Several investigations on behalf of investors of AirTran Holdings, Inc. (NYSE:AAI) over potential breach of fiduciary duties by the AAI board of directors in connection with the proposed takeover of AirTran Holdings, Inc. by Southwest Airlines Co. were announced.

The investigation by a law firm concerns whether AirTran Holdings, Inc. and its Board breached their fiduciary duties owed to AAI investors in connection with the proposed takeover.

AirTran Holdings, Inc., located in Orlando, Florida, conducts all of its flight operations through its wholly owned subsidiary, AirTran Airways, Inc. On Monday, September 27, 2010, AirTran Holdings, Inc. (NYSE: AAI) announced that it has entered into an merger agreement to be acquired by Southwest Airlines (NYSE: LUV) in a transaction currently valued at more than $1.37 billion. Including existing AirTran Holdings, Inc., indebtedness and capitalized aircraft operating leases, the aggregate transaction value is approximately $3.42 billion. Under the terms of the agreement, shareholders of AirTran Holdings, Inc., will receive a combination of Southwest Airlines common stock and cash valued between $7.25 and $7.75, depending upon the average trading price of Southwest stock for a 20 trading day period to and including three trading days prior to the closing of the merger. At least $3.75 of the merger consideration will be in cash. Based on Southwest Airlines' closing share price as of September 24, 2010, the value of the merger consideration would be $7.69 per AirTran share. According to AirTran Holdings, Inc. its board of directors approved the merger agreement and based on Southwest Airlines' closing share price as of September 24, 2010, the offer represents a 69 percent premium over the September 24, 2010, closing price of AirTran stock.

But AirTran Holdings has been performing admirably. AirTran Holdings total revenue increased from $1.89208billion in 2006 to $2.34144billion in 2009 and its Net Income increased by almost 10 times from $14.71million in 2006 to $134.66 reported in 2009.

AirTran Holdings shares traded at $4.50 per share before increasing to its current 52weekHigh of $7.34 per share in response to the takeover announcement. But at least one analyst set a price target for AirTran stock at $11.00 per share and AAI shares traded during several months in 2009 within the currently offered price. During 2008 AirTran Holdings shares traded as high as $9.05, in 2007 at almost $13 per share, and during 06 and 03 several times above $17 per share.

Thus the investigations by law firms concern whether the AirTran Holdings, Inc. Board of Directors breached their fiduciary duties to AirTran Holdings, Inc. (NYSE:AAI) stockholders by failing to undertake an adequate and fair sales process, specifically adequately shop AirTran Holdings, Inc. before entering into the transaction, and whether the proposed transaction undervalues AirTran Holdings, Inc. (NYSE:AAI) shares and by how much this proposed transaction undervalues the Company to the detriment of AirTran Holdings, Inc. (AAI) shareholders.