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AirTran Airways - Disappointingly deep third quarter losses spur further capacity cuts


AirTran Holdings, the parent company of AirTran Airways, reported a concerning USD106.7 million net loss for the three months ended 30-Sep-08 (3Q08), compared to a net profit of USD10.6 million in the previously corresponding period, resulting in a -15.9% net margin, a 17.6 ppt year-on-year reduction. [1200 words]

Unlock the following content in this report:


  • Non-fuel unit costs continue to decline
  • Fuel representing over 50% of total operating expenses
  • Record load factor, but break-even load factor shoots through the roof
  • Taking action in current difficult environment
  • 1. Capacity to be down 6-7% in 4Q08; targeting 3-7% capacity reduction in 2009
  • 2. Reducing workforce and enacting pay reductions
  • 3. Reducing capital commitments

Graphs and data:

  • AirTran financial highlights for three months ended 30-Sep-08
  • AirTran operating margin: 2Q05 to 3Q08
  • Select US carrier non-fuel unit cost (per ASK): 2Q05 to 3Q08
  • AirTran fuel cost as a proportion of total operating expenses
  • AirTran load factor vs break even load factor: 2Q05 to 3Q08
  • AirTran key events during 3Q08
  • AirTran Airways capacity (ASK) growth: Jan-04 to Aug-08
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