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by Michael J. Shapiro | September 29, 2010

Southwest Airlines announced on Monday a $1.4 billion deal to acquire low-cost carrier AirTran Airways. The boards of directors of both companies have unanimously approved the agreement, and closing is now subject to the approval of AirTran stockholders and regulatory clearances. Southwest executives expect government approval in the first half of 2011. By acquiring AirTran’s routes, Southwest will gain access to Atlanta’s Hartsfield-Jackson International Airport and Reagan Washington National Airport, as well as boost its presence in New York’s LaGuardia and Boston’s Logan airports. In addition to adding new access to smaller domestic cities, the acquisition also will give Southwest its first Caribbean and Mexican routes — to Aruba, Cancún, Mexico and San Juan, Puerto Rico. The two airlines will continue to operate independently until all approvals have been received.