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Southwest, Delta, Boeing Reach Pact on AirTran Boeing 717 Fleet
July 10, 2012

Southwest Airlines and its subsidiary, AirTran Airways, have reached an agreement with Delta Air Lines and Boeing Capital Corp. to lease or sublease all 88 of AirTran's Boeing 717 aircraft to Delta. Southwest will transition approximately three 717 aircraft per month beginning August 2013.

By reaching this agreement, Southwest will avoid converting the AirTran 717 fleet into Southwest as part of the AirTran integration. Southwest’s aircraft rent expense associated with Boeing 717s will be eliminated as each aircraft is transitioned to Delta.

Southwest’s total estimated AirTran acquisition and integration costs are expected to increase by approximately $50 million as a result of the aircraft transition costs assumed by the airline as part of this 717 agreement.

Southwest’s annual pre-tax results are expected to benefit by approximately $200 million, after all Boeing 717s are transitioned to Delta and replaced with Boeing 737s.

Accounting for this third quarter transaction will be discussed during the Southwest’s second quarter financial results conference call.

Source :- http://www.travelpulse.com/