Will Southwest-AirTran deal lead to higher fares?

Plenty of airline executives have been chirping about Southwest Airlines' pending $1.4 billion purchase of AirTran, and some who don't earn paychecks from Southwest or AirTran have suggested the deal will lead to higher fares.

A Raymond James analyst put the question directly to Southwest CEO Gary Kelly in a conference call Oct. 21, saying the "acquisition was characterized on another call as a high-cost airline purchasing a low-cost airline and that the only way synergies could be delivered would be for fares to go up."

"That was a joke," Kelly scoffed. "It was a joke."

"Our strategy is to keep our fares low, continue to be the low-fare leader in the United States, not nickel and dime our customers," he said. "So it is not our plan to convert ourselves from a low-fare carrier to a high-fare carrier. You won't see that happen."

Another analyst came back to the topic a few minutes later, suggesting legacy carriers prefer to compete against Southwest because it is "relatively rational" in its approach when compared to smaller players such as AirTran.

"I don't know, I hope they get their pick there," Kelly responded. "If we get this deal closed, we can give them what they want, which is more competition."