Southwest

Southwest Airlines (NYSE: LUV) and the International Brotherhood of Teamsters (IBT) Airlines Division, representing the carrier’s Stock Clerks, announced today that the two parties have reached a tentative agreement. The tentative agreement is for a new, five-year contract through August 16, 2013. The current contract became amendable on August 16, 2008. One year ago, Southwest and the Teamsters agreed to seek assistance from the National Mediation Board through the mediation process as defined by the Railway Labor Act.

“Hard work and persistence have definitely paid off during this mediation process,” said Mike Van de Ven, Southwest Airlines Executive Vice President and Chief Operating Officer. “The negotiation teams worked together to address several work rule changes in reaching this mutually beneficial, forward thinking tentative agreement, which delivers wage and benefit enhancements in exchange for work rule improvements and contract flexibility.”
In the upcoming weeks, the IBT membership will be given the full details of the agreement and have the opportunity to vote on ratification. IBT represents more than 170 Southwest Airlines Employees.

In its 40th year of service, Southwest Airlines continues to differentiate itself from other low-fare carriers–offering a reliable product with exemplary Customer Service. Southwest Airlines serves Milwaukee with 12 daily departures and is the nation’s largest carrier in terms of originating domestic passengers boarded, now serving 69 cities in 35 states. Beginning March 13, 2011, Southwest will initiate service to Charleston and Greenville/Spartanburg, South Carolina, and on March 27, 2011, service will begin to Newark Liberty International Airport. Southwest also is one of the most honored airlines in the world known for its commitment to the triple bottom line of Performance, People, and Planet. To read more about how Southwest is doing its part to be a good citizen, visit southwest.com/cares to read the Southwest Airlines One Report(TM). Based in Dallas, Southwest currently operates more than 3,200 flights a day and has nearly 35,000 Employees systemwide.

DALLAS, Feb. 4, 2011 /PRNewswire via COMTEX/ —

Southwest Airlines (NYSE: LUV) announced today that more than 60 nonprofit hospitals and charities from across the nation will be participants in its Medical Transportation Grant Program this year. Southwest has nearly doubled the grant program’s 2011 budget with hopes of assisting more than 5,500 patients and family members with their medical-related travel needs.Through the Southwest Airlines Medical Transportation Grant Program, the airline provides complimentary, roundtrip tickets to hospitals and medical transportation nonprofit organizations. The tickets are distributed by the organizations to deserving patients and their caregivers who must travel for medical care.

“The feedback we receive from families who benefit from the Medical Transportation Grant Program reaffirms for us that we are meeting a great need during what can be a difficult time in these families’ lives,” said Debra Benton, Southwest Airlines Director of Community Relations and Charitable Giving. “Southwest is proud to be able to provide this program to even more nonprofit hospitals and charities as support for families affected by serious illness.”

DALLAS, Jan. 11, 2011 — Now ready for departure—Southwest Airlines’ Pilots begin Required Navigation Performance (RNP) efficient flight procedures today at 11 airports nationwide. This major milestone to reduce environmental impact with a more efficient operation and to assist the Federal Aviation Administration (FAA) on NextGen initiatives is the culmination of a four-year project with partners Boeing, GE, and Honeywell. RNP is satellite-based navigation that brings together the accuracy of GPS (Global Positioning System), the capabilities of advanced aircraft avionics, and new flight procedures.

“RNP sets the stage for Southwest to continue doing its part to conserve fuel, improve safety, and reduce carbon emissions and Greenhouse gases, while simultaneously taking advantage of the high-performance characteristics that exist in an airline’s fleet,” said Captain Jeff Martin, Southwest’s Vice President of the Operations Coordination Center. “The efficiencies RNP introduces help Southwest be a good neighbor while also maintaining our low fares.”

The Company’s Pilots and Dispatchers now follow these new efficient flight procedures and enhanced avionics to fly specifically designed satellite-based navigation approaches to many Southwest airports. The primary airports with efficient RNP procedures include Amarillo*, Birmingham, Boise, Corpus Christi*, Los Angeles, Chicago Midway, Oakland, Oklahoma City, West Palm Beach, Raleigh-Durham, and San Jose.

With RNP/NextGen procedures designed at 11 Southwest airports, the Company’s projected savings is $16 million a year, with an anticipated savings of more than $60 million per year once all Southwest airports have efficient RNP procedures.

