Dallas-based Southwest Airlines today announced it will buy AirTran for about $1.42 billion.
The move will put Dallas-based Southwest in head-to-head competition with Delta Air Lines -- in Delta's home base of Atlanta.
The buyout, funded mostly with debt, will also give Southwest a bigger slice of the market in cities like Boston and New York.
AirTran -- besides its base in Atlanta -- has hubs in Milwaukee and Orlando.
Southwest's acquisition of AirTran is expected to close in the first half of next year. It requires both regulatory and shareholder approval. The airlines expect to fully blend their operations in 2012.
Southwest tried unsuccessfully last year to buy Frontier Airlines out of bankruptcy. Republic Airways Holdings won the auction for Frontier last August, buying the Denver-based carrier for almost $108.8 million.
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