication to achieve the rank of Captain.”

Etihad currently has 10 female pilots within its ranks, and four female cadet pilots.

Captain Blanchard said: “It is a great privilege to become Etihad’s first female Captain and be the first woman to take full command of a commercial flight. The company has been very supportive in my aim to become a Captain and I look forward to my first flight to London.”

She began aviation training after graduating from high school. She gained her commercial license at 18 years old in the U.S., and began flying cargo aircraft for a Belgium-based company.

Her work took her to Africa and around Europe before she joined Icelandic company Air Atlanta. At Air Atlanta, Captain Blanchard began flying leased flights for Etihad Crystal Cargo. She has accrued more than 6,500 hours of flying time.