AirTran 1st Quarter Results

[FL717]

AirTran Holdings Reports Record First Quarter Revenues of $300 Million
Tuesday April 26, 8:00 am ET - Record 3.6 Million Customers Served -



ORLANDO, Fla., April 26 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc., (NYSE: AAI - News), the parent company of AirTran Airways, Inc., today reported its results for the first quarter of 2005:

-- Operating revenues increased 24.2% to $300 million -- Revenue passengers increased 19.5% to 3.6 million -- Load factor set a new first quarter record of 70.5%

For the first quarter of 2005, AirTran Airways reported a net loss of $8.0 million or $0.09 per share. This compares to net income of $4.1 million or $0.05 per diluted share in the first quarter of 2004.

"The first quarter challenged us on many fronts as we grew revenues and capacity while contending with escalating fuel prices," said Joe Leonard, chairman and chief executive officer. "Nevertheless, we were able to increase our load factor compared to the prior year. I am proud of the outstanding efforts put forth by our Crew Members to serve a record number of passengers during the first quarter."

Robert L. Fornaro, president and chief operating officer, remarked, "AirTran Airways continues to expand its network with new airplanes, low fares and friendly Crew Members. We have announced service to Indianapolis, Charlotte and Richmond offering new, quality low-fare service in historically high-priced markets. In addition, we continue to improve our product with the introduction of XM Satellite Radio now installed on over 20 percent of our aircraft."

AirTran's cost metrics remained consistent year-over-year. Non-fuel operating cost per available seat mile (CASM) increased slightly to 6.44 cents in the first quarter of 2005 compared to 6.42 cents in the year earlier period. On a fuel price neutral basis, CASM declined 0.4 percent to 8.23 cents for the first quarter of 2005. CASM, including fuel, increased 7.7 percent for the first quarter of 2005 to 8.90 cents.

Commenting on the Company's cost performance, Stan Gadek, senior vice president of finance and chief financial officer said, "As our 737 fleet continues to grow, we expect to see further reduction in unit costs. The 737's fuel efficiency and low cost of operation will contribute to our low-cost structure."

Highlights of AirTran's accomplishments since the first of the year include:

* Initiated new service to Indianapolis * Announced expansion to Charlotte and Richmond * Added two B717 and four B737 aircraft to our fleet * Named Best Low-Fare airline by Entrepreneur Magazine for 2005 * Announced enhanced service to Atlanta, Dallas/Fort Worth, Las Vegas and Los Angeles * Unveiled 20 select aircraft with special Elton John livery celebrating the airline's new XM Satellite Radio serviceAirTran Holdings, Inc., will conduct a conference call to discuss quarterly results today at 10:00 a.m. Eastern. A live broadcast of the conference call will be available via the internet at http://www.airtran.com.

 

[Vladimir Lenin]

revenues increase and so do losses, time to tighten the belt, boyz

 

[Boeingman]

Can someone answer this question without me being flamed or starting a war?

Is it true that management has approached you guys for a 12% cut in pay and benefits?

 

[XGmaninGA]

They have asked for 12% in "improvements". Specifics (pay, productivity, etc.) would be negotiated.

 

[-9Capt]

Can someone answer this question without me being flamed or starting a war?

Is it true that management has approached you guys for a 12% cut in pay and benefits?

We are currently in section 6 contract negotiations. 12% in concessions was the company's opening proposal.

Specifically, they want relief from the 12hr duty day, reserve pay, and line value index (scheduling formula), each of which makes our contract somewhat unique. They never mentioned an hourly pay cut.

The results of the unions telephone/on-line poll indicate the pilot group has no interest in discussing concessions. Particularly after this came out...


AirTran boss got $5.7 million pay package in '04


By RUSSELL GRANTHAM
The Atlanta Journal-Constitution
Published on: 04/11/05
Running one of the nation's few profitable airlines is paying off for top executives at AirTran Airways.

The discount carrier's top five executives collected $8.3 million in cash and stock awards last year, according to the company's proxy statement.

Joe Leonard, chairman and chief executive officer, was paid $1,005,769 in salary and bonus, and he got a restricted stock award valued at $4,668,000, according to the filing with the Securities and Exchange Commission Monday.

Leonard's salary and bonus was $1 million the previous year, but his pay package didn't include a grant of restricted stock, a form of incentive pay involving shares awarded at specific future dates. The executive typically has to stay with the company to get the shares.

AirTran logged a $12 million profit in 2004, though that was down from $100 million a year earlier. The carrier's stock declined 11 percent in 2004.

AirTran's other top four executives also got big raises last year, mostly because of stock awards.

All received restricted stock, marking a shift from the practice of granting stock options. Last year, the executives got about a third as many stock options as in previous years.

Restricted stock is considered less risky than stock options, which can be worthless if shares fall below certain "exercise" price targets.

