AirTran's outlook for 2Q2010 remains 'positive'

AirTran Airways, at the Merill Lynch Global Transportation Conference, outlined (15-Jun-2010) the following regarding its outlook for 2010:

• Network: Operates more than 700 daily departures to over 70 destinations. The carrier has increased its network from 278 daily services in 2000 to 650 in 2006 and an estimated 711 in 2010;
• Unit costs: AirTran stated its cost advantage remains "strong";
• Fleet: Has a fleet of 138 aircraft (86 B717s and 52 B737-700s), with the carrier planning to maintain its fleet at 138 aircraft throughout 2010. The fleet is expected to increase to 144 aircraft in 2011 and 150 in 2012;
• Capacity: Reduced capacity (ASMs) by 2% in 2009. The carrier expects to increase capacity by 3-4% planned in 2010, with a , with the carrier's fleet to increase to 145 in 2011 (down from a previously planned 188 aircraft), with capacity growth of 2.5-3.5% in 2011 and 3.5-4.5% in 2012;
• Hedging: Hedged 56% of its fuel requirements for FY2010, with 51% in 2Q2010, 70% in 3Q2010 and 57% in 4Q2010. 43% of the carrier's fuel hedging requirements are currently covered for 2011;
• Debt plans: The carrier plans to pay USD96 million of convertible debt with cash in Jul-2010;
• Outlook: The carrier stated the outlook for 2Q2010 is "positive", with capacity up approximately 4.5% and summer unit revenue trends continued to "accelerate". The carrier stated stage length adjusted unit revenues are now "well ahead" of 2008 levels. The carrier expects 2Q1010 TRASM to be up 11-12% due to softer May close-in revenues, while Jun-2010 unit revenues are "likely to approach 20%" on a year-on-year basis. Non fuel costs are expected to increase by 3.5-4.0% in the quarter, with maintenance, airport and revenue-related costs the leading contributors to the cost outlook. FY2010 non-fuel unit costs are expected to up by 4-5%. [more - Presentation]