AirTran expects modest loss in 4th Q

[BR715]

Just saw the news release on Rueters. Blaming increased capacity on the East Coast. If that is the case why would we have announced Newburgh and Daytona. Don't you think it is time for some western expansion. This company has the lowest non fuel cost in the sky. I think Orlando needs a change. Let Fornaro take over.

I'M FEELING A LITTLE OVER CLEMPT, TALK AMONGST YOURSELVES

 

[DonVerita]

Yet management still goes on with the retarded $29 fare sales.

Or maybe they're just cooking the books to show a loss so they could then go and cry to the union that the sky is falling and they can't afford pay raises in the new contract.

The logical followup response to that would be: And how much did management give themselves in bonuses over the last few years?

 

[BR715]

I can see it now 8 million dollar loss. 8 million dollar bonus to upper management. Leonard will probably buy a couple hundred bottles of Scoth with that pile of cash. Heard that he hits the bottle pretty hard.

 

[BLUE BAYOU]

Jetblue can be blamed for something here, can't we? The airline has drawn down our West Coast operations and have recently concentrated on our shorter routes, specifically the East Coast. Our average stage length Nov 2005 was around 1300NM and in November of 2006 it came down to 1000NM or so. This was our Return to Profitability. Airtran has been somewhat prudent to not compete head-on with Jetblue as in the retraction of BOS-IAD flights and BOS-ROC (even though we only flying BOS-BUF). I think there just needs to be some patience from us LCCs as we wait to see what, if anything, happens with mother Delta (who dominates as our largest East Coast Competitor) and right now cares less if they make a profit while in Chapter 11.

 

[Lear70]

Probably didn't help any...

Neither did a half million dollar hull damage accident in MEM.

I'm sure all of that will certainly drag us into the red. Interesting to see how they paint the numbers for the year, and yes, I'm certain it will have a negative impact on bargainin... not that the rates we're asking for are all that much of an increase to begin with.

 

[FDJ2]

It's not so bad, AAI still expects to be profitable for the full year. I do find the loss of RASM to be of interest, since it seems everyone else is increasing their RASM year over year.

LOS ANGELES, Jan 3 (Reuters) - AirTran Holdings Inc. (AAI.N: Quote, Profile , Research) said on Wednesday it expects to report "a modest loss" for the fourth quarter, but to be profitable for full-year 2006, due to a decline in passenger traffic and weaker yields from increased competition along the East Coast.

Wall Street analysts, on average, expect the company to earn 10 cents a share in the fourth quarter and 34 cents a share for the full year, according to Reuters Estimates.

The company said its December passenger load factor, which measures the amount of available capacity filled, rose 0.4 percent from a year earlier to 70.4 percent, but was down 2.5 points to 69 percent for the full fourth quarter.


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AirTran said it expects its fourth revenue per available seat mile to drop by 6.5 to 7.5 percent compared with fourth quarter 2005.

The company said that, based on published future schedules, capacity increases in its key competitive markets are expected to moderate in the first quarter of 2007.

AirTran said its fourth quarter costs remain on target with fuel costs expected at $2.00 to $2.05 a gallon. The company expects fourth quarter non-fuel costs to drop about 3 percent.

The company's shares, which rose 2.7 percent to close at $12.06 on the New York Stock Exchange, were halted in after hours trading.

 

[instructordude]

That totally suks. This industry seems to be hard on everyone, including Goliaths like Airtran. On a better note though, the article does say Airtran will come out ahead by the end of the year. Not suprising to see with a company that strong.

 

[Bavarian Chef]

Why were the shares halted?

 

[pipe]

That totally suks. This industry seems to be hard on everyone, including Goliaths like Airtran. On a better note though, the article does say Airtran will come out ahead by the end of the year. Not suprising to see with a company that strong.

Goliaths?

 

[LearLove]

"including Goliaths like Airtran."

whats this guy smoke???

 

[Swaayze]

You must not have noticed that it's Instructordude (don't be fooled by the new avatar).

 

[G2T]

That totally suks. This industry seems to be hard on everyone, including Goliaths like Airtran.

That would have made much more sense if it had been worded something like this:

"That totally suks. The LCC's like Airtran seem to be hard on everyone, including the Goliaths, like the old legacy carriers."

