Earlier this week, the largest U.S. low-cost carrier Southwest Airlines announced the successful acquisition of AirTran Holdings, the former parent company of AirTran Airways (AirTran). The acquisition allows the company to extend its reach to new key markets such as Atlanta and Washington, D.C., providing opportunity to serve more than 100 million customers annually from more than 100 different airports.

According to Gary Kelly, CEO, Chairman, and President of Southwest Airlines, the timing couldn’t have been any more important. He believes Southwest brings the profitability and financial strength necessary to make the deal feasible, positioning the combined companies with an industry-leading investment grade balance sheet to “weather the energy-price storm“.

Excluding the impact of one-time acquisition and integration costs, the acquisition is expected to be accretive to Southwest Airlines pro forma fully-diluted earnings per share in the first twelve months and strongly accretive once net synergies are fully realized. Net annual synergies are expected to top $400 million by 2013.

AirTran will continue to operate under its own brand name until the two company’s operations are fully integrated, which is expected in 2013.

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