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AirTran Swings to Profit

Shares rise 4%.
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beat estimates and reversed a year-ago loss, despite declining unit revenue.

The Orlando-based low-cost carrier reported net income of $2.4 million, or 3 cents a share. Revenue was $504.5 million, up 21.3%. Analysts surveyed by Thomson Financial had expected earnings of 1 cent a share on revenue of $504.3 million.

Shares of AirTran rose 4% in premarket trading.

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In the same quarter a year earlier, the company lost $8.9 million.

Revenue per available seat mile declined 0.4%, and capacity grew 20.5%. AirTran also reported a 6% increase in its average fare and a 70.1% load factor.

"Our revenue performance was better than expected and reflects a balancing of capacity in the marketplace, as well as demand for our product," said President Bob Fornaro, in a prepared statement.

The capacity increase reflected the addition of 20 new Boeing 737-700s and two new Boeing 717-200s to the fleet. The carrier said the addition of new aircraft enabled it to reduce cost per available seat mile, excluding fuel, by 4.1%.

"As we move into our seasonally strong second quarter, our core financial and operating fundamentals are improving," CFO Stan Gadek said.