AirTran Holdings, Inc., Reports Full Year 2006 Profit


26 Jan 2007 [13:27h]     Bookmark and Share



Revenues Grow By Over 30 Percent on a 23.7 Percent Increase in Capacity. Annual Operating Revenues Top $1.8 Billion

ORLANDO, Fla. – AirTran Holdings, Inc., (NYSE: AAI), the parent company of AirTran Airways, Inc., today reported net income of $15.5 million for the full year 2006 or $0.17 per diluted share. For the fourth quarter, AirTran reported a net loss of $3.3 million or $0.04 per diluted share.

For the full year and fourth quarter of 2005, AirTran reported net income of $8.1 million or $0.09 per diluted share and $0.4 million or breakeven per diluted share, respectively.

„The year 2006 was very challenging with our average fuel prices again rising over 20 percent for the third year in a row,“ said AirTran Airways‘ chairman and chief executive officer Joe Leonard. „I am very proud of the tremendous effort from all of our Crew Members here at AirTran Airways. Their hard work and dedication has resulted in our eighth consecutive profitable year despite these difficult conditions.“

During the fourth quarter, capacity grew by 20.2 percent and traffic rose by 16.1 percent, resulting in a load factor of 69.0 percent, a 2.5 point decline year over year. Revenues for the fourth quarter grew 12.7 percent. For the full year, capacity increased by 23.7 percent and passenger revenues grew by 30 percent, which resulted in a 5.2 percent increase in unit revenue.

Commenting on the fourth quarter, AirTran Airways‘ president and chief operating officer, Bob Fornaro, said, „While we were profitable in November and December, these profits were insufficient to offset our losses in October.“ Fornaro went on to say, „We are encouraged by lower capacity levels in our markets and by recent declines in fuel prices as we go into the first quarter of 2007.“

AirTran Airways reduced its unit operating costs by 5.6 percent in the fourth quarter primarily as a result of a 7.7 percent decline in fuel prices. In addition, non-fuel unit costs decreased by 4 percent to 5.94 cents.

Stan Gadek, AirTran Airways‘ chief financial officer, said, „I am pleased that for the fifth consecutive year we have lowered our non-fuel unit costs, and that this quarter’s non-fuel unit costs came in below six cents per seat mile. Our ability to deliver a high quality product with an industry leading cost structure is one of our company’s great assets.“

    Recent highlights of AirTran Airways' accomplishments include:
    * Took delivery of twenty new Boeing 737-700 aircraft and two new 717-200
      aircraft in 2006.
    * Secured financing on all 2007 aircraft deliveries.
    * Closed on new financing for aircraft pre-delivery deposits for 2008
      aircraft deliveries.
    * Initiated new service to White Plains, N.Y., and Seattle, Wash. in 2006.
    * Launched over 20 new non-stop routes in 2006.
    * Announced the airline will begin service to Newburgh, N.Y., Daytona
      Beach, Fla., Phoenix, Ariz., San Diego, Calif., and St. Louis, Mo. in
      2007.
    * Announced over 15 new non-stop routes in 2007.
    * Created over 700 new jobs throughout our network in 2006.

AirTran Holdings, Inc., will conduct a conference call to discuss quarterly results today at 10:00 a.m. Eastern Standard Time. A live broadcast of the conference call will be available via the internet at http://www.airtran.com.

AirTran Airways, a Fortune 1000 company and one of America’s largest low-fare airlines with 8,000 friendly, professional Crew Members, operates nearly 700 daily flights to 54 destinations. The airline’s hub is at Hartsfield-Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways‘ aircraft features the fuel-efficient Boeing 737-700 and 717-200 to create America’s youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. For reservations or more information, visit http://www.airtran.com (America Online Keyword: AirTran).