“RNP is a significant step in the future for the NextGen Air Traffic Control system,” said Mike Van de Ven, Southwest’s Executive Vice President and Chief Operating Officer. “This milestone culminates substantial efforts by our Company working with the FAA to position Southwest as a leading participant in a modernized air traffic control system.”

In addition to modifying 345 Boeing 737-700s with new flight display software and ensuring that all new aircraft are RNP ready, this cross-company effort involving Technology, Maintenance & Engineering, and the Operations Coordination Center also featured intense training efforts to support achieving this milestone.

“I am very proud of our Flight Operations Team for the design, training, and implementation of NextGen procedures, including training more than 5,900 Pilots to fly Primary Flight Display Navigation Display (PFD/ND) procedures,” said Captain Chuck Magill, Vice President of Flight Operations. “This extensive training allows us to capture RNP procedures as well as provide flexibility in any new aircraft platform we might use in the future.”

DALLAS, Dec. 16, 2010 COMTEX/ —

Southwest Airlines (NYSE: LUV) is pleased to announce that its Flight Simulator Technicians, represented by the International Brotherhood of Teamsters (IBT) Airlines Division, voted to ratify an extension to their current agreement. The agreement is for a two-year contract extension through October 2013. The current contract would have become amendable on November 1, 2011.

“I want to congratulate both sides for ratification of a contract that delivers mutually beneficial enhancements to pay, benefits, and work rules to our dedicated Flight Simulator Technicians,” said Mike Van de Ven, Southwest Airlines Executive Vice President and Chief Operating Officer. “The negotiating teams were able to balance our competitive needs with our Technicians’ requests to quickly come to an agreement as we head toward our 40th year of operation.”

After nearly 40 years of service, Southwest Airlines continues to differentiate itself from other low fare carriers–offering a reliable product with exemplary Customer Service. Southwest Airlines is the nation’s largest carrier in terms of originating domestic passengers boarded, now serving 69 cities in 35 states. Southwest also is one of the most honored airlines in the world known for its commitment to the triple bottom line of Performance, People, and Planet. To read more about how Southwest is doing its part to be a good citizen, visit southwest.com/cares to read the Southwest Airlines One Report(TM). Based in Dallas, Southwest currently operates more than 3,100 flights a day and has nearly 35,000 Employees systemwide.

DALLAS, Dec. 15, 2010 —

Today, Gary Kelly, Southwest Airlines Chairman, President, and CEO spoke at the Wings Club in New York City and shared additional details on introducing the Boeing 737-800 to the Southwest fleet.

Kelly announced the Company will substitute 20 of its 737-700 orders for -800s, with the first delivery scheduled for March 2012. With both its Pilots’ and Flight Attendants’ Unions ratifying their contracts to add the -800 to their current collective bargaining agreements, the Company is continuing to finalize discussions with the Boeing Company regarding substitutions of the -800s for the -700 positions, and configuration and equipage options.

“The -800 represents many exciting opportunities for our Employees and our Customers,” Kelly said. “We are looking to the future and the -800 sets the stage to bring more destinations into the realm of possibilities for Southwest, to operate a more economical aircraft, and to offer better scheduling flexibility in high-demand, slot-controlled, or gate-restricted markets.”

The current plan is to deliver these 20, 737-800 aircraft in full Extended-range Twin-engine Operational Performance Standards (ETOPS) configuration. The current configuration also includes the Boeing Company’s Sky Interior that offers a quieter cabin, improved operational security features, and LED reading and ceiling lighting.

After nearly 40 years of service, Southwest Airlines (NYSE: LUV) continues to differentiate itself from other low fare carriers–offering a reliable product with exemplary Customer Service. Southwest Airlines is the nation’s largest carrier in terms of originating domestic passengers boarded, now serving 69 cities in 35 states. Southwest also is one of the most honored airlines in the world known for its commitment to the triple bottom line of Performance, People, and Planet. To read more about how Southwest is doing its part to be a good citizen, visit southwest.com/cares to read the Southwest Airlines One Report(TM). Based in Dallas, Southwest currently operates more than 3,100 flights a day and has nearly 35,000 Employees systemwide.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains forward-looking statements related to Southwest’s plans and expectations regarding the introduction of the Boeing 737-800 to its fleet. These statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the Company’s current intent, expectations, and projections and are not guarantees of future performance. These statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the impact of fuel prices and economic conditions on the Company’s overall business plan and strategies; (ii) consumer demand for air travel; (iii) actions of competitors, including without limitation pricing, scheduling, and capacity decisions, and consolidation and alliance activities; (iv) the impact of governmental regulations on the Company’s operations; and (v) other factors, as described in the Company’s filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and under the heading “Forward-looking statements” in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010, and September 30, 2010.