AirTran President Bob Fornaro's cash and stock awards totaled $1.25 million, including $385,577 salary, $450,000 bonus and $416,960 restricted stock. He got $711,058 cash the previous year.

Senior Vice President Stephen Kolski's cash and stock awards totaled $459,197, including $218,462 salary, $143,000 bonus and $97,725 restricted stock. He got $328,385 cash the previous year.

Chief financial officer Stanley Gadek's cash and stock awards totaled $482,847, including $210,577 salary, $155,000 bonus and $117,270 restricted stock. He got $284,135 cash the previous year.

Senior vice president Richard Magurno's cash and stock awards totaled $436,648, including $203,923 salary, $135,000 bonus and $97,725 restricted stock. He got $280,606 cash the previous year.

Orlando-based AirTran is Delta Air Lines' largest rival at Atlanta's Hartsfield-Jackson airport.

AirTran, Southwest, JetBlue and other discount airlines have been mostly profitable since 2001, owing to lower cost structures that enable them to make money at lower fares. However, those profits have been under pressure lately because of high fuel prices.

 

[737 Pylt]

mgmt sucks!

The results of the unions telephone/on-line poll indicate the pilot group has no interest in discussing concessions. Particularly after this came out...

Bravo for you guys! You have to love the mgmt. style of thinking! Put it all on the backs of labor!
When I see mgmt taking bonuses and asking for concessions one really has to wonder what these people (if you can call them that) are thinking??
737

 

[lowecur]

stagnant?

RASM modestly decreased for AAI, as LUV, and JBLU had increases. AWA was the real winner on RASM this quarter as it increased 8%. Competition is not as strong on the West Coast for AWA, but their RASM mgt was still excellent as they turned it around from the previous quarter.

AAI should be helped by a reduced CASM as the 737s are deployed. The real question is whether they are seeing comparative load factors with the competition on those longer flts? AAI needs to see capacity shrink on the East Coast. The next month will be telling as UAIR's future will unfold. There will definitely be a shrinkage of capacity on the East Coast, it's just a matter of who steps in to cherry pick the availability. If UAIR gets the support they need for consolidation, then that will probably seal any future for Flyi.

 

[Boeingman]

We are currently in section 6 contract negotiations. 12% in concessions was the company's opening proposal.

Specifically, they want relief from the 12hr duty day, reserve pay, and line value index (scheduling formula), each of which makes our contract somewhat unique. They never mentioned an hourly pay cut.

The results of the unions telephone/on-line poll indicate the pilot group has no interest in discussing concessions. Particularly after this came out...

Thanks for the answer. And kudos for you all to stand your ground. Sounds like you have better terms then our pos TA just negotiated.

That 12 hour duty should be an FAR.

 

[Boeingman]

to wonder what these people (if you can call them that) are thinking??

That they don't give a rat's arse about the company, the employees or their future.

 

[Boeingman]

They have asked for 12% in "improvements". Specifics (pay, productivity, etc.) would be negotiated.

I love how management reduces financial hits to the employess. "Improvement".......another words, they want you to bend over 12% further.

Thanks for the answer.

 

[FL717]

Bravo for you guys! You have to love the mgmt. style of thinking! Put it all on the backs of labor!
When I see mgmt taking bonuses and asking for concessions one really has to wonder what these people (if you can call them that) are thinking??

The current soup that they are feeding us is from both ends of the horse: From the front end they tell us: "Hey these Senior management guys have done wonders with guiding this company and we're in great shape, so they deserve these pay rewards". Then at the same time.... but out of the other end of the horse we hear: "Hey its a tough industry and we're not in very good shape so we need some concessionary "improvements" to the compensation of labor".

They have been really selling this hard at reccurrent. I say.... no thanks...

AAI should be helped by a reduced CASM as the 737s are deployed. The real question is weather they are seeing comparative load factors with the competition on those longer flts? AAI needs to see capacity shrink on the East Coast.

I absolutely agree, and since this east coast capacity shrink doesn't look like it will be anytime soon, I would like to see us begin to focus on some more profitable west coast flying similar to what we currently do up and down the eastern seaboard.

 

[Boeingman]

The current soup that they are feeding us is from both ends of the horse: From the front end they tell us: "Hey these Senior management guys have done wonders with guiding this company and we're in great shape, so they deserve these pay rewards". Then at the same time.... but out of the other end of the horse we hear: "Hey its a tough industry and we're not in very good shape so we need some concessionary "improvements" to the compensation of labor".

They have been really selling this hard at reccurrent. I say.... no thanks...

Standard MBA training. Screw the employees, line management pockets, pump the stock price. All with no thought or care about the long term health of the company.

