AirTran Net Income of $134.7 Million for 2009

[cjscinta]

70 bucks an hour? I wish.

 

[Wesb737fo]

AirTran Net Income of $134.7 Million for 2009

Well thats a no brainer!! When you have 737 FO's making 70 bucks an hour and CA's 130, how could you NOT be earning a significant profit?

Uh....I'm not going to disagree with you that I should be paid more, we WILL address that issue soon, but if you think that profits are strictly driven by pilot pay, you need to look at some 10K filings and learn how to read them.

Last years rev/seat-mile was 10.05 cents/asm.

The cost was 9.30 cents/asm.

Excluding fuel the cost was 6.38 cents/asm.

Of that 6.38 cents/asm only 22% comprised salaries, wages and benefits. That's 1.4 cents/asm.

Assuming that half the salaries, wages and benefits are attributed to pilots. The pilot cost would be .70 cents/asm.

Give ALL pilots a 25% raise and our portion goes up .175 cents/asm. The total cost goes to 9.475 cents/asm.

With rev being 10.05 minus cost 9.475, that still results in a profit.

 

[Lear70]

Moderator hat on:

I'm not going to warn you guys again. Knock it off with the profanity. Seriously. Someone's gonna get a FI vacation if you keep it up.

Moderator hat off:

Jerry, feel free to repost, without the profanity, it was a valid point, even though the pay rates ARE abysmal...

/mod

 

[maxblast72]

Give ALL pilots a 25% raise and our portion goes up .175 cents/asm. The total cost goes to 9.475 cents/asm.

.175 cents/asm times 24 billion ASMs comes out to a pilot cost increase of around $42 million per year. Company isn't going to increase their costs by $42 million per year and give us the transparency we desire without a serious threat of work stoppage.

 

[Wesb737fo]

Max, attributing half of the wages to the pilots was a little generous, I would say more like 1/4 to 1/3. And with an ave. pay raise of 20% between Ca and Fo's, I come out with around 30 mil. The point I was trying to make is that low pilot wages was not the reason AAI made a profit last year.

However, I do agree that we should be paid higher and it's going to take some effort to get there.

BTW, looking at the projections (if they are correct) for Q1, we should make an operating profit around $ 46 mil.

 

[maxblast72]

Max, attributing half of the wages to the pilots was a little generous, I would say more like 1/4 to 1/3. And with an ave. pay raise of 20% between Ca and Fo's, I come out with around 30 mil. The point I was trying to make is that low pilot wages was not the reason AAI made a profit last year.

Airtran's total labor costs are a little under under $500 million per year and the pilots get a little over $200 million, so you can figure between 40-45% of Airtran's total labor costs are due to the pilots.

BTW, looking at the projections (if they are correct) for Q1, we should make an operating profit around $ 46 mil.

I am not sure where you get that operating profit of $46 million.

Using the Q1 2010 projections from last weeks 8-K:

Capacity = Up 7-8%
TRASM = Up 2.5-3.5%
Nonfuel CASM = Up 2.5-3%
All in fuel cost = $2.25-2.30 gal

I calculated a breakeven at the operating level which results in a net loss of around $20 million (the average estimate of 10 Wall St analysts for us is a loss of 8 cents per share according to Yahoo Finance).

According to the projections, our revenue will be up $60 million year over year due to 7-8% capacity increase and 2.5-3.5% TRASM increase. But our fuel cost are going up $70 million (due to capacity growth and price increase from $1.62 last year to $2.25-2.30 this year). Also, our nonfuel costs are going up $37 million (due to 2.5-3% nonfuel CASM increase and capacity growth). The $107 million in increased costs overrides our $60 million revenue increase and takes us from an operating profit of $47 million in Q1 2009 to a breakeven Q1 2010.

 

[Wesb737fo]

Airtran's total labor costs are a little under under $500 million per year and the pilots get a little over $200 million, so you can figure between 40-45% of Airtran's total labor costs are due to the pilots.

I am not sure where you get that operating profit of $46 million.

