AirTran Expects Profit every Quarter this year

[Eagle757shark]

ATLANTA (AP) - AirTran Airways expects to be profitable in every quarter this year, despite the weak economy and how it has impacted revenue, Chief Executive Robert Fornaro said Monday.
"I think that will be a rarity among carriers," Fornaro said at the Raymond James Institutional Investors Conference, which was webcast on the Internet.
Fornaro said that unit revenue is currently being hit more than previously expected, but he noted AirTran expects to have a strong April because of the Easter holiday.
He reiterated that the airline will cut capacity about 4 percent this year, capacity will be flat next year and the airline, a unit of Orlando, Fla.-based AirTran Holdings Inc., expects to grow in 2011.
Fornaro said AirTran has been able to maintain a low-cost advantage over competitors even though it has been shrinking.
He also predicted that global carriers will take more of the brunt of the recession than AirTran.
Fornaro said AirTran believes it can grow in Midwest Airlines' home base of Milwaukee without Midwest under its wing. He also cited the weak economy and how it has affected Midwest.
"We're very glad we were unsuccessful with that purchase," Fornaro said. He added, "The opportunity to expand in Milwaukee will be a very good one for us. We didn't have to buy that company. The opportunity is out there because of the poor economy."
AirTran made a hostile takeover bid of $78 million for Midwest in June 2005. AirTran raised its offer several times, topping out with an offer worth an estimated $445 million when it was made in August 2007. Each time, its offer was rejected.
Midwest ultimately agreed to be sold to private equity firm TPG Capital for about $450 million.
Fornaro said Monday that AirTran expects its Milwaukee service to soon account for roughly 10 percent of its overall capacity.

 

[tubelcane]

Well I certainly hope we can make money with full airplanes, oil below $50 a barrel and near bottom of the industry cost structures! If we don't make money this year, and a hell of a lot of it we need regime change in Orlando!

 

[maxblast72]

Total RASM guidance (including ancillary fees like bag fees) now down 2-3.5% for Q1 and an all in hedge included $1.60-$1.65/gallon for the Jet A. Will be a really good year for Airtran as people continue to look for value services during economically slow times. Very similar to 2002-2003 for Airtran Airways except the growth will be a little slower due to tougher revenue environment.

The only bad news for pilots is we are only projecting to end 2011 with 139-143 airplanes in the fleet (vs the current 136). That means late 2004 new hires will probably be the most junior CAs on the property at the end of 2011 (we will have FOs on 8th year pay scale as we go into 2012).

 

[Lear70]

Hey, you've GOT to be kidding me! Really? 8th year F/O's? No way.

I mean, Allen, Klaus, and Kolski all said we'd be Captains in 4 years, right? No reason to worry about pay raises for the F/O's and Scope issues, right?

Nothing to see here, pay no attention to the man behind the curtain....

 

[Murphy]

And one BoD member trumpeted that three year upgrade time as a reason to vote for the TAs and now he signed up for a Leave Of Absence. Guess the grass was greener at some place other than AirTran. We all remember well that letter of endorsement for the TA.

 

[turbodriver]

At least your furloughs were out for what, 4 months?

Another negotiating ploy I assume.....

 

[hairball1173]

I think its such a moving target that no body knows. I don't even want to tell what was said to me in new hire class and then BAMB!!!!! Oil hits 147 and on 4/7 they cancel all new hires classes etc. Upgrad, reserve, all a moving target.

 

[Lear70]

The classic line was "All of you are going to come back one time for recurrent as F/O's, then the next time we see you, you'll be upgrading to Captain".

Were they still spewing this stuff just a year ago? uke:

 

[maxblast72]

At least your furloughs were out for what, 4 months?

Another negotiating ploy I assume.....

Furloughs out 5-7 months depending on seniority. Actually not a negotiating ploy here at Airtran. We were burning alot of cash last July as Jet A went over $4/gallon (when the furlough decision was made). At Airtran, fuel peaked at over 50% of our operating cost which is the highest in the industry. Having the most sensitive to fuel price business model in the industry, we struggled in 2008 but turned the corner quickly in 2009 and are now predicting a profit every quarter this year.

