AC

Southwest, which flies more domestic passengers than any other U.S. airline, is going international. The airline is picking up AirTran's flights to Mexico and the Caribbean after buying its rival last year. It's getting a new reservations system to handle overseas bookings and is seeking to build an international terminal at Houston's Hobby Airport, where it says it could ultimately add 25 flights abroad a day. Building an international presence is a significant shift for Southwest, which flew to success by focusing on reliable, low-fare service within the U.S. And it's another sign that the one-time niche carrier is increasingly competing on the same turf as the big network airlines, the so-called legacy carriers, such as United, Delta and American. "Flying into more congested markets, now trying to go overseas … it seems like they're becoming a legacy carrier," says Basili Alukos, an airline analyst at Morningstar. But, he adds, if Southwest can replicate its domestic network...