AirTran (AAI) reported a fourth-quarter loss due primarily to fuel hedging, but said it expects to be profitable this year.
The Orlando, Fla.-based carrier said it lost $118.4 million, or $1 a share, which included a nonoperating loss of $147.7 million related to fuel hedge contracts. Analysts surveyed by Thomson Reuters had estimated a loss of 3 cents. In the same period a year earlier, AirTran lost $2.17 million or 2 cents a share.
Revenue was $589.4 million, up 1%. Analysts had estimated $588 million.
During the quarter, AirTran unwound approximately 78% of its 2009 fuel hedge contracts in order to mitigate the potential for additional losses on further oil price declines."Despite the industry challenge shifting from high oil costs to concerns regarding consumer demand, our 2008 initiatives have us well positioned to return to profitability in 2009," CEO Bob Fornaro said in a prepared statement. Fourth-quarter passenger revenue per available seat mile rose 6.8%. Capacity fell by 6.5%, as traffic fell by 2.2%, resulting in a record fourth-quarter load factor of 78.7%. For the full year, capacity increased by 4.9%. On the cost side, AirTran's adjusted cost per available seat mile was 6.45 cents, up 6.3%.