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How Southwest Merger Will Affect Ticket Prices

Southwest Buyout of AirTran: Watch Those Ticket Prices

What's the big deal about Southwest's $1.4 billion buyout of fellow budget airline AirTran? Well, there are several outcomes that may affect consumers. On one hand, there will be less competition in the market if airlines keep consolidating (Continental and United are to merge by the end of this year). Fewer players in the field means less incentive for airlines to keep ticket prices low to compete.

On the other hand, the Southwest merger might mean that the company will have a bigger edge against large firms like United because of entry to untapped markets. They will have to compete with the budget airlines, which can drive down the fares of the larger companies. Meanwhile, keep your eye on the developments because great deals may surface from this!

Source: Getty
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