 

[Colonel Savage]

What percentage of your total fuel requirement is currently hedged @ $40/bbl?

 

[tubelcane]

I heard we are hedged at $60 per barrel going forward. Not sure how far forward or if this is even true. My source said Fornaro personally told him this.

 

[Colonel Savage]

I heard we are hedged at $60 per barrel going forward. Not sure how far forward or if this is even true. My source said Fornaro personally told him this.

OK, Thanks...

 

[maxblast72]

35% hedged for 2009. If oil at $40/barrel, we pay $51/barrel for 35% of our fuel. If oil at $60, we pay $66 and if oil at $80, we pay $71. These numbers are off Fornaro's powerpoint presentation this week. It looks like benefit kicks in around $70/barrel (on 35%).

Other good news is crack spread has come down to $6/barrel in March 2009 after averaging $25/barrel for 2008.

 

[scarlet]

Dont worry ALPA will be here and we will have unity and a contract in 6 months, because ALPA and all their resources that was used at Midex,TWA,UAL,Comair,ASA,Mesa,Spirit,Eagle(15yrs).

Alpa=Please do not look at our past to judge our future. Our mgt team has never dealt with ALPA before!

 

[Lear70]

Poor Scarlet, always on the outside of the group looking in.

When the majority disagree with you, the majority of the time, I submit that it might be time for a little self-examination of yourself? Your goals? Your priorities?

85%+ of the pilot group (my prediction on ALPA vote outcome) can't be all wrong, my friend. Just a thought...

 

[twepilot]

high % of herd mentality will get alpo elected.

RV

 

[Lear70]

high % of herd mentality will get alpo elected.

RV

Or it *could* be the high % of people fed up with the repeated abuse from management and the NPA seemingly unable to rally the pilot group to begin the "hard fight" that needs to happen.

I've said it once and I'll say it again. Without a strike, or at least the very REAL threat of one, including the funds to accomplish it, the will of the pilot group to accomplish it, the preparation of union leadership for it, then finally, when ready, being released into self-help and the clock starting, management will do NOTHING towards getting a REAL contract with REAL improvements and not trading away 2 things we need for every 1 thing we get back.

Something has to change, and the anti-ALPA crowd has yet to provide a clear, concise plan for accomplishing the above goals, or even that they are INTERESTED in doing anything but bending over and taking whatever the company gives.

THAT'S why the ALPA merger is going to be ratified. The big question is, will the new MEC be aggressive, proactive, and as openly-communicative as they have in the last week and, even more, moving forward? If they won't, it'll be the same old "recall after 1 year" thing we've already had. If they will, all this angst will have been worth it.

 

[Smarta$$]

Dont worry ALPA will be here and we will have unity and a contract in 6 months, because ALPA and all their resources that was used at Midex,TWA,UAL,Comair,ASA,Mesa,Spirit,Eagle(15yrs).

Alpa=Please do not look at our past to judge our future. Our mgt team has never dealt with ALPA before!

Said the Gojet scum.

 

[Eagle757shark]

high % of herd mentality will get alpo elected.

RV

So twepilot and Scarlet what do you suggest? What ideas do you have? What is your involvement? The NPA is broken and has become ineffective. The herd sees that and is tired of it! ALPA is not perfect, but I believe it has the chance to be better than what we have currently.

 

[Clyde Frog]

No reply, as expected.

 

[Clyde Frog]

I've said it once and I'll say it again. Without a strike, or at least the very REAL threat of one, including the funds to accomplish it, the will of the pilot group to accomplish it, the preparation of union leadership for it, then finally, when ready, being released into self-help and the clock starting, management will do NOTHING towards getting a REAL contract with REAL improvements and not trading away 2 things we need for every 1 thing we get back..

Damn right!

 

[maxblast72]

So twepilot and Scarlet what do you suggest? What ideas do you have? What is your involvement? The NPA is broken and has become ineffective. The herd sees that and is tired of it! ALPA is not perfect, but I believe it has the chance to be better than what we have currently.

