Posted on: 20 April 2010 by Mark Howells
AirTran Holdings, the parent company of AirTran Airways,has reported a net loss of $12.0 million for the first quarter of 2010.
Excluding $4.7 million in unrealised gains on future fuel hedges, the company’s net loss for the quarter would have been $16.7 million dollars. The company says the impact of historic winter snowstorms along the US Eastern Seaboard and more than a 50% increase in fuel expenses offset record total revenues for the first quarter.
Those record first quarter revenues totalled $605.1 million on a record load factor of 77.2%. Operating costs increased by 21.8% or $107.8 million as compared to the same period last year. Fuel was the single largest contributor to the cost increase, accounting for more than 60% or $67.3 million of the increase. Last year, crude oil averaged $41 a barrel in the first quarter but has risen to $78 a barrel this year. Winter storms further pressured unit costs due to reduced capacity and additional expenses related to extreme weather during the quarter.
"This winter proved to be one of historic inclement weather for much of the East Coast and particularly for some of our busiest operations like Baltimore/Washington and Atlanta," remarked Bob Fornaro, AirTran Airways’ chairman, president and chief executive officer. "Even though the weather was tough this winter, we are experiencing significant revenue growth and passenger demand. We are well positioned for the future and are beginning to reap the rewards of our diversification efforts and the broader economic recovery."
AirTran Airways’ unrestricted cash position at quarter’s end was $534 million and its revolving line of credit was undrawn. Based on current cost and revenue trends, AirTran Airways’ outlook for the second quarter 2010 relative to the prior year is for available seat miles (ASMs) to increase approximately 4.0%, total unit revenue per ASM (TRASM) to increase by 13.0%-14.0%; average economic cost per gallon of fuel, all-in of $2.37 to $2.42; and non-fuel unit operating cost per ASM to increase by 4.0%-4.5%.