Did some more research and slept on the Southwest/AirTran announcement. Let’s just say, there are a lot of subtle ramifications to this. So here’s a Q&A to try to explain what’s up, and how it may affect Charlotte and the Carolinas.

Q. Why is Southwest Airlines buying AirTran Airways?
A. Couple of reasons. Southwest is weak in the eastern U.S. in general and the southeast in particular. AirTran’s biggest operation is in Atlanta, and will fill that hole. Also, buying AirTran strengthens Southwest in Baltimore, Boston and LaGuardia and gets Southwest into Reagan National.

Q. Why is AirTran selling?
A. Limited growth prospects. They are profitable (for now) but nobody can really figure out what they are trying to do.

Q. How well do the two airlines’ business models match?
A. Somewhat. Both are low-fare carriers. But there are also a lot of differences. AirTran offers assigned seating and has business class. Southwest does not and the combined carrier will not. AirTran flies internationally. Southwest doesn’t currently. AirTran is willing to fly to serve domestic markets with as little as three flights a week; for Southwest the buying is more like eight flights a day.

Q. How many destinations do the two airlines serve?
A. Southwest currently serves 69 destinations and has announced plans for three more (Newark, Charleston, SC, Greenville-Spartanburg). AirTran flies to 32 of those destinations — plus 38 places Southwest doesn’t serve.

Q. 38 destinations?
A. Yup, though you might want to think of it as Atlanta and Reagan National plus 36 other places. ATL and DCA are clearly mentioned in the merger press information, the others aren’t. Charlotte’s the biggest market of the other 36.

Q. How many of those other 36 stay and how many would Southwest drop?
A. That’s one of the big unanswered questions at this stage. Southwest claims that they would keep most if not all except for Dallas/Ft. Worth (which they are not allowed to serve) but they would say that at this stage. The helpful aspect is that virtually all the unique to AirTran destinations have service to ATL, BWI, or MCO, are of which would be big anyway for the combined carrier. That said, some are small and some are near existing Southwest stations, and are likely to be cut.

Q. How many flights a day do these unique to AirTran destinations have?
A. Typically three to five, though eight aren’t even daily.

Q. If Southwest decided to keep a destination, would it also add flights and destinations?
A. In many cases, almost certainly yes. And to name names, Chicago Midway, St. Louis (for places in the Midwest), and Tampa are high up on the list of possible additions.

Q. What’s kept Southwest from coming to Charlotte in the past?
A. Businesses rarely state why they aren’t coming to town. That said, Charlotte is easily big enough, airport delays are not a factor, and CLT is cheap to operate out of. The constraint is thought to be gate availability and/or the market’s competitive climate plus Southwest having bigger fish to fry.

Q. Isn’t Southwest mainly a point-to-point operation that has no hubs?
A. Wrong. Particularly in the eastern U.S., Southwest has a number of focus cities that also allow for connections. The largest of these, Midway, Las Vegas, Phoenix, Denver, and Baltimore, act as de facto rolling hubs. Overall, think of it as several small hubs rather than one or two huge hubs. This service pattern makes it pretty easy to predict where Southwest will fly to from a particular city.

Q. Is there a model for what possible Southwest service from CLT might look like?
A. Yes. It’s the airline’s service to Raleigh/Durham, which is a pretty similar market. Over this past summer, the airline offered 31 flights a day from RDU:

7 x Baltimore (6 x since August)
4 x Chicago Midway (3 x since August)
1 x Denver
1 x Ft. Lauderdale
1 x Las Vegas
4 x Nashville
4 x Orlando (3 x August – March)
4 x Philadelphia (3 x November – March)
1 x Phoenix
1 x St. Louis
3 x Tampa

AirTran had four or flights a day to Atlanta.

Q. How many AirTran flights are there to Charlotte now?
A. A total of five to Atlanta, Baltimore, and Orlando. It was up to seven over the summer.

Q. Didn’t AirTran use to have more flights from Charlotte?
A. Yes. They have had as many as 11 flights a day in the past.

Q. So what’s the maximum limit on Southwest flights from CLT?
A. AirTran has access to two gates on A Concourse, which would allow Southwest to have as many as 18 to 20 flights a day from Charlotte.

Q. What destinations?
A. Baltimore and Atlanta are givens and at higher frequencies than is currently the case. Orlando and Tampa are likely. You may well see one flight a day to one or more of Denver, Las Vegas, and Phoenix eventually. The big question marks are Midway, Nashville, and Philly. Hard to get those all in given the gate limit. Not sure they would all work in any case.

Q. Is it certain that Southwest will soon have 15 to 20 flights a day from CLT?
A. No. They could easily operate fewer flights. They have a lot on their plate and aircraft availability will be at a premium.

Q. What existing big Southwest operation is most likely to be negatively affected by the merger?
A. Nashville is vulnerable. Atlanta could easily take over the connecting function that Nashville now performs.

Q. When does the gate limit to Southwest growth at CLT disappear?
A. Not soon. A, C, and D concourses are all built out. Jerry Orr may talk about an E Concourse extension as an answer, but it isn’t. B Concourse could be extended, adding gates for US Airways mainline but also perhaps allowing United to move over there, and thus freeing up gates on A for Southwest. Whether US Airways goes along with that remains to be seen. Beyond that, a new international concourse is planned, which would free up gates on D. This though is five years or so out.

Q. Any chance Southwest turns CLT into one of its focus cities?
A. It’s extremely unlikely. They already have enough big stations relatively nearby — Atlanta, Baltimore, Nashville, Orlando, and Tampa.

Q. Will Southwest acquiring AirTran lower fares out of CLT?
A. Maybe. A lot depends on how many flights a day they offer. Fares out of Charlotte are a bit above average (14th highest of 127 top airports in 1Q2010) but are no longer absurdly high, thanks in part to AirTran and jetBlue. At best a few percentage point drop could happen, though some analysts question if even that will come about. Note that a big part of AirTran’s problem is attracting high-yield passengers. CLT-BWI fares, for example, are already in the basement.

Q. Can US Airways effectively compete in Charlotte after Southwest comes to the town? Or is this the beginning of the end of US Airway’s hub here?
A. Neither Southwest nor AirTran have been able to make much headway in Philadelphia, which is pretty much just a big spoke plus a few Florida cities and a couple other odds and ends. There’s no reason to expect the merged carriers to be able to undermine US Airways here.

Q. Didn’t Southwest announce they were going to serve Charleston, SC and Greenville/Spartanburg? What’s up with that?
A. Good question. Back on May 11, Southwest announced they would begin service to GSP and CHS in 2011. They did not give an exact date though nor announce where they would fly to from those two cities. Since then, Southwest has announced Newark with a define start date (March). Not sure it makes sense to begin service to GSP and/or CHS until after the merger as Atlanta may well be critical to serving both destinations.

Q. Doesn’t AirTran serve Asheville?
A. Yes, it does. It flies five times a week to Orlando and offers no connections beyond Orlando. Whether this service survives most merger is extremely questionable. It’s not that far from AVL to GSP, and neither is exactly a huge market, so it could easily be one or the other. Probably GSP though.

Q. Any chance Southwest comes to Greensboro any time soon?
A. No. Too much on their plate and they have GSO bracketed on either side.