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AirTran Looks To Make Cuts Amid Losses

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The Associated Press

The Tampa Tribune

Published: July 30, 2008

ATLANTA - Growth is no longer on AirTran Airways' radar screen, as it announced plans Tuesday to further cut capacity and defer aircraft deliveries in the face of soaring fuel prices that caused it to swing to a second-quarter loss.

"Our priorities have clearly shifted," Chief Executive Robert Fornaro told analysts during a conference call. "Growth is far down the list of things we're interested in."

The quarterly results, when one-time items are excluded, missed Wall Street expectations, but AirTran shares jumped more than 19 percent as other airline stocks rose as well with oil falling $2.54 to settle at $122.19 a barrel on the New York Mercantile Exchange. The carrier also said it was successful in strengthening its cash balance and extending a key credit card processing agreement.

AirTran, which has its hub in Atlanta, said it lost $13.5 million, or 12 cents a share, in the quarter, compared with a profit of $42.1 million, or 42 cents a share, a year earlier.

Excluding one-time items, AirTran, a unit of AirTran Holdings Inc., said its adjusted loss in the quarter was $31.12 million, or 29 cents a share. Revenue increased to $693.4 million from $613.5 million a year earlier. AirTran's fuel costs rose 82.6 percent in the quarter.

Analysts forecast revenue to come in at $702.1 million for the latest April-June quarter.

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