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Home mySSlife Travel AirTran expects profit every quarter this year

AirTran expects profit every quarter this year

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 ATLANTA (AP) — AirTran Airways expects to be profitable in every quarter this year, despite the weak economy and how it has impacted revenue, Chief Executive Robert Fornaro said Monday.

"I think that will be a rarity among carriers," Fornaro said at the Raymond James Institutional Investors Conference, which was webcast on the Internet.

The profit outlook assumes fuel prices remain at their current level, according to presentation slides AirTran filed with the Securities and Exchange Commission.

Fornaro said that unit revenue is currently being hit more than previously expected, but he noted AirTran expects to have a strong April because of the Easter holiday.

AirTran expects first-quarter passenger unit revenue to be down 7 percent to 8.5 percent and total unit revenue to fall 2 percent to 3.5 percent, according to the SEC filing. It expects first-quarter non-fuel unit costs to be up 8 percent to 9.5 percent.

Fornaro reiterated that the airline will cut capacity about 4 percent this year, capacity will be flat next year and the airline, a unit of Orlando, Fla.-based AirTran Holdings Inc., expects to grow in 2011.

Fornaro said AirTran has been able to maintain a low-cost advantage over competitors even though it has been shrinking.

He also predicted that global carriers will take more of the brunt of the recession than AirTran.

Fornaro said AirTran believes it can grow in Midwest Airlines' home base of Milwaukee without Midwest under its wing. He also cited the weak economy and how it has affected Midwest.

"We're very glad we were unsuccessful with that purchase," Fornaro said. He added, "The opportunity to expand in Milwaukee will be a very good one for us. We didn't have to buy that company. The opportunity is out there because of the poor economy."

AirTran made a hostile takeover bid of $78 million for Midwest in June 2005. AirTran raised its offer several times, topping out with an offer worth an estimated $445 million when it was made in August 2007. Each time, its offer was rejected.

Midwest ultimately agreed to be sold to private equity firm TPG Capital for about $450 million.

Fornaro said Monday that AirTran expects its Milwaukee service to soon account for roughly 10 percent of its overall capacity.

 Copyright 2009 The Associated Press.

 

 

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