- Record Year-to-Date Net Income of $117.6 Million -
ORLANDO, Fla., Oct. 21 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc.,
(NYSE: AAI), the parent company of AirTran Airways, Inc., today reported net
income of $10.4 million or $0.08 per diluted share for the third quarter of
2009. These results represent a $105.0 million improvement over the third
quarter of 2008.
The operating income for the third quarter of 2009 was $37.0 million and is
the second highest third quarter operating income in Company history.
The Company has been profitable in each quarter of 2009, and has posted
year-to-date records in operating income of $150.9 million, net income of
$117.6 million, and load factor of 80.4 percent.
Included in net income for the third quarter were $6.3 million of unrealized
losses on the Company's future fuel hedge portfolio and a $6.4 million gain
primarily related to the Company's retention of deposits from a terminated
aircraft sales contract. Excluding these items, the economic net income for
the third quarter of 2009 was $10.6 million or $0.08 per diluted share.
"Our 8,500 dedicated Crew Members are committed to running the finest airline
in the U.S., and their outstanding efforts have resulted in AirTran being
profitable every quarter this year," said Bob Fornaro, AirTran Airways'
chairman, president and chief executive officer. "Through their hard work and
dedication and the loyalty of our customers, we have been very successful
despite these difficult economic times."
During the third quarter, AirTran Airways continued to expand its network by
adding point-to-point service from Atlanta, Baltimore, Milwaukee, and Orlando.
The industry's low-cost leader introduced a significantly expanded Caribbean
schedule with new service to Montego Bay, Jamaica, Nassau, Bahamas, and Aruba,
as well as new service to Key West, Fla.
"The year-over-year improvement in our financial performance is directly
related to maintaining our industry-leading low cost structure while providing
'best-in-class' service and outstanding value to our business and leisure
passengers," said Arne Haak, senior vice president of finance, treasurer and
chief financial officer for AirTran Airways. "AirTran Airways was among the
first airlines to react to the changing economic environment in 2008, and our
operating performance this year reflects those actions."
Other highlights of AirTran Airways' accomplishments in the third quarter and
to date include:
-- AirTran Airways is the first and only major airline to equip every
flight on all aircraft with high-speed Gogo Inflight Internet
-- Expanded Caribbean and Florida service and announced the following new
destinations: Montego Bay, Jamaica; Nassau, Bahamas; Aruba and Key
West,
Fla.
-- Bolstered liquidity by extending and enhancing a $175 million credit
facility and completing over $165 million in equity and debt financing
-- Announced multi-year marketing partnerships with the Atlanta Falcons
(and launched special livery aircraft, Falcons One) and the Orlando
Magic
AirTran Holdings, Inc. will conduct a conference call to discuss the quarter's
results today at 9:30 a.m. EDT. A live broadcast of the conference call will
be available via the Internet in the investor relations section at
http://www.airtran.com.
AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE: AAI) and a
Fortune 1000 company, has been ranked the number one low cost carrier in the
Airline Quality Rating study for the past two years. AirTran is the only
major airline with Gogo Inflight Internet on every flight and offers
coast-to-coast service on North America's newest all-Boeing fleet. Its
low-cost, high-quality product also includes assigned seating, Business Class
and complimentary XM Satellite Radio on every flight. To book a flight, visit
http://www.airtran.com.
Editor's note: Statements regarding the Company's operational and financial
success, business model, expectation about future success, improved
operational performance and our ability to maintain or improve our low costs
are forward-looking statements and are not historical facts. Instead, they are
estimates or projections involving numerous risks or uncertainties, including
but not limited to, consumer demand and acceptance of services offered by the
Company, the Company's ability to maintain current cost levels, fare levels
and actions by competitors, regulatory matters and general economic
conditions. Additional information concerning factors that could cause actual
results to differ materially from those in the forward-looking statements is
contained from time to time in the Company's SEC filings, including but not
limited to the Company's annual report on Form 10-K for the year ended
December 31, 2008. The Company disclaims any obligation or duty to update or
correct any of its forward-looking statements.
Media Contacts: AirTran Airways:
Christopher White (Media)
678-254-7442
Jason Bewley (Investor Relations)
407-318-5188
AirTran Holdings, Inc.
Consolidated Statements of Operations
(In thousands, except per share data and statistical summary)
(Unaudited)
Three Months Ended
September 30,
----------------------- Percent
2009 2008 Change
---- ---- -------
Operating Revenues:
Passenger $529,435 $635,316 (16.7)
Other 67,967 37,976 79.0
------ ------
Total operating
revenues 597,402 673,292 (11.3)
Operating Expenses:
Aircraft fuel 190,235 363,882 (47.7)
Salaries, wages and
benefits 122,895 120,170 2.3
Aircraft rent 60,632 60,542 0.1
Maintenance,
materials and
repairs 49,973 40,022 24.9
Distribution 25,306 26,857 (5.8)
Landing fees and
other rents 37,573 36,196 3.8
Aircraft insurance
and security
services 5,440 5,470 (0.5)
Marketing and
advertising 9,349 9,948 (6.0)
Depreciation 13,899 15,445 (10.0)
Gain on asset
dispositions (6,379) (9,254) (31.1)
Other operating 51,446 51,427 0.0
------ ------
Total operating
expenses 560,369 720,705 (22.2)
------- -------
Operating Income
(Loss) 37,033 (47,413) -
Other (Income)
Expense:
Interest income (3,835) (908) -
Interest expense 20,089 22,592 (11.1)
Capitalized interest (179) (1,202) (85.1)
Other 18 - -
Net losses
on derivative
financial
instruments 10,281 41,520 (75.2)
------ ------
Other (income)
expense, net 26,374 62,002 (57.5)
------ ------
Income (Loss) Before
Income Taxes 10,659 (109,415) -
Income tax expense
(benefit) 233 (14,862) -
--- -------
Net Income (Loss) $10,426 $(94,553) -
======= ========
Income (Loss) per
Common Share
Basic $0.09 $(0.81) -
Diluted $0.08 $(0.81) -
Weighted-average
Shares Outstanding
Basic 120,482 117,177 2.8
Diluted 140,625 117,177 20.0
Operating margin 6.2 percent (7.0) percent 13.2 pts.