Using the Q1 2010 projections from last weeks 8-K:

Capacity = Up 7-8%
TRASM = Up 2.5-3.5%
Nonfuel CASM = Up 2.5-3%
All in fuel cost = $2.25-2.30 gal

I calculated a breakeven at the operating level which results in a net loss of around $20 million (the average estimate of 10 Wall St analysts for us is a loss of 8 cents per share according to Yahoo Finance).

According to the projections, our revenue will be up $60 million year over year due to 7-8% capacity increase and 2.5-3.5% TRASM increase. But our fuel cost are going up $70 million (due to capacity growth and price increase from $1.62 last year to $2.25-2.30 this year). Also, our nonfuel costs are going up $37 million (due to 2.5-3% nonfuel CASM increase and capacity growth). The $107 million in increased costs overrides our $60 million revenue increase and takes us from an operating profit of $47 million in Q1 2009 to a breakeven Q1 2010.

You're right, I did the gas wrong. Well, I'm winging here in the MKE hotel using the the AirTran filing. I show the ave. gas price at 1.87 for 2009, where did you see $1.62? At 2.27 projected, that is around a 20% increase over 1.87. I erred when converting that into fuel casm. I figured fuel casm 3.06 cents and I should have around 3.5. Once again, my point is that non-fuel casm doesn't go up that much for an industry standard contract.

Regardless, it's been the same contract for 9 years, pay us the frikin' money and RAISE THE TICKET PRICES a couple of bucks. I'm tired of paying for AAI's fuel.

 

[maxblast72]

You're right, I did the gas wrong. Well, I'm winging here in the MKE hotel using the the AirTran filing. I show the ave. gas price at 1.87 for 2009, where did you see $1.62? At 2.27 projected, that is around a 20% increase over 1.87. I erred when converting that into fuel casm. I figured fuel casm 3.06 cents and I should have around 3.5.

$1.62/gallon was our economic all-in fuel cost for Q1 2009 per gallon. $1.87 was the price for the entire year. When figuring fuel costs for Q1 2010, take the gallons burned for Q1 2009 times 1.075 (7.5% increase in capacity increases gallons burned by roughly the same percent) and then multiply by the estimated Q1 2010 all-in fuel price. As you can see, we go from roughly $135 million fuel bill in Q1 2009 to a fuel bill of roughly $205 million in Q1 2010.

In this economy, Airtran can be really profitable when Jet A is in the $1.60-$1.80 range. In the $2.30 range, we drop down to breakeven. Look for a double dip recession to benefit to help Airtran as fuel prices drop again. Oil down 10-15% in the last month as Wall St. retreats from its highs. If we don't get the double dip, we should be OK with TRASM increases (due to limited capacity additions industrywide) overcoming the fuel prices in the $2.30 range.

Regardless, it's been the same contract for 9 years, pay us the frikin' money and RAISE THE TICKET PRICES a couple of bucks. I'm tired of paying for AAI's fuel.

That is why we are trying to develope markets where we are the largest player (ie more than 75% of the marketshare). Alot of our newest Florida nonstops are markets where we are the only player nonstop giving us good pricing power.

 

[pipejockey]

but if you think that profits are strictly driven by pilot pay, you need to look at some 10K filings and learn how to read them.

I wholeheartedly agree! I was merely trying to make clear how horribly underpaid you AirTran Pilots are, especially the 737 pilots. I am quite certain that many of you would be shocked at just how little fares would need to increase to get back 2001 pay rates, adjusted for inflation of course.

On a side note. Management makes it abundantly clear why they believe pilots should not be paid what they were in the 1970's, and even worse, they don't even think we deserve the pay we had in 2001. But I have not heard one reasonable justification for the kind of pay and bonuses upper management and the executives get. The average Executive was paid about 40 times that of average labor in the 1970's, now they are paid 400 times that of their average labor! It seems to me that the ratio should have stayed the same throughout. It seems as if the financial blow in corporate america is always landed on the chin of labor and never shared equally by management.

 

[rajflyboy]

As bad a connection as Delta is in ATL I can fully understand why Air Tranny is doing well.

For the past 8 months or so I have mostly airlined to and from work on either Delta or Air Tran. Delta is averaging 3 out of every 4 times either late out of ATL or I misconnect because my first flight into ATL is delayed.

So far I have not had this problem on Air Tran. They have been on time with no misconnects.