www.southwest.com

SOURCE Southwest Airlines

Southwest Airlines is pleased to announce John Jamotta as the new Vice President of Network Planning. John has been with Southwest Airlines and Network Planning–formerly known as Schedule Planning–since 1987, serving as Senior Director for the past seven years and leading the integrated planning function within Network Planning.

“We are proud to announce John’s new role at Southwest Airlines as Vice President of Network Planning,” said Bob Jordan, Southwest Airlines Executive Vice President of Strategy and Planning. “We have seen a number of significant and exciting changes for Southwest Airlines recently, including the potential to add the 737-800; the addition of destinations such as Panama City Beach, Charleston, and Greenville/Spartanburg; and the continued press into New York City through the acquisition of Newark slots. Productively growing the network is at the heart of those changes, while at the same time it’s vital that we stay true to our core network fundamentals that have sustained us for nearly 40 years. John’s Leadership will help us shape our network strategy as we look to the future.”

The Network Planning department at Southwest is comprised of a Team of exceptionally talented Employees, who manage Southwest’s flight schedules, routes, capacity planning, integrated planning, and network development as well as conducting operational and traffic analysis.

John is a Leader in advancing technology innovation as tools for the scheduling and planning disciplines. He has also been active in the Company’s efforts to proliferate its culture within the organization, and to the communities it serves. Prior to joining Southwest Airlines, John worked for Pan Am in both ground operations and in management. Originally from New York, John has a Psychology degree from St. John’s University in New York City. For a photo of John Jamotta, please visit: www.swamedia.com/photos.

After nearly 40 years of service, Southwest Airlines (NYSE: LUV) continues to differentiate itself from other low fare carriers — offering a reliable product with exemplary Customer Service. Southwest Airlines is the nation’s largest carrier in terms of originating domestic passengers boarded; now serving 69 cities in 35 states. Southwest also is one of the most honored airlines in the world known for its commitment to the triple bottom line of Performance, People, and Planet. To read more about how Southwest is doing its part to be a good citizen, visit southwest.com/cares to read the Southwest Airlines One Report(TM). Based in Dallas, Southwest currently operates more than 3,100 flights a day and has nearly 35,000 Employees systemwide.

DALLAS, Nov. 18, 2010
Southwest Airlines is pleased to announce that its Flight Attendants, represented by the Transport Workers Union (TWU) Local 556, voted to ratify a tentative agreement reached with the Company in September to add the Boeing 737-800 to the current collective bargaining agreement. With this positive vote, the Flight Attendants’ current contract will also be extended by one year, becoming amendable May 31, 2013, and will include the potential for wage rate increases based on the Company’s financial performance. TWU 556 is made up of more than 9,700 Flight Attendants.

“Since we began evaluating the opportunity to introduce the Boeing 737-800 into our fleet, the TWU negotiating committee and Leadership Team quickly grasped the potential benefits along with the added operational complexities associated with this decision,” said Mike Van de Ven, Southwest Airlines Executive Vice President and Chief Operating Officer. “This was an important step in our due diligence process, and we are pleased that our hard working Flight Attendants recognize the long-term benefits of adding this new aircraft to our fleet.”

The decision to add the -800 still isn’t final. The carrier is still waiting for a ratification vote with its Pilots’ Union, SWAPA, and is continuing to evaluate network and configuration options. Any details regarding firm orders with Boeing, timing, and quantity of deliveries are still to be determined. If the Company pursues the -800, a joint committee would meet to work on the logistical details related to scheduling and bidding procedures that adding a fourth Flight Attendant will require.

After nearly 40 years of service, Southwest Airlines continues to differentiate itself from other low fare carriers–offering a reliable product with exemplary Customer Service. Southwest Airlines is the nation’s largest carrier in terms of originating domestic passengers boarded, now serving 69 cities in 35 states. Southwest also is one of the most honored airlines in the world known for its commitment to the triple bottom line of Performance, People, and Planet. To read more about how Southwest is doing its part to be a good citizen, visit southwest.com/cares to read the Southwest Airlines One ReportTM. Based in Dallas, Southwest currently operates more than 3,100 flights a day and has nearly 35,000 Employees systemwide.

