The plan by Southwest Airlines Co. to acquire AirTran Holdings Inc. has been approved by the Federal Aviation Administration, according to Southwest. The two airlines will combine operations once the acquisition is completed.

Southwest's plan is for AirTran pilots, flight attendants, mechanics and other flight-related workers to maintain their AirTran employment status for the time being. The intention is that AirTran employees will become Southwest employees once a single operating certificate is issued for the new combined carrier.

Southwest has consistently been the leader among low-fare airlines. The acquisition of AirTran will give the Dallas-based company a greater presence in markets such as Washington DC and Atlanta. The purchase of AirTran is expected to close in the second quarter of 2011. The deal still has regulatory hurdles to get over, and is subject to shareholder approval.

How AirTran pilots and Southwest pilots will be reconciled to a combined operation is the subject of discussions with the pilots union. Southwest says it has established a framework with the union for integrating AirTran pilots into the company post-acquisition.

San Diego mergers and acquisitions attorneys noted that shares of Southwest were up 8 cents, or 0.7 percent, to $11.77 in afternoon trading. AirTran was flat at $7.32.

Source: Reuters "Southwest says FAA clears AirTran transition plan" 2/24/2011