Ed Butowsky: Southwest Airlines Becomes Bigger & More Powerful

on Sep 27, 2010 in FrontPage, Media Center, NBC by Ed Butowsky | 1 Comment »

Ed Butowsky, Managing Partner of Chapwood Investments Management, joins NBC news at 6 to discuss the impact of Southwest Airlines buyout of AirTran Airlines.

Southwest Airlines, the low fare leader, announced Monday, September 27, 2010, their intent to buyout AirTran Airlines for $1.4 billion. The buyout would mean that Southwest Airlines would reduce it’s competition. The AirTran acquisition would increase the number of airports Southwest could reach by +25%. Included in this is increase is new international destinations. With word of the acquisition Southwest stock rose 10% and AirTran rose 60%. Undoubtedly this will mean more airplanes, more routes, more passengers, and of course more profits. Will this buyout mean more lower fares?

Ed Butowsky is quick to point out that this merger does not mean lower ticket prices. Reducing the competition is never good for consumers, but more troubling is the rising cost of oil. Ed believes that ticket prices will go much higher because of the cost of oil. However, in light of these facts, travelers will have more choices on Southwest than before.

How long will this merger take? Review and approval of this acquisition starts in the justice department which could take months. Beyond that Southwest believes it could take up to two years before all of AirTran is converted over to Southwest.


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One Response to "Ed Butowsky: Southwest Airlines Becomes Bigger & More Powerful"

  1. Forman says:

    Keep the faith, my Internet friend; You are a first-class writer and deserve to be heard.

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About Ed

Ed Butowsky is a nationally-recognized expert in investment management. Butowsky has been in the financial services industry for over 22 years. He was previously a Senior Vice President at Morgan Stanley and a Managing Director ... More »

Contact

Ed Butowsky, Managing Partner
Chapwood Capital Investment Management, LLC
Website: www.chapwoodinvestments.com
Email: ed@chapwoodinvestments.com
Phone: (972) 865-2225