 

[atldc9]

Probably didn't help any...

Neither did a half million dollar hull damage accident in MEM.

I'm sure all of that will certainly drag us into the red. Interesting to see how they paint the numbers for the year, and yes, I'm certain it will have a negative impact on bargainin... not that the rates we're asking for are all that much of an increase to begin with.

A half million- We wish! Last I heard it was $4.5 million and counting. The first estimate was $1.5 million. The nose gear went thru the E & E bay like an enema. The forward pressure bulkhead was wrinkled as well. Both engines were sent out as procedure. Ouch.

As to our loss, this sucks bad. 3 quarters of 2006 were in the red, with a breakout 2nd quarter that will keep us profitable for the full year.

Things that make you go hmmm...

 

[Lear70]

Oh man... how much is the hull worth anyway?

Hadn't heard that much, guess the insurance isn't enjoying us lately.

Hope the company is right about ending the year in the black; it's nice to have that kind of negotiating capital.

 

[tubelcane]

Negotiating capital, you mean like we had for the Xmas debacle. What makes you think we would do anything with so called negotiatin capital?

 

[ATLDRVR]

I think it is time for a change a the top here at AirTran. JL did a good job of getting AirTran to where we are today but we seem to have hit a plateau. We will have 2 billion in revenue and the lowest non fuel cost yet we will barely make a profit for the year.

 

[Lear70]

LOL !!

I'm trying to be positive here...

 

[RIDETHELIGHTING]

The holding company for AirTran Airways said Wednesday that it will post a modest loss in the fourth quarter because of greater East Coast competition and a decline in average passenger numbers per plane.
The loss comes even as the Orlando, Fla., airline, which is trying to buy Midwest Airlines of Oak Creek, reports record numbers of passengers for the fourth quarter and the year.

AirTran Holdings Inc. revealed the pending loss in a filing Wednesday with the U.S. Securities and Exchange Commission.
AirTran reported in a press release Wednesday that its passenger traffic rose 16 percent in the fourth quarter to 3.4 million revenue passenger miles. In all, the airline flew more than 5 million passengers during the quarter. Both numbers are record totals.
However, the airline capacity increased 20 percent, greater than the increase in passenger traffic, resulting in a 2.5 percentage point decline in load factor.
In the filing, AirTran said the load factor decline and weaker yields stemming from increased competition on the East Coast will result in the fourth-quarter loss. Specifically, the airline said it expects its fourth quarter unit revenue, or revenue yield -- defined as revenue per available seat mile -- to decline between 6.5 percent to 7.5 percent compared with the fourth quarter of 2005.
Analysts expected an average profit of 10 cents per share for the fourth quarter, according to reports by Reuters and Bloomberg News. Shares of AirTran (NYSE: AAI) were down 64 cents at $11.42 in morning trading Thursday.
AirTran said it expects to post a profit in all quarters in 2007.

AirTran is based in Orlando, Fla., but operates its main hub in Atlanta. The airline also serves General Mitchell International Airport in Milwaukee.
AirTran officials began a public campaign Dec. 13 in an effort to build support among Midwest shareholders for its $290 million offer to buy Midwest Air Group Inc. (AMEX: MEH) of Oak Creek. That offer was turned down by Midwest's board Dec. 6, and Midwest management has said the offer was not only too low but that its services are not compatible with a merger with another airline.



Its sounds like they wrote somethings off this quarter instead of in the first Quarter.

On Dec. 21 Airtran was forcasting .10 a share, now few days later they are showing a loss. Sounds like contract issues too.

Who knows.

 

[Lear70]

Maybe it's just me, but maybe instead of writing off capital expenditure items, they could spend a little money on advertising?

Unless I'm in Atlanta or Orlando, if someone asks me who I work for, when I tell them they say, "Who?" or "You mean ATA?"

Those commercials were funny and they were working. How about a major advertising campaign, say, during Superbowl Sunday when half the adult males in the country (and a good portion of the females) are watching for the funny commercials?

Heck, even some stuff during prime time on the networks? Might help those passenger loads. Some routes are great, others have 25-30 people on them almost every time I fly them.

