AirTran vows to push ahead with Midwest bidAirTran vows to push ahead with Midwest bid
Exec says carrier may extend Feb. 8 deadline for tender offer
By DAVE HIRSCHMAN
The Atlanta Journal-Constitution
Published on: 01/26/07 AirTran Airways will do "whatever it takes" to complete a buyout of Midwest Airlines, a top executive said Friday, despite stiff resistance from the Milwaukee-based company.
"We can't be persuaded to end our bid," AirTran finance chief Stan Gadek said, adding the airline is considering an extension of the Feb. 8 deadline on its tender offer for Midwest stock.
Bloomberg
Fuel costs were up 20 percent in 2006, AirTran executives said, though prices are coming down this year.
His comment came as AirTran posted a fourth-quarter loss, citing high fuel costs, fleet expansion and a costly promotion with the Wendy's hamburger chain.
But the company's full-year profit nearly doubled, marking its eighth consecutive annual profit.
The airline, headquartered in Orlando, said it lost $3.3 million, or four cents a share in the three-month period that ended Dec. 31. The loss was in line with Wall street estimates, and it compares to a $369,000 net profit during the same period in 2005.
The fourth-quarter loss came despite a 13 percent climb in revenue to $462 million.
Gadek said a promotion last year with Wendy's accounted for $1.9 million of the fourth-quarter loss. Wendy's customers could collect drink cups for free flights.
The quarterly loss comes as AirTran seeks to convince Midwest shareholders to accept its tender offer and merge the two carriers. Midwest on Thursday posted a profit and contends its standalone growth plan is better.
"The year 2006 was very challenging with our average fuel prices again rising over 20 percent for the third year in a row," said Joe Leonard, AirTran chairman and chief executive.
AirTran said it made money in November and December, but that wasn't enough to offset losses from October.
For all of 2006, AirTran reported $15.5 million in net income or 17 cents a share, compared to $8.1 million, or 9 cents, in 2005.
Going forward, AirTran has slowed new aircraft deliveries. The airline took on 20 new Boeing 737s and two 717s in 2006.
AirTran's $345 million takeover bid for Midwest is an attempt to gain a second hub. Midwest has rebuffed AirTran's overtures so far, however, and the Milwaukee carrier has numerous "poison pill" provisions it can use to block an unwanted merger.
AirTran costs surged 13.4 percent in the fourth quarter. But fuel costs have declined sharply in the last two months.
The airline's load factor — the percentage of seats filled by paying customers — fell to 69 percent in the fourth quarter from 71.5 percent as seat capacity surged 20 percent.
"We are encouraged by lower capacity levels in our markets and by recent declines in fuel prices," said Bob Fornaro, AirTran president and chief operating officer.
Exec says carrier may extend Feb. 8 deadline for tender offer
By DAVE HIRSCHMAN
The Atlanta Journal-Constitution
Published on: 01/26/07 AirTran Airways will do "whatever it takes" to complete a buyout of Midwest Airlines, a top executive said Friday, despite stiff resistance from the Milwaukee-based company.
"We can't be persuaded to end our bid," AirTran finance chief Stan Gadek said, adding the airline is considering an extension of the Feb. 8 deadline on its tender offer for Midwest stock.
Fuel costs were up 20 percent in 2006, AirTran executives said, though prices are coming down this year.
His comment came as AirTran posted a fourth-quarter loss, citing high fuel costs, fleet expansion and a costly promotion with the Wendy's hamburger chain.
But the company's full-year profit nearly doubled, marking its eighth consecutive annual profit.
The airline, headquartered in Orlando, said it lost $3.3 million, or four cents a share in the three-month period that ended Dec. 31. The loss was in line with Wall street estimates, and it compares to a $369,000 net profit during the same period in 2005.
The fourth-quarter loss came despite a 13 percent climb in revenue to $462 million.
Gadek said a promotion last year with Wendy's accounted for $1.9 million of the fourth-quarter loss. Wendy's customers could collect drink cups for free flights.
The quarterly loss comes as AirTran seeks to convince Midwest shareholders to accept its tender offer and merge the two carriers. Midwest on Thursday posted a profit and contends its standalone growth plan is better.
"The year 2006 was very challenging with our average fuel prices again rising over 20 percent for the third year in a row," said Joe Leonard, AirTran chairman and chief executive.
AirTran said it made money in November and December, but that wasn't enough to offset losses from October.
For all of 2006, AirTran reported $15.5 million in net income or 17 cents a share, compared to $8.1 million, or 9 cents, in 2005.
Going forward, AirTran has slowed new aircraft deliveries. The airline took on 20 new Boeing 737s and two 717s in 2006.
AirTran's $345 million takeover bid for Midwest is an attempt to gain a second hub. Midwest has rebuffed AirTran's overtures so far, however, and the Milwaukee carrier has numerous "poison pill" provisions it can use to block an unwanted merger.
AirTran costs surged 13.4 percent in the fourth quarter. But fuel costs have declined sharply in the last two months.
The airline's load factor — the percentage of seats filled by paying customers — fell to 69 percent in the fourth quarter from 71.5 percent as seat capacity surged 20 percent.
"We are encouraged by lower capacity levels in our markets and by recent declines in fuel prices," said Bob Fornaro, AirTran president and chief operating officer.
