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That's a little bit over the top. I agree that our profits would begin to shrink year over year, but they would not cease to exist. Our profit for last year is probably going to end up at about $60 million, so it would take years for increasing costs to chip away at that without any growth. I do agree with your overall premise that growth keeps costs down, however. That's not a radical idea at all in this industry.
 
Our union president said that if we got everything we were asking for it would increase our CASM by less than 5 cents. That is not going loose us our industry leading costs.
I think you got your figures wrong. A change of CASM by 5 cents would just about double our costs. Our current CASM, including fuel, is about 10 cents per ASM. I would estimate that us getting every single demand that we're making would increase total CASM by less than half a cent.
 
loss of growth is a long term cost issue, not short term. If we stopped taking airplanes right now, our costs would not dramatically increase overnight (ie salaries, insurance, etc) it would be a year over year cumulative cost effect.

So, I believe, in the short term it does not hurt us to slow growth in an attempt to increase yield, load factor, or whatever. Of course it isn't helping my upgrade any...
 
loss of growth is a long term cost issue, not short term. If we stopped taking airplanes right now, our costs would not dramatically increase overnight (ie salaries, insurance, etc) it would be a year over year cumulative cost effect.

So, I believe, in the short term it does not hurt us to slow growth in an attempt to increase yield, load factor, or whatever. Of course it isn't helping my upgrade any...

i would agree with you in an established business, but not one that is as fairly young as air tran. with no new 737's the denominator (being driven by average stage length increases) will not grow and perhaps would shrink if fleet is moved around (to a caribbean focus, etc.). this could increase unit costs faster than what you are thinking.
 
Well, the good news is we still have 65 brand new B737's being built by Boeing for us over the next 4-5 years. And if the economy isn't do well enough to bring them to ATL, our management is getting calls from airlines all over Asia and Africa to buy our airplanes for about $5 million more than we paid for them (basically an extra $300 million in equity already accrued).

Either way, I think we will be OK. Time will tell. I got $5 we squeak out a small profit tomorrow.
 
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Well, the good news is we still have 65 brand new B737's being built by Boeing for us over the next 4-5 years. And if the economy isn't do well enough to bring them to ATL, our management is getting calls from airlines all over Asia and Africa to buy our airplanes for about $5 million more than we paid for them (basically an extra $300 million in equity already accrued).

Either way, I think we will be OK. Time will tell. I got $5 we squeak out a small profit tomorrow.

until the minute that new contract is signed and then its the same old mgmt mantra, "our costs are too high....."

good luck. my guess is a small loss tomorrow simply because of the cynic in me (the fact that no new contract has been brought forward and thus mgmt wants to show how "precarious" the situation is).
 
NEW YORK (MarketWatch) - AirTran Holdings Inc. would likely benefit from a Northwest-Delta merger, which would trim excess domestic capacity, reduce competition and open up time slots to some of the nation's busiest airports, the low-cost carrier's chief financial officer said on Tuesday.

In an interview with MarketWatch, CFO Stanley Gadek said Northwest and Delta are currently the No.1 and No. 3 airlines for route coverage between the markets AirTran serves.
A tie-up between the two would give the post-merger company a lot of overlapping routes to consolidate, reducing the number of seats while firming up airfares, and giving AirTran the opportunity to pick up some of their former customers.


Additionally, Justice Department trustbusters would likely require the new company to give up a number of its gates and time slots at major airports such as New York's LaGuardia and Washington's Reagan International, Gadek said.
"It wouldn't all come to us, obviously, but we could get some benefit from that and from reduced capacity," he said.
As for AirTran, the carrier isn't currently interested in consolidating, Gadek added.
Earlier Tuesday, AirTran reported that it narrowed its fourth-quarter loss to 2 cents a share, or breakeven after stripping out certain one-time charges.
Bookings have so far been solid in the first quarter, and the company anticipates a swing to profitability before year's end, Gadek said. See full story.
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Christopher Hinton is a reporter for MarketWatch based in New York.
 

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