Southwest Airlines, Delta Air Lines, And Boeing Capital Reach A Tentative Agreement To Sublease AirTran Boeing 717 Fleet
DALLAS, May 22, 2012 /PRNewswire/ -- Southwest Airlines (LUV) (NYSE: LUV) confirmed today that the airline, together with its subsidiary, AirTran Airways, Inc., has reached a tentative agreement with Delta Air Lines, Inc., and Boeing Capital Corp., to sublease all 88 of its Boeing 717 aircraft to Delta. A final agreement is subject to Delta and Southwest reaching certain agreements with all parties related to the aircraft leases. The tentative agreement between Southwest and Delta would transition the 717s over three years starting in the second half of 2013 with completion in 2015.
"This is a very complex transaction that requires time and close coordination with multiple parties. While we do have a tentative agreement with Delta, final details must be completed with all parties before a binding agreement between Delta and Southwest can be completed," said Mike Van de Ven, Southwest Airlines' Executive Vice President and Chief Operating Officer.
A transition of the 717s was an option that the airline acknowledged when it executed its fleet agreement with the Boeing Co. The plan calls for the transition of approximately three 717 aircraft per month beginning in mid-2013. Southwest is not releasing any additional details about the tentative agreement at this time. The Company currently plans to keep the total fleet count relatively flat as the 717s transition to Delta.
Southwest's plans to integrate current AirTran Employees into the Southwest operation over the next several years remain unchanged. All Pilots would train and transition directly into the airline's 737 fleet as the 717s are reduced. AirTran Flight Attendants and Maintenance personnel are currently trained on both aircraft types. Southwest would replace AirTran's 717 flying with 737 aircraft, and would work with individual airports on facilities transition timelines. Southwest affirms its current plans to maintain service to all previously announced airports.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements regarding (i) Southwest's and AirTran's tentative agreement to sublease Boeing 717 aircraft to Delta Air Lines; (ii) the anticipated timeframes and benefits associated with the subleases; (iii) Southwest's overall fleet plans; and (iv) Southwest's plans and expectations with respect to its acquisition of AirTran, including without limitation anticipated integration timeframes and employee matters. 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 ability of Southwest, AirTran, and Delta to reach a final agreement with respect to the subleases; (ii) the parties' dependence upon third parties with respect to the transaction, (iii) Southwest's ability to successfully integrate AirTran and its employees; (iv) the impact of governmental and other regulation related to Southwest's operations and the subleases, as well as Southwest's and AirTran's ability to obtain any required governmental or other approvals; (v ) the impact of fuel prices, economic conditions, and actions of competitors on the Company's business decisions, plans, and strategies; and (vi) other factors, as described in Southwest's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in Southwest's Annual Report on capitalized form 10-K for the fiscal year ended December 31, 2011.
About Southwest Airlines
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 and has acquired AirTran Airways, now a wholly owned subsidiary of Southwest Airlines Co. Southwest serves 73 cities in 38 states and remains 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/citizenship to read the Southwest Airlines One Report". Based in Dallas, Southwest currently operates more than 3,300 flights a day and has more than 39,000 Employees systemwide.
About AirTran Airways
AirTran Airways, a wholly owned subsidiary of Southwest Airlines Co., was named the top airline in the 2012 Airline Quality Rating study and has achieved that ranking three times in the past five years. AirTran offers coast-to-coast service on North America's newest all-Boeing fleet. The airline's low-cost, high-quality product also includes assigned seating and Business Class.
SOURCE Southwest Airlines