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AirTran's Loss Matches Estimates

Revenue rises 26.5%.
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reported a quarterly loss as capacity surged and said it would benefit from industry consolidation, which would reduce capacity at other carriers.

"Consolidation is basically for taking domestic capacity out of the marketplace and

for international diversification," said President Bob Fornaro, on a conference call with analysts. "Most of these combinations would be of significant benefit to us, allowing us to be more strategic in our growth plans and to diversify."

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Most potential merger scenarios involve reducing capacity in the East, where AirTran is strong, and in the Midwest, where AirTran wants to grow. Additionally, the Justice Department could seek divestitures at key airports such as New York LaGuardia and Washington Reagan National.

"That's where we'd like to strengthen our hand," Fornaro said. "Those are some of the best airports in the country."

For the quarter, AirTran reported a net loss of $2.2 million, or 2 cents a share, in line with estimates provided by Thomson Financial. Revenue rose 26.5% to $584 million. Analysts had estimated $578 million. A year earlier, net income was $3.6 million.

Revenue per available seat mile grew by 9.4%. Capacity rose 15.1% and load factor by 6.3 points to 75.3%. Cost per available seat mile excluding fuel was 6.07 cents, up 2.2% due to winter weather, increased maintenance charges and distribution costs related to higher traffic. For the year, CASM excluding fuel declined by 1.7%.

For the full year, excluding special items, net income was $52.7 million, the highest since 2003.