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Southwest will pay about $670 million with available cash. Southwest will assume $2 billion in AirTran debt.

Southwest and AirTran said the new airline will operate from more than 100 airports and serve more than 100 million customers.

In April, AirTran Holdings Inc. CEO Robert Fornaro signaled his interest in making a deal, saying the airline would consider a combination with another carrier if approached and if such a deal made sense for the company and shareholders.

But when asked by the Associated Press who might be a potential suitor for AirTran, Mr. Fornaro said, “I’m not sure that we’re necessarily a natural fit to be gobbled up by somebody else.”

AirTran would be Southwest’s largest acquisition by a wide margin. The company, which began with a handful of planes hopping among three Texas cities in the early 1970s, bought Morris Air and Muse Air in the mid-1980s. Two years ago, Southwest bought assets of ATA Airlines out of bankruptcy, which gave Southwest an opening to serve New York with ATA’s takeoff and landing slots at LaGuardia Airport.

AP airlines writer David Koenig in Dallas and business writer Michelle Chapman in New York contributed to this report.