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TRANNY Beats the Street!

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Colonel Savage

Southern style...
Joined
Mar 11, 2008
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AirTran Holdings, Inc., Reports Record First Quarter Net Income of $28.7 Million

  • Wednesday April 22, 2009, 6:50 am EDT
- Record First Quarter Operating Income of $47.7 Million -





- Company Earns Record Operating Income for Second Consecutive Quarter -
ORLANDO, Fla., April 22 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc., (NYSE: AAI - News), the parent company of AirTran Airways, Inc., today reported record net income of $28.7 million or $0.21 per diluted share for the first quarter along with record operating income of $47.7 million. The Company also posted revenues of $542.0 million and achieved the highest first quarter load factor in Company history at 76.3 percent.
The combination of lower fuel prices, low costs, and quality service coupled with fleet and route network adjustments has resulted in the Company posting its best first quarter earnings in history. Total fuel costs for the quarter were down 50.5 percent year-over-year on a 7.2 percent reduction in capacity as measured by available seat miles (ASMs).
"Our ability to report a profit today is rooted in the difficult decisions we made last year. AirTran Airways was among the first airlines to react to the changing economic environment and we are among the first to show signs of recovery," said Bob Fornaro, AirTran Airways' chairman, president and chief executive officer. "Our Crew Members deserve much of the credit as they continue to provide a high-quality product to our customers seeking real value and we are pleased to have been recognized, for the second consecutive year, as first in quality among major carriers in 2008."
During the first quarter, AirTran Airways expanded service in several markets that represented opportunities for significant traffic. Flights in Milwaukee have increased more than 50 percent year over year and more than 30 scheduled daily departures are planned for the Summer schedule. Additional flights and new cities were also added to the Orlando route network and AirTran Airways now has more than 60 peak day departures to 36 destinations and is the second largest carrier to America's top vacation destination.
"AirTran Airways' ability to be nimble and responsive to changing market conditions is a tremendous competitive advantage. Increasing flights to and from Milwaukee and Orlando while redesigning our Atlanta hub schedule to make the network more efficient and productive are the latest examples of this capability," said Kevin Healy, senior vice president of marketing and planning for AirTran Airways.
While the Company expanded to new markets and continued to offer high-value, friendly service, AirTran Airways remained sharply focused on remaining the lowest cost producer among major airlines.
"While the weakening economy has begun to pressure prices throughout the airline sector, our industry leading, low-cost structure has allowed us to offset this challenge," said Arne Haak, senior vice president of finance, treasurer and chief financial officer for AirTran Airways. "We are committed to maintaining our low cost advantage and expect to remain profitable every quarter this year despite the current economic environment."
Other highlights of AirTran Airways' accomplishments in the first quarter and to date include:

  • Ranked #1 among all low-cost carriers for the second consecutive year in the Airline Quality Rating (www.aqr.aero). This is the fifth consecutive year AirTran ranked third or higher for quality among all U.S. carriers in this prestigious rating.
  • Chosen as Travelzoo's Best Provider of Domestic Air Fare Deals in 2009.
  • Announced service commencing in five new cities (Atlantic City, N.J., Allentown, Pa., Charleston, W.Va., Asheville, N.C., and Knoxville, Tenn.) and 14 new routes.
  • Partnered with the Milwaukee Brewers by establishing the AirTran Airways Landing Zone at Miller Park and by signing Milwaukee Brewers slugger Ryan Braun as the latest celebrity endorser.
  • Consolidated support operations including: customer service, inflight, recruiting, marketing and sales in AirTran's new Atlanta Corporate Center.
 
That's great news-- I think that point to point flying is a great sell for the medium markets. It also goes to show that maybe buying Midwest wasn't all that important since they're also doing well in MKE...
 
That's great news-- I think that point to point flying is a great sell for the medium markets. It also goes to show that maybe buying Midwest wasn't all that important since they're also doing well in MKE...

Bob's new slogan: "If you can't join 'em, beat 'em.
 
There is a special place in hell for a CEO of an airline that makes a profit during this time with employees on the street.
 
The key part of the report to focus on was at the bottom. There Fornaro predicted Q2 RASM was only going to be down 2-3%. That is pretty good compared with the trends most other airlines reported. Airtran is not dependent on business or international travelers to have a strong revenue performance.

Fornaro also projected an all-in Q2 fuel price between $1.75 and $1.80. Wouldn't be surprised to see an all-time quarterly net profit record close to $100 million for Q2 if those projections hold up.
 
There is a special place in hell for a CEO of an airline that makes a profit during this time with employees on the street.
Thanks for your concern, but when the decision was made to reduce Airtran's total monthly block hours (and furlough), Airtran was burning through alot of cash. As soon as fuel prices went back below $2/gallon and Airtran became profitable again, everyone was offered a recall due to the fact that we were adding thousands of block hours back into the summer 2009 schedule.

What do you want a CEO to do? Keep flying unprofitable flights or to try to reduce the bleeding?
 
The key part of the report to focus on was at the bottom. There Fornaro predicted Q2 RASM was only going to be down 2-3%. That is pretty good compared with the trends most other airlines reported. Airtran is not dependent on business or international travelers to have a strong revenue performance.

Fornaro also projected an all-in Q2 fuel price between $1.75 and $1.80. Wouldn't be surprised to see an all-time quarterly net profit record close to $100 million for Q2 if those projections hold up.

Fornaro said on CNBC that Q2 earnings would "be the bottom"? Did he mean RASM?
 
There is a special place in hell for a CEO of an airline that makes a profit during this time with employees on the street.
There is a worse place in hell for a CEO that runs a company that bleeds red every quarter with employees on the street. Isn't the objective of this industry to actually turn a profit? That's right, I forgot, our free market economy isn't free anymore...
 
My point is the short term mentality of most managment groups in the airlines. Even though i dont work for Southwest they were losing over a million a day after Sept 11 and still didnt furlough. I wish United or any other group had that mentality.

No corp needs to regularly lose money but i think there needs to be a longer term goal.

Shaping Southwest's Organizational Culture Contd...

Thriving Under Pressure

Post-September11, 2001, when most airlines in the US went in for massive layoffs, Southwest avoided laying off any employee (Refer Exhibit VII.) Even before the September 11 crisis hit, Kelleher had explained his philosophy regarding layoffs in an interview to Fortune magazine. He said, "Nothing kills your company's culture like layoffs. Nobody has ever been furloughed [at Southwest], and that is unprecedented in the airline industry. It's been a huge strength of ours. It's certainly helped us negotiate our union contracts. One of the union leaders….came in to negotiate one time, and he said, "We know we don't need to talk with you about job security." We could have furloughed at various times and been more profitable, but I always thought that was shortsighted.
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You want to show your people that you value them and you're not going to hurt them just to get a little more money in the short term. Not furloughing people breeds loyalty. It breeds a sense of security. It breeds a sense of trust. So in bad times you take care of them, and in good times they're thinking, perhaps, "We've never lost our jobs. That's a pretty good reason to stick around."...
 

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