Airline ETF Flying On Merger News

September 27th at 12:00pm by Tom Lydon

Southwest Airlines (NYSE: LUV) is going shopping, and the move is said by some to be potentially transformational for the carrier and the airline exchange traded fund (ETF).

Discount carrier Southwest has announced plans to buy its low-fare rival AirTran (NYSE: AAI) for $1.4 billion. Doug Cameron and Tess Stynes for The Wall Street Journal report that the deal will take Southwest into new areas, including Atlanta, as well as smaller cities and international destinations. [Airline ETF Finds Friendly Skies.]

The deal is the first between any major low-cost carriers  in the United States. The finalization of the process could take about two years and it also still needs to be approved by both shareholders and competition authorities. [4 Bullish Signs For Transportation ETFs.]

  • Claymore/NYSE Arca Airline (NYSEArca: FAA): Southwest is 15%; Airtran is 3.3%

FAA, Airline ETF, Southwest

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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