Don't expect any answers from TWEpilot. TWEpilot doesn't mind status quo. He works 14 or 15 days a month, pulls in $150K/year, and enjoys another $16K/year in B-fund contributions. Why rock the boat for the junior guys making $70-80/K year for the next 5-7 years? TWE got his 6 figure W-2 by year 3. He doesn't understand what is wrong. Those junior guys help keep Airtran nonfuel CASM the best in the industry. B-scale only worked at American until they hired so many pilots that the B-scale guys outnumbered the A-scale guys. TWEpilot is part of the A-scale crowd while the rest of us are on the B-scale. There is a limited number of A-scale guys at Airtran that even give a crap about the B-scale guys.

The junior guys voted down TA2, the junior guys recalled our senior former union president (and associated NC chair), and the junior guys are voting in ALPA. TWEpilot hasn't figured it out yet. The B-scale is going to go away in contract 2009, or we will not get a new contract period.

 

[twepilot]

yet another effing ************************* to scared to put their name to a post.

RV

 

[twepilot]

also, just because I don't foam at the mouth, don't interpret that as my being satisfied with things. I'm not.

RV

 

[maxblast72]

I am not asking you to foam at the mouth, but don't talk down to the junior guys who are looking for change with your comment about herd mentality. I have done my homework with alot of reading about airline history, been at several ALPA Q&A sessions and seen some of the tough questions asked (from TWA guys for example), and made up my own mind. I don't think ALPA is the cure all. But I do think as Airtran heads into their most profitable year since 2003 that ALPA gives our pilot group the best chance of getting a fair contract for everyone (especially the B-scalers).

By the way, I am not even a B-scaler. I was lucky enough to hire on in April 2004 and get a 2.5 yr upgrade. Stuck on reserve for a few years, but I don't mind living in Smyrna, GA. But I understand the disappointment of the guys hired 8 months behind me who are stuck at $75K-85K a year for the next 2-4 years and guys hired 2 years behind me that have 8-10 more years as FO. Those guys deserve to come off the B-scale before year 5. Are they going to get over $100/hr in one contract? Probably not, but they deserve alot more than to be stuck at $70-75/hr for the next 8-10 years.

RB (4/29/04 newhire)

 

[twepilot]

msg rec'd.. Herd mentality is a reality in a lot of things just my opinion. Surely, I didn't mean to talk down to anyone...Sorry if I came off that way.

RV

 

[T3700]

Pay raise for our most senior Captains in TA 2 = $22/hour. Pay raise for a 5th year F/O $5/hour. Some of them still wonder why the junior guys voted no. The NPA tried to throw the junior guys under the bus in 2007 and have never regained the confidence of more than half of the membership.

 

[Mongolikecandy]

Pay raise for our most senior Captains in TA 2 = $22/hour. Pay raise for a 5th year F/O $5/hour. Some of them still wonder why the junior guys voted no. The NPA tried to throw the junior guys under the bus in 2007 and have never regained the confidence of more than half of the membership.

As one of the most junior FOs on property, I hope some attention will be paid to FO rates in negotiations. I know captains want what's theirs also. I don't blame them for that. However, many of us took a huge pay cut coming to FL with the promise of a quick upgrade. That upgrade has gone from 4 years (as referrenced in the interview) to what? 10+ years?

I was largely skeptical of a quick upgrade given the economy and fuel prices when I was hired so I am not surprised that the upgrade time has increased dramatically. However, it would be nice to bring the FO rates into the same ball park as other majors.

 

[zman]

NPA= no loss of lic. insurance or aero-medical benefits.

ALPA= loss of lic. insurance and aero-medical benefits.

Even if negotiating is the same song and dance, we still get more outta ALPA. Thats why I know why many people are voting ALPA. At least were getting something then nothing. Also if anyone says oh ALPA will sell you out via scope. They should read TA2, see how management tried to get the pilots to give up scope. It was the worst scope clause that any Major airline would have ratified.

 

[Clyde Frog]

TWEpilot is part of the A-scale crowd while the rest of us are on the B-scale. There is a limited number of A-scale guys at Airtran that even give a crap about the B-scale guys.

.

Looking at the industry from a historical standpoint, I would argue that senior guys are B-scale pilots and junior guys are D-scale.

Someone has to fight to restore what was once lucrative career, why not us? Didn't Bob say we're going to be profitable each quarter this year? Time to raise the bar and quit settling for mediocrity!