AirTran Holdings reports 4Q08 results
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AirTran Holdings reported (28-Jan-09) a net loss of USD273.8 million for the full year 2008, or USD2.51 per diluted share, which included non-operating losses of USD150.8 million related to changes in fair value on the Company's out-of-the-money fuel hedge contracts.
During the fourth 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. For the fourth quarter, AirTran reported a net loss of USD118.4 million, or USD1.00 per diluted share, which also included non-operating losses of USD147.7 million related to fuel hedge contracts. AirTran ended the fourth quarter with USD340.5 million in unrestricted cash and investments, its highest year-end balance since 2005.
The fourth quarter results demonstrated the benefits of AirTran Airways' plan for adapting to the year's high-cost energy environment, the unrest in the capital markets, and an uncertain economy. In the second quarter 2008, the Company initiated steps to position the airline to react to these challenges by enhancing the airline's liquidity and reducing capacity and capital expenditures aggressively through the disposition of aircraft and the deferral of Boeing 737 deliveries while sustaining a low-cost structure. These actions combined with the recent decline in fuel prices resulted in a record fourth quarter operating income of USD54.9 million on record fourth quarter revenues of USD589.4 million.
Revenues for the fourth quarter grew 1.0% to USD589.4 million. Despite a 6.5% decrease in capacity, fourth quarter traffic fell just 2.2%, resulting in a record fourth quarter load factor of 78.7%, a 3.4 point increase over 2007. Passenger unit revenues in the fourth quarter were up 6.8% to 10.32 cents per available seat mile (ASM). Total unit revenues were up 7.9% to 11.00 cents per ASM, the highest fourth quarter level achieved in the Company's history.
For the full year, capacity increased by 4.9% and traffic rose 9.6%, which resulted in a load factor of 79.6%. Total annual revenues grew by 10.5% to USD2.6 billion. Passenger unit revenues increased 4.6% to 10.14 cents per available seat mile (ASM). Total unit revenues were up 5.3% to 10.72 cents per ASM, the highest annual level AirTran has ever achieved.
Commenting on the fourth quarter performance, AirTran Airways' senior vice president and chief financial officer Arne Haak said, "2008 presented multiple financial challenges. With a resiliency and a 'can-do-attitude' that defines AirTran, we reacted promptly and decisively to address these challenges. We are committed to being disciplined managers, maintaining our low cost advantage, and we believe that AirTran is now better positioned for the uncertainty that lies ahead in 2009."
(c) Centre for Asia Pacific Aviation. Date posted: 29-Jan-09
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AirTran Holdings reports 4Q08 results 