DALLAS, Oct 18, 2010 —

Today, Southwest Airlines announced that the airline reached its goal of donating $100,000 to the National Wildlife Refuge Association (NWRA) as a result of its “Help Us Help Them” giving program in which Southwest donated $1 for every EarlyBird Check-In(TM) purchased from Sept. 21, 2010 through Oct. 4, 2010. With the donation from Southwest Airlines, the National Wildlife Refuge Association will:

• Work to permanently protect important wildlife habitat for Gulf Coast species like brown pelicans, seabirds, and sea turtles through land acquisition and conservation easements. This includes important beaches for nesting sea turtles, seabird nesting areas, and warm water springs for West Indian manatees;
• Support habitat restoration work that will clean up soiled habitat and restore marshlands, beaches and uplands that are important for migratory birds, marine mammals and a spectrum of shellfish that are not just important for wildlife, but which serve as an engine of the Gulf Coast economy;
• Build grassroots efforts to continue Gulf Coast recovery efforts over the long term by strengthening volunteer organizations and encouraging volunteer clean-up activities. This includes planting dune grass, cleaning up oil residue and damage, monitoring species recovery, and helping volunteers take action with their local and national representatives to keep fighting for the Gulf;
• Advocate with decision-makers for increases in funding to restore the Gulf and provide needed support for our national wildlife refuges, cornerstones of wildlife conservation in America and premier destinations for people to enjoy wildlife.

“This generous contribution by Southwest Airlines and its many loyal customers will make a difference for the incredible variety of wildlife that call the Gulf home,” said Evan Hirsche, President of the NWRA. “Pelicans, sea turtles, manatees and a great many other species impacted by the oil spill stand to benefit from Southwest’s commitment.”

As the Official Airline of the NWRA, Southwest is proud to support the Association’s goal of conserving America’s wildlife heritage for future generations. To view photos of wildlife efforts and read a blog post, visit www.blogsouthwest.com.

“We are honored and privileged to support the work of the NWRA, and we couldn’t think of a better way to contribute to their efforts in the Gulf and around their refuge system than by donating time and funds,” said Linda Rutherford, Southwest Airlines Vice President of Communication and Strategic Outreach. “We thank our Employees for giving their time to volunteer at refuges, and we thank our Customers for the wonderful response to our EarlyBird Check-In program during this giving period, which made the donation possible.”

The National Wildlife Refuge Association is committed to building strategic relationships that further its goal to strengthen the ecological integrity of our national wildlife refuges and thus ensure a diverse spectrum of plants and wildlife well into the future.

EarlyBird Check-In is a low-cost option (just $10 each way) that gives Southwest Airlines Customers the convenience of automatic flight checkin. EarlyBird Check-In Customers have a better opportunity to select a preferred seat and have greater access to overhead bin storage for carryon luggage than the general boarding Customers. The partnership with the NWRA also commemorates the program’s one-year anniversary.

For more information about the EarlyBird Check-In giving program, visit www.southwest.com. To learn more about the National Wildlife Refuge Association, visit www.refugeassociation.org.

Thu, Oct 14, 2010 – DALLAS – The decision to bring the Boeing 737-800 into the Southwest Airlines fleet moved yet another step closer to reality today as the Board of Directors for the Southwest Airlines Pilots’ Association (SWAPA), representing more than 5,800 Pilots, unanimously approved a tentative agreement reached with the Company. The tentative agreement will now be presented to the full SWAPA membership for a ratification vote.

“Two months ago, we initiated discussions with both our Flight Attendants and Pilots as part of our contractual requirements to operate the-800,” said Mike Van de Ven, Southwest Airlines Executive Vice President and Chief Operating Officer. “Today, I want to congratulate both SWAPA and TWU 556, the Union that represents our Flight Attendants, for recognizing the potential longterm benefits associated with adding the -800 to our fleet. We are still evaluating the needs for training, scheduling, aircraft configuration, and other regulatory considerations, but this is an important step in the due diligence process.”