Editor’s note: Statements regarding the Company’s operational and financial success, business model, expectation about future success, improved operational performance and our ability to maintain or improve our low costs are forward-looking statements and are not historical facts. Instead, they are estimates or projections involving numerous risks or uncertainties, including but not limited to, consumer demand and acceptance of services offered by the Company, the Company’s ability to maintain current cost levels, fare levels and actions by competitors, regulatory matters and general economic conditions. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings, including but not limited to the Company’s annual report on Form 10-K/A for the year ended December 31, 2005. The Company disclaims any obligation or duty to update or correct any of its forward-looking statements.

    Media Contacts: Tad Hutcheson
                    tad.hutcheson@airtran.com
                    678.254.7442

                    Judy Graham-Weaver
                    judy.graham-weaver@airtran.com
                    678.254.7448

                    Arne Haak (Financial)
                    407.318.5187


             * Attached: Consolidated Statements of Operations *


                            AirTran Holdings, Inc.
                    Consolidated Statements of Operations
        (In thousands, except per share data and statistical summary)
                                 (Unaudited)

                                     Three Months Ended
                                        December 31,              Percent
                                 2006               2005           Change
                              ----------         ----------      ---------

    Operating Revenues:
     Passenger                 $440,209           $394,103           11.7
     Cargo                          918              1,817          (49.5)
     Other                       20,754             13,950           48.8
                              ----------         ----------
      Total operating revenues  461,881            409,870           12.7

    Operating Expenses:
     Salaries, wages and
      benefits                  102,713             88,293           16.3
     Aircraft fuel              163,470            148,510           10.1
     Aircraft rent               60,618             51,136           18.5
     Distribution                16,139             16,770           (3.8)
     Maintenance, materials and
      repairs                    36,548             27,348           33.6
     Landing fees and other
      rents                      24,068             19,287           24.8
     Aircraft insurance and
      security services           6,797              6,231            9.1
     Marketing and advertising    9,263             10,166           (8.9)
     Depreciation                10,436              6,214           67.9
     Other operating             29,362             31,109           (5.6)
                              ----------         ----------
      Total operating expenses  459,414            405,064           13.4
                              ----------         ----------
    Operating Income              2,467              4,806          (48.7)

    Other (Income) Expense:
     Interest income             (5,292)            (3,818)          38.6
     Interest expense            15,065              9,223           63.3
     Capitalized interest        (3,145)            (2,684)          17.2
                              ----------         ----------
    Other (income) expense, net   6,628              2,721              -
                              ----------         ----------
    Income (Loss) Before Income
     Taxes                       (4,161)             2,085              -

    Income Tax Expense (Benefit)   (836)             1,716              -
                              ----------         ----------

    Net Income (Loss)           $(3,325)              $369              -
                              ==========         ==========
    Income (Loss) per Common
     Share
     Basic                       $(0.04)                $-              -
     Diluted                     $(0.04)                $-              -

    Weighted-average Shares
     Outstanding
      Basic                      91,092             87,850            3.7
      Diluted                    91,092             91,208           (0.1)

      EBITDA                    $12,903            $11,020           17.1
      Operating margin              0.5 percent        1.2 percent   (0.7)pts.
      Net margin                   (0.7)percent        0.1 percent   (0.8)pts.

    Fourth Quarter Statistical
     Summary:
     Revenue passengers       5,017,232          4,388,198           14.3
     Revenue passenger miles
      (000s)                  3,438,110          2,961,689           16.1
     Available seat miles
      (000s)                  4,981,377          4,144,820           20.2
     Block hours                121,470            103,423           17.4
     Passenger load factor         69.0 percent       71.5 percent   (2.5)pts.
     Break-even load factor        69.7 percent       71.1 percent   (1.4)pts.
     Average fare                $87.74             $89.81           (2.3)
     Average yield per RPM        12.80 cents        13.31 cents     (3.8)
     Passenger revenue per ASM     8.84 cents         9.51 cents     (7.0)
     Operating cost per ASM        9.22 cents         9.77 cents     (5.6)
     Fuel price neutral cost per
      ASM                          9.50 cents         9.77 cents     (2.8)
     Non-fuel operating cost per
      ASM                          5.94 cents         6.19 cents     (4.0)
     Average cost of aircraft
      fuel per gallon            201.98 cents       218.76 cents     (7.7)
     Gallons of fuel burned  80,932,598         67,886,250           19.2
     Weighted-average number
      of aircraft                   123                102           20.6



