Southwest competes on cost, and this cost position hinges in large part on the rapid turnaround of aircraft. Rapid turnaround lowers Southwest's equipment and labor costs; its aircraft, pilots, and flight attendants are "doing work" for longer periods of time each day (rather than sitting idle on the ground).
A variety of activities contribute to Southwest's ability to rapidly turnaround aircraft, but some of the key activities include:
- Southwest's culture, where everyone pitches in to turnaround aircraft
- Using a single type of aircraft (737s), enabling simplified service and maintenance
- The point to point route structure, avoiding the issue of synching the schedules of hub and spoke aircraft
- Operating at less congested airports to avoid traffic delays
From my vantage point, it seems the AirTran acquisition threatens each of these activities:
- Integrating AirTran's distinct culture with Southwest's
- Expanding beyond 737s to operate 717s
- Divergence from the point to point structure to a hub and spoke
- Entry into congested airports, such as Hartsfield-Jackson (ATL), which was ranked #20 in 2010 for on-time departure performance by the Bureau of Transportation Statistics
In short, this acquisition is problematic from a strategic standpoint and appears to threaten the basis of Southwest's cost advantage.