If approved by a majority vote of the Pilots, their current contract will be extended by one year, becoming amendable August 31, 2012, and also include the potential for wage rate increases based on the Company’s financial performance.
Last month, the Executive Board of the Transport Workers Union (TWU) Local 556, representing more than 9,700 Southwest Flight Attendants, unanimously approved a tentative agreement reached with the Company. The tentative agreement is currently being presented to all members of TWU 556 for a ratification vote.

Southwest Airlines (NYSE: LUV) and the International Brotherhood of Teamsters (IBT) Airlines Division, representing the carrier’s Stock Clerks, announced today that the two parties have reached a tentative agreement. The tentative agreement is for a new, five-year contract through August 16, 2013. The current contract became amendable on August 16, 2008.

Earlier this year, Southwest and the Teamsters agreed to seek assistance from the National Mediation Board through the mediation process as defined by the Railway Labor Act. This current tentative agreement is due to the hard work and dedication of both parties.

“I want to congratulate the negotiation teams for working together to reach this new tentative agreement, which delivers wage and benefit enhancements in exchange for work rule improvements and contract flexibility,” said Mike Van de Ven, Southwest Airlines Executive Vice President and Chief Operating Officer. “These are exciting times at Southwest, and our hard working Stock Clerks play an important role in the future success of this great Company.”
In the upcoming weeks, the IBT membership will be given the full details of the agreement and have the opportunity to vote on ratification. IBT represents more than 170 Southwest Airlines Employees.

Southwest Airlines is celebrating workplace diversity by hosting its first Diversity Summit today themed “Join the Conversation.” The Summit will gather executives from North Texas local Fortune 500 companies to dialogue about diversity and inclusion initiatives, fostering new opportunities, and expanding best practices.

Joining the conversation as keynote speaker is Dr. George C. Wright, President, Prairie View A&M University. Dr. Wright will be sharing his personal diversity journey and the impact it has had on his life. The Summit will focus on dialogue, education, and strengthening relationships to support an ever-changing workforce. The Summit also will provide participants with a workshop hosted by Pamela Tegarden, founder of the Soluna Institute, about raising the tide on gender diversity, and Tegwin Pulley, who will discuss, “Diversity, Employees, and the Bottom Line.”

“We are thrilled to be hosting the first Southwest Airlines Diversity Summit in our hometown of Dallas. The purpose of this Summit is to listen and learn about diversity and inclusion best practices through open dialogue and interactive workshops,” said Linda Rutherford, Southwest’s Vice President Communication and Strategic Outreach. “A modern and diverse workforce is a key competitive advantage in the national marketplace. Southwest Airlines has an outstanding network of more than 35,000 Employees systemwide in 35 states, and growing.”

The Southwest Airlines Diversity Summit was created and hosted by the airline’s Corporate Diversity Council. This Council is comprised of Southwest Employees who meet every month to improve the recruitment and advancement of women and minorities, increase supplier diversity,educate/train “Respecting Differences” consistent with meeting our Company’s business objectives, and create awareness of and show appreciation for cultural or lifestyle differences within our diverse workforce. This year, Hispanic Business Magazine named Southwest Airlines as one of the top Elite companies for Diversity.

DALLAS, Sept 27, 2010

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.

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.

Terms of the Agreement

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. The number of shares to be issued by Southwest Airlines is subject to adjustment if the average of Southwest Airlines closing prices for the 20 trading days ending three trading days prior to closing is below $10.90 or above $12.46. This adjustment mechanism is intended to provide at least $7.25 in value and up to $7.75 in value per share of AirTran common stock. If the average closing price noted above exceeds $12.46, the value will be $7.75 with fewer shares of Southwest common stock issued. If the average closing price noted above is less than $10.90, the value will be $7.25 with additional shares of Southwest common stock issued. Additionally, Southwest Airlines has the option of substituting cash in lieu of issuing incremental shares if the average closing stock price is less than $10.90. Assuming an exchange ratio of 0.321 and the conversion of AirTran’s outstanding convertible notes, AirTran stockholders would receive approximately 57 million shares of Southwest Airlines common stock, which represents approximately seven percent of the pro forma Southwest Airlines common shares outstanding, as well as approximately $670 million in cash.

Citigroup Global Markets Inc. and Dahlman Rose & Company acted as financial advisors to Southwest Airlines. Vinson & Elkins L.L.P. acted as legal counsel to Southwest Airlines.