                            AirTran Holdings, Inc.
                    Consolidated Statements of Operations
        (In thousands, except per share data and statistical summary)
                                 (Unaudited)

                                    Twelve Months Ended
                                        December 31,               Percent
                                 2006               2005           Change
                             -----------       ------------       ---------
    Operating Revenues:
     Passenger               $1,816,179         $1,397,295           30.0
     Cargo                        3,861              4,363          (11.5)
     Other                       73,315             48,886           50.0
                             -----------       ------------
      Total operating
       revenues               1,893,355          1,450,544           30.5

    Operating Expenses:
     Salaries, wages and
      benefits                  390,348            329,299           18.5
     Aircraft fuel              675,336            462,672           46.0
     Aircraft rent              230,699            192,394           19.9
     Distribution                69,888             67,395            3.7
     Maintenance, materials and
      repairs                   149,448            101,964           46.6
     Landing fees and other
      rents                     100,761             80,774           24.7
     Aircraft insurance and
      security services          25,678             23,100           11.2
     Marketing and advertising   44,792             36,400           23.1
     Depreciation                30,078             20,224           48.7
     Other operating            134,194            112,832           18.9
                             -----------       ------------
      Total operating
       expenses               1,851,222          1,427,054           29.7
                             -----------       ------------
    Operating Income             42,133             23,490           79.4

    Other (Income) Expense:
     Interest income            (21,714)           (11,771)          84.5
     Interest expense            50,861             30,787           65.2
     Capitalized interest       (12,943)            (8,550)          51.4
                             -----------       -------------
    Other (income) expense, net  16,204             10,466           54.8
                             -----------       -------------
    Income Before Income Taxes   25,929             13,024           99.1

    Income Tax Expense           10,415              4,948              -
                             -----------       -------------

    Net Income                  $15,514             $8,076           92.1
                             ===========       =============

    Income per Common Share
     Basic                        $0.17              $0.09           88.9
     Diluted                      $0.17              $0.09           88.9

    Weighted-average Shares
     Outstanding
     Basic                       90,504             87,337            3.6
     Diluted                     92,436             90,185            2.5

     EBITDA                     $72,211            $43,714           65.2
     Operating margin               2.2 percent        1.6 percent    0.6 pts.
     Net margin                     0.8 percent        0.6 percent    0.2 pts.

    Twelve Month Statistical
     Summary:
     Revenue passengers      20,051,219         16,638,214           20.5
     Revenue passenger miles
      (000s)                 13,836,378         11,301,534           22.4
     Available seat miles
      (000s)                 19,007,416         15,369,505           23.7
     Block hours                463,854            383,193           21.0
     Passenger load factor         72.8 percent       73.5 percent   (0.7)pts.
     Break-even load factor        71.7 percent       72.9 percent   (1.2)pts.
     Average fare                $90.58             $83.98            7.9
     Average yield per RPM        13.13 cents        12.36 cents      6.2
     Passenger revenue per ASM     9.56 cents         9.09 cents      5.2
     Operating cost per ASM        9.74 cents         9.28 cents      5.0
     Fuel price neutral cost per
      ASM                          9.15 cents         9.28 cents     (1.4)
     Non-fuel operating cost per
      ASM                          6.19 cents         6.27 cents     (1.3)
     Average cost of aircraft
      fuel per gallon            217.20 cents       180.98 cents     20.0
     Gallons of fuel burned 310,925,717        255,642,845           21.6
     Weighted-average number
      of aircraft                   116                 96           20.8


