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AirTran Airways' deep second quarter losses spur further capacity cuts


AirTran Holdings, the parent company of AirTran Airways, reported a net loss of USD13.5 million in the three months ended 30-Jun-08 (2Q08), compared to a net profit of USD42.1 million in the previously corresponding period, resulting in a -6.6% operating margin, a 19.3 ppt year-on-year reduction. The quarter's loss was largely attributable to the effects of record high fuel costs, with fuel costs increasing by more than USD166 million in the quarter. [1424 words]

Unlock the following content in this report:


  • Some bright spots as AirTran digs in
  • Record load factor; but load factor falling short of break-even level
  • Unit costs and average fare up in 2Q08; non-fuel unit costs and yield falls
  • Fuel representing almost 50% of total operating expenses
  • Increase fuel hedge to cover 70% of fuel needs for 2H08
  • Taking action in current difficult environment

Graphs and data:

  • AirTran financial highlights for three months ended 30-Jun-08
  • AirTran operating margin: 2Q05 to 2Q08
  • AirTran load factor vs break even load factor: 2Q05 to 2Q08
  • AirTran yield (per RPM) vs cost (per ASK): 2Q05 to 2Q08
  • AirTran fuel cost as a proportion of total operating expenses: 2Q05 to 2Q08
  • US carriers' fuel hedging positions
  • AirTran key events during 2Q08
  • AirTran Airways capacity (ASK) growth: Jan-04 to May-08
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