Just a thought which, for our marketing department, probably isn't worth much to them (not even a Starbuck's) coming from a line pilot.

 

[SkiFishFly]

This sounds a lot like last year at this time. A loss for the fourth quarter and a small profit for the year. Translation - we now know how much money we have so we are going to expense some items, pay management bonuses and make the numbers work out to as small a profit. as we can get away with.

Our marketing dept has been asleep for most of the year...

 

[ATLDRVR]

I hope management is right about 4 quarters of profit next year but I am not holding my breath. Been here 8 years and I can't remember a year where we had 2 consecutive quarters of profitability.

 

[Eagle757shark]

This year will be very interesting for us here at AirTran Airways. The Midwest deal is very important for growth. The last 6 months AirTran's major expansion has come via more point to point service between cities already served. While this is good in some cases, it has diluted revenue as AirTran has begun to compete with themselves on the east coast and has seen their overall load factors decline. The last few weeks loads have been great due to the holiday season. However, in the next couple of weeks loads will drop off as the season comes to an end. While some make think the solution is just to pick a place and start a new hub and grow, the truth is that is not realistic or viable financially for AirTran. What do Southwest, American, Delta, Continental, US Airways, and Northwest all have in common. They have all acquired at least two carriers in their life to have the current route structures they have today. I would definitely rather be among the ones doing the acquiring than being acquired. This should be one interesting year ahead for us here at AirTran.

 

[jimcav]

This year will be very interesting for us here at AirTran Airways. The Midwest deal is very important for growth. The last 6 months AirTran's major expansion has come via more point to point service between cities already served. While this is good in some cases, it has diluted revenue as AirTran has begun to compete with themselves on the east coast and has seen their overall load factors decline. The last few weeks loads have been great due to the holiday season. However, in the next couple of weeks loads will drop off as the season comes to an end. While some make think the solution is just to pick a place and start a new hub and grow, the truth is that is not realistic or viable financially for AirTran. What do Southwest, American, Delta, Continental, US Airways, and Northwest all have in common. They have all acquired at least two carriers in their life to have the current route structures they have today. I would definitely rather be among the ones doing the acquiring than being acquired. This should be one interesting year ahead for us here at AirTran.

Good summary.

 

[Citrus531]

Maybe it's just me, but maybe instead of writing off capital expenditure items, they could spend a little money on advertising?

Unless I'm in Atlanta or Orlando, if someone asks me who I work for, when I tell them they say, "Who?" or "You mean ATA?"

Those commercials were funny and they were working. How about a major advertising campaign, say, during Superbowl Sunday when half the adult males in the country (and a good portion of the females) are watching for the funny commercials?

Heck, even some stuff during prime time on the networks? Might help those passenger loads. Some routes are great, others have 25-30 people on them almost every time I fly them.

Just a thought which, for our marketing department, probably isn't worth much to them (not even a Starbuck's) coming from a line pilot.

I know what you're talking about...they just made the annoucement that we're going after sports stars in Atlanta since Delta has rights to the actual teams...so the boards you see around ATL with Warrick Dunn, Michael Vick and now the goalie of the Thrashers flying AirTran will just continue...probably with Braves players coming in the Spring.

A couple loads I've noticed ALWAYS have 30-40 pax on them...at least when I check them and I'm constanly in our booking system..GPT-FLL...MDW-MSP...IND-RSW is hit or miss..

Had an Alitalia 767 Capt in BOS ask me after looking at my badge "AirTran? Is that a cargo airline"? LMAO!!...I said "ahh nooo, try again". You would think flying into the East Coast a lot he would see some teal 717/737's with a big white A on them

 

[Eagle757shark]

It's important for AirTran to take care of its current customers. But most importantly to figure out how it will continue to grow profitably. I think the Midwest opportunity allows the company to expand in the Midwest with the least amount of cost. The big question is, how much is Midwest truly worth? By the company publicly stating they are willing to negotiate with Midwest management to reach some sort of deal, means more money may be on the table. How many more gates can AirTran get out of Atlanta? Well as long as the city keeps playing politics, does AirTran really want to put all of their eggs in that basket. Now that AirTran has revealed its hand it is important they stay strong, other airlines are watching! It is better to be the acquirer than the acquired.