Pursuant to Regulation G of the Securities and Exchange Commission, we are providing further disclosure of the reconciliation of reported non-GAAP financial measures to their comparable financial measures reported on a basis consistent with U.S. Generally Accepted Accounting Principles (GAAP). We believe that disclosing net margin, break-even load factor, and net income (loss) excluding special items is helpful to our investors in evaluating our operational performance because we believe that the excluded special items are events that do not occur on a regular quarterly basis. Additionally our disclosure of earnings before interest, taxes, depreciation and amortization (EBITDA) and operating costs (CASM), non-fuel operating cost (Non-fuel CASM) and fuel price neutral cost per available seat mile (Fuel price neutral CASM) are consistent with financial measures reported by other airlines and are comparable to financial measures required in our submissions to the United States Department of Transportation.

                            AirTran Holdings, Inc.
               Reconciliation of GAAP Financial Information to
                        Non-GAAP Financial Information
                                (In thousands)
                                 (Unaudited)

                                 Three months ended       Twelve months ended
                                    December 31,             December 31,
                                   2006        2005         2006        2005
                                 --------     ------      --------     ------
    The following table reconciles
     net income to EBITDA:

      Reported net income (loss) $(3,325)      $369       $15,514      $8,076
      Exclude income tax expense
       (benefit)                    (836)     1,716        10,415       4,948
      Exclude interest
       expense, net                6,628      2,721        16,204      10,466
      Exclude depreciation        10,436      6,214        30,078      20,224
                                 --------   --------      --------    --------
          EBITDA                 $12,903    $11,020       $72,211     $43,714
                                 ========   ========      ========    ========


    The following table shows the
     calculation of operating cost
     per ASM and non-fuel
     operating cost per ASM:
      Reported total operating
       expenses                 $459,414   $405,064    $1,851,222  $1,427,054
      ASMs (000s)              4,981,377  4,144,820    19,007,416  15,369,505
        Operating cost
         per ASM (cents)            9.22       9.77          9.74        9.28
                               =========  =========    ==========  ===========

      Reported total
       operating expenses       $459,414   $405,064    $1,851,222  $1,427,054
      Less: aircraft fuel       (163,470)  (148,510)     (675,336)   (462,672)
                               ---------  ---------    ----------  -----------
      Non-fuel operating cost   $295,944   $256,554    $1,175,886    $964,382
                               =========  =========    ==========  ===========

      ASMs (000s)              4,981,377  4,144,820    19,007,416  15,369,505
        Non-fuel operating
         cost per ASM (cents)       5.94       6.19          6.19        6.27
                               =========  =========    ==========  ===========

The following table shows the calculation of fuel price neutral cost per ASM:

     Reported total operating
      expenses                  $459,414   $405,064    $1,851,222  $1,427,054
     Gallons of fuel burned   80,932,598              310,925,717
     Prior year average
      cost of fuel                  2.19                     1.81
     Aircraft fuel based
      on prior year price        177,242                  562,776
     Aircraft fuel for
      current period            (163,470)                (675,336)
                               ----------              -----------
     Adjusted operating cost    $473,186               $1,738,662
                               ========== =========    ===========  =========

     ASMs (000s)               4,981,377  4,144,820    19,007,416  15,369,505
        Fuel-neutral cost
         per ASM (cents)            9.50       9.77          9.15        9.28
                               ========== =========    ===========  =========



                            AirTran Holdings, Inc.
               Reconciliation of GAAP Financial Information to
                  Non-GAAP Financial Information (Continued)
                                (In thousands)
                                 (Unaudited)

                       Twelve months ended December 31,
              2006   2005     2004     2003    2002    2001     2000     1999
              ----   ----     ----     ----    ----    ----     ----     ----

