AirTran Swings to Loss on Higher Costs
Excluding items, the carrier reported a loss of $16.7 million, or 12 cents a share. Analysts surveyed by Thomson Reuters had estimated a loss of 13 cents. Including $4.7 million in unrealized hedge gains, the loss was $12 million, or 9 cents a share. Revenue rose 11.7% to $605.1 million. Analysts had estimated $606 million.
In the same quarter a year earlier, the company earned $28.7 million, or 20 cents a share.
AirTran said revenue improvements accelerated through the quarter with unit revenue increasing by "a solid double-digit margin" in March. But the gains were offset by the impact of winter storms and a 50% increase in fuel expenses. Load factor was a record 77.2%. During the quarter, total revenue per available seat mile rose 5.3%.On the cost side, operating costs rose 22% or $107.8 million, with fuel accounting for $67.3% of the increase. Winter storms led to reduced capacity and additional expenses. "This winter proved to be one of historic inclement weather for much of the East Coast and particularly for some of our busiest operations like Baltimore/Washington and Atlanta," said CEO Bob Fornaro in a prepared statement. Cost per available seat mile excluding fuel rose 5.1% to 7.07 cents. "Even though the weather was tough this winter, we are experiencing significant revenue growth and passenger demand," Fornaro said. The carrier is benefiting from diversification, growing in Milwaukee, where it has a 30% market share, as well as Orlando, Baltimore and the Caribbean. "We are seeing the benefits from broader geographic diversity while extending our reach on a national scale," said Kevin Healy, senior vice president. Looking ahead to the second quarter, AirTran said capacity would rise 4%, unit revenue would increase 13% to 14%, and cost per available seat mile would increase 4% to 4.5%. -- Written by Ted Reed in Charlotte, N.C. .
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