Leading global passenger air service provider
) announced plans of combining its existing call center operation
in Atlanta and two other in Georgia to form a single unit, which
will be located in Atlanta
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These three units were part of AirTran Holdings - that was
acquired by Southwest Airlines in May last year and now operates
as a wholly owned subsidiary under the name, AirTran Airways.
The new Atlanta Customer Support & Services (CS&S) Call
Center, located in the AirTran Corporate Center (ACC) in College
Park, will be Southwest Airlines' first call center in the
Eastern Time Zone and seventh across the U.S. The other six
centers are based in Oklahoma City, San Antonio, Phoenix,
Houston, Chicago and Albuquerque.
The to-be opened center in Atlanta will become operational from
May 2013 and will handle all AirTran Airways calls in the initial
level. Thereafter, the center will also start looking after the
Southwest Customer calls.
With the expected shut-down of the Carrollton and Savannah Call
Centers on July 31, 2013, Southwest Airlines will offer job
opportunities in the new unit to all the employees of the two
This move on the company's part highlights the initiatives to
integrate its business lines with AirTran as well as extend
superior customers services in the Atlanta region.
The merger of Southwest Airlines with AirTran is expected to be
accretive to Southwest's earnings in the upcoming quarters and
will be on the rise when realized fully. The transaction is
expected to generate net synergies of more than $400 million by
2013 on full integration.
We also expect the company to register healthy revenue growth in
the coming months, owing to its cost leadership position, strong
balance sheet, low cost, flexibility, network optimization and
fleet modernization. The company is also adding novel features to
its services as well as introducing new products, which are
enhancing its value and profitability.
Nevertheless, high operating costs like fuel, maintenance,
salaries, wages and airport fees, new advertising policy along
with heavy investments are expected to limit the upside potential
of the stock. Competitive threats are also prevalent as Southwest
Airlines exists in an industry along with heavyweights like
Delta Air Lines Inc.
Dallas, Texas based Southwest Airlines currently retains a Zacks
#3 Rank (short-term Hold rating). We also maintain a long-term
Neutral recommendation on the stock.