    Net Income (Loss)-Adjusted
    Reported net
     income
    (loss) $15,514 $8,076  $10,103 $100,517 $10,745 $(2,757) $47,436 $(99,394)
    Miscellaneous
     credits,
     net of
     tax        --     --     (815)      --      --      --       --       --
    Payment
     under the
     Emergency
     Wartime
     Supplemental
     Appropriations
     Act, 2003,
     net of
     tax        --     --       --  (36,965)     --      --       --       --
    Deferred
     debt
     discount/
     issuance
     cost
     amorti-
     zation     --     --       --   11,904      --      --       --       --
    Reversal
     of tax
     valuation
     allowance  --     --       --  (15,860)     --      --       --       --
    Payment
     under the
     Stabilization
     Act, 2002,
     net of
     tax        --     --       --       --    (640)     --       --       --
    Impairment
     loss DC-9
     fleet,
     2001       --     --       --       --      --  10,783       --       --
    Impairment
     loss and
     lease
     termination
     B737 fleet,
     2001       --     --       --       --      --  35,287       --       --
    Special
     charges
     due to
     federal
     ground
     stop order,
     net of
     tax        --     --       --        --     --   2,444       --        --
    Payment
     under the
     Stabilization
     Act, 2001,
     net of
     tax        --     --       --        --     -- (28,372)      --        --
    Debt
     discount
     on
     convertible
     debt       --     --       --        --     --   4,291       --        --
    Impairment
     loss DC-9
     fleet, 1999,
     net of
     tax        --     --       --        --     --      --       --   139,816
    Litigation
     settlement
     gain, net
     of tax     --     --       --        --     --      --       --  (18,549)
               ----   ----     ----      ----   ----    ----     ----  -------
    Net income
     excluding
     special
     items $15,514 $8,076   $9,288  $59,596 $10,105 $21,676  $47,436   $21,873
           ======= ======   ======  ======= ======= =======  =======   =======



                            AirTran Holdings, Inc.
               Reconciliation of GAAP Financial Information to
                  Non-GAAP Financial Information (Continued)
                                (In thousands)
                                 (Unaudited)

                                              Twelve months ended December 31,
                                               2006        2005        2004
                                               ----        ----        ----

The following table shows the calculation of operating cost per ASM and non-fuel operating cost per ASM:

    Reported total operating expenses      $1,851,222  $1,427,054  $1,011,921

    ASMs (000s)                            19,007,416  15,369,505  11,977,443

    Operating cost per ASM (cents)               9.74        9.28        8.45
                                                =====       =====       =====

    Reported total operating expenses      $1,851,222  $1,427,054  $1,011,921

    Less: aircraft fuel                      (675,336)   (462,672)   (251,323)
                                            ---------   ---------   ---------

    Non-fuel operating cost                $1,175,886    $964,382    $760,598
                                            =========   =========   =========

    ASMs (000s)                            19,007,416  15,369,505  11,977,443

    Non-fuel operating cost per

     ASM (cents)                                 6.19        6.27        6.35
                                            =========   =========   =========



                                             Twelve months ended December 31,
                                               2003        2002        2001
                                               ----        ----        ----

The following table shows the calculation of operating cost per ASM and non-fuel operating cost per ASM:

    Reported total operating expenses        $831,722    $702,807    $658,406

    ASMs (000s)                            10,046,385   8,255,809   6,537,756

    Operating cost per ASM (cents)               8.28        8.51       10.07
                                                =====       =====       =====

    Reported total operating expenses        $831,722    $702,807    $658,406

    Less: aircraft fuel                      (178,737)   (154,467)   (139,355)
                                            ---------   ---------   ---------

    Non-fuel operating cost                  $652,985    $548,340    $519,051
                                            =========   =========   =========

    ASMs (000s)                            10,046,385   8,255,809   6,537,756

    Non-fuel operating cost per

     ASM (cents)                                 6.50        6.64        7.94
                                            =========   =========   =========
SOURCE  AirTran Holdings, Inc.
   

Adresse
Media: Tad Hutcheson
+1-678-254-7442
Judy Graham-Weaver
+1-678-254-7448
or Financial:
Arne Haak, +1-407-318-5187
all of AirTran
Holdings, Inc.
Web site: http://www.airtran.com
(AAI)

CO: AirTran Holdings, Inc.
ST: Florida
IN: AIR TR







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