 

[llowwelll]

Management said in the conference call Q and A that we were hurt by over-capacity on the east coast. However, our west coast routes are, according to them, very profitable. They say we may add another long-haul route in December or early next year. Our current expansion is focused on the east coast? Perhaps they are hoping to have capacity in place when either/both the US Air or Indenpendence situations resolve themselves.

 

[-9Capt]

Perhaps they are hoping to have capacity in place when either/both the US Air or Indenpendence situations resolve themselves.

When the ATA deal was first announced I specifically remember JL saying that he is not going to focus the futrue of this airline on the failures of others. Funny how things appear to change.

Also, I love how they pi$$ and moan about overcapacity on the east coast all while increasing frequency and announcing new east coast cities.

 

[llowwelll]

They also mentioned something about us being hurt in the first quarter by severe weather. Perhaps this says something about our reliance (overreliance?) on ATL and our failure as of yet to establish another hub-type city. When the WX goes down in ATL, it plays havoc on our entire system.

 

[-9Capt]

AirTran to nearly double number of flights from Philadelphia

By Tom Belden

Philadelphia Daily News

INQUIRER STAFF WRITER

AirTran Airways expects to almost double the number of flights it operates from Philadelphia International Airport in the next 12 months, the discount airline's president said today.

AirTran plans to start service in June between Philadelphia and Richmond, Va., and is considering flights between Philadelphia and US Airways' hub in Charlotte, N.C., president Robert Fornaro said.

AirTran, which now has 18 flights a day from Philadelphia to Atlanta, Boston and Florida, won't say when it may enter the Philadelphia-to-Charlotte route. It is more likely to add more flights first from here to the Midwest, to its hub in Atlanta, and to the five cities in Florida it already serves, Fornaro said.

The Richmond and Charlotte routes now are served nonstop only by US Airways. AirTran, one of the few carriers to make money last year, plans to start service next Wednesday from Charlotte to Baltimore and to its hub in Atlanta.

The Philadelphia-to-Richmond air-travel "market is fairly large, and historically it's had some of the highest prices in the country," Fornaro said. "We think it's a market that will just explode."

AirTran recently began leasing a fourth gate at Philadelphia airport, and "that gives us the opportunity to grow to about 35 flights," Fornaro said.

AirTran, blaming high fuel prices, reported a first-quarter loss of $8 million, or 9 cents a share, compared with a profit of $4.1 million, or 5 cents a share, a year ago. Revenue in the quarter increased from $233.5 million to $289.1 million.

 

[ThisistheDream]

If Airtran cant make money now, then we are all in trouble!!!!!!!!

 

[aspire]

"at least we're making money and growing"...well, at least growing.....

 

[FLB717]

In early 2002 90+% of our flight went through ATL, not it is down to 66% and falling.

As far as our managment taliking from noth ends, just recall that it is the classic Lorenzo play book. But this is not the 80's.

 

[Phaedrus]

>>>In early 2002 90+% of our flight went through ATL, not it is down to 66% and falling<<<

So what does this mean? Good? Bad?

 

[-9Capt]

>>>In early 2002 90+% of our flight went through ATL, not it is down to 66% and falling<<<

So what does this mean? Good? Bad?

Good.

When the ATL weather goes to crap, so does our on-time.

 

[Fly-By-Cable]

AirTran plans to start service in June between Philadelphia and Richmond, Va., and is considering flights between Philadelphia and US Airways' hub in Charlotte, N.C., president Robert Fornaro said.

AirTran, which now has 18 flights a day from Philadelphia to Atlanta, Boston and Florida, won't say when it may enter the Philadelphia-to-Charlotte route. It is more likely to add more flights first from here to the Midwest, to its hub in Atlanta, and to the five cities in Florida it already serves, Fornaro said.

The Richmond and Charlotte routes now are served nonstop only by US Airways. AirTran, one of the few carriers to make money last year, plans to start service next Wednesday from Charlotte to Baltimore and to its hub in Atlanta.

The Philadelphia-to-Richmond air-travel "market is fairly large, and historically it's had some of the highest prices in the country," Fornaro said. "We think it's a market that will just explode."

AirTran recently began leasing a fourth gate at Philadelphia airport, and "that gives us the opportunity to grow to about 35 flights," Fornaro said.

Now here's a smart man. And when he's running this airline (in about 2 years) things are gonna change for the better. IMO

 

[-9Capt]

Now here's a smart man. And when he's running this airline (in about 2 years) things are gonna change for the better. IMO

A Masters degree from Harvard, he's probably no dope.

Funny how Fornaro has a hard on for UsAir, considering where he worked from 1992-1998. Check his bio. here. http://www.prnewswire.com/airtran/bios/robert_fornaro.shtml

 

[FLB717]

Thats why he has a stiffy for USAir, he was forced out by Wolf when Wolf wanted to do/grow MetroJet and Bob told him it would help put USAir in Ch11 or Ch7. He was then asked to leave because he didn't see the big picture at USAir.