Somebody has figured out a way to make money in the crummy economy. That somebody is AirTran ( AAI), which on Wednesday reported a record first-quarter profit and said it will make money in every quarter this year. The carrier earned 21 cents a share, blowing out the consensus estimate of 4 cents. AirTran shares were up 24% to $6.92 just before the market closed. "Fuel savings alone are not enough to produce this type of earnings," CEO Bob Fornaro said Wednesday, on an earnings conference call. "We made some of the most dramatic moves to (improve) our business and as a result we are among the first airlines to show recovery. The principal move came last spring when AirTran, which had grown at a 20% rate for five years, slammed on the capacity brakes. In April, it said it would stop growing in September and keep capacity flat throughout 2009. Then in May, it pushed 18 Boeing ( BA) does deliveries from 2009 through 2012 into 2013 through 2014. "I would not be considering adding capacity this year because we have a weak revenue environment," Fornaro said Wednesday. "When you start growing and taking airplanes, that requires deposits and the like. Our priority is to strengthen the balance sheet." Besides halting capacity growth, AirTran took a series of other steps, including raising cash and reallocating aircraft. "All airlines are shrinking now, but we came to grips early with the fact that the world was going to get much more difficult and we went at it very hard," said CFO Arnie Haak in an interview. "We went out and raised money in April, which a lot of people questioned when we did it." An April sale of stock and debt raised $150 million.
AirTran Holdings (NYSE:AAI) hit a new 52-week high Friday as it is currently trading at $7.56, above its previous 52-week high of $7.55 with 368,427 shares traded as of 10:10 a.m. ET. Average volume has been 2.8 million shares over the past 30 days.