Net margin 1.7 percent (14.0) percent 15.7 pts.
Net margin, adjusted* 1.8 percent (7.2) percent 9.0 pts.
Third Quarter
Statistical
Summary:
Revenue passengers 6,533,184 6,612,928 (1.2)
Revenue passenger
miles (000s) 5,172,347 5,260,949 (1.7)
Available seat miles
(000s) 6,170,977 6,221,858 (0.8)
Passenger load
factor 83.8 percent 84.6 percent (0.8) pts.
Departures 65,559 66,337 (1.2)
Average stage length
(miles) 749 745 0.5
Average fare $81.04 $96.07 (15.6)
Average yield per
RPM 10.24 cents 12.08 cents (15.2)
Passenger revenue
per ASM 8.58 cents 10.21 cents (16.0)
Total revenue per ASM 9.68 cents 10.82 cents (10.5)
Operating cost per
ASM 9.08 cents 11.58 cents (21.6)
Operating cost per
ASM, adjusted* 9.18 cents 11.73 cents (21.7)
Non-fuel operating
cost per ASM 6.00 cents 5.73 cents 4.7
Non-fuel operating
cost per ASM,
adjusted* 6.10 cents 5.88 cents 3.7
Average cost of
aircraft fuel per
gallon $1.98 $3.82 (48.2)
Average economic
cost of aircraft
fuel per gallon $2.02 $3.67 (45.0)
Gallons of fuel
burned (000s) 96,098 95,303 0.8
Operating aircraft
in fleet at end of
period 136 139 (2.2)
Average daily
aircraft
utilization (hours) 11.4 11.2 1.8
Full-time equivalent
employees at end of
period 7,717 7,372 4.7
* Statistical calculations for 2009 and 2008, on an adjusted basis,
exclude gains and losses as detailed in the attached Reconciliation
of GAAP Financial Information to Non-GAAP Financial Information. Our
third quarter 2008 financial data has been restated to reflect the
required retrospective application of our adoption of Accounting
Standards Codification (ASC) 470-20, "Debt with Conversion and
Other Options - Cash Conversion." The restatement resulted in a $1.3
million increase and $12.5 million decrease to operating loss and
net loss, respectively, for the three months ended
September 30, 2008.
AirTran Holdings, Inc.
Consolidated Statements of Operations
(In thousands, except per share data and statistical summary)
(Unaudited)
Nine Months Ended
September 30,
------------------------ Percent
2009 2008 Change
---- ---- ------
Operating Revenues:
Passenger $1,552,507 $1,860,379 (16.5)
Other 190,503 102,684 85.5
------- -------
Total operating
revenues 1,743,010 1,963,063 (11.2)
Operating Expenses:
Aircraft fuel 483,008 1,000,451 (51.7)
Salaries, wages and
benefits 363,627 362,469 0.3
Aircraft rent 181,621 182,234 (0.3)
Maintenance,
materials and
repairs 145,884 124,795 16.9
Distribution 70,540 77,081 (8.5)
Landing fees and
other rents 108,722 104,990 3.6
Aircraft insurance
and security
services 15,756 16,310 (3.4)
Marketing and
advertising 30,947 31,114 (0.5)
Depreciation 42,120 43,558 (3.3)
Gain on asset
dispositions (3,073) (15,797) (80.5)
Impairment of
goodwill - 8,350 -
Other operating 152,952 156,748 (2.4)
------- -------
Total operating
expenses 1,592,104 2,092,303 (23.9)
--------- ---------
Operating Income
(Loss) 150,906 (129,240) -
Other (Income)
Expense:
Interest income (5,212) (5,372) (3.0)
Interest expense 61,068 63,335 (3.6)
Capitalized interest (1,244) (7,028) (82.3)
Other (4,278) - -
Net (gains) losses
on derivative
financial
instruments (17,944) 3,150 -
------- -----
Other (income)
expense, net 32,390 54,085 (40.1)
------ ------
Income (Loss) Before
Income Taxes 118,516 (183,325) -
Income tax expense
(benefit) 945 (38,585) -
--- -------
Net Income (Loss) $117,571 $(144,740) -
======== =========
Income (Loss) per
Common Share
Basic $0.98 $(1.36) -
Diluted $0.86 $(1.36) -
Weighted-average
Shares Outstanding
Basic 120,158 106,170 13.2
Diluted 139,617 106,170 31.5
Operating margin 8.7 percent (6.6) percent 15.3 pts.
Net margin 6.7 percent (7.4) percent 14.1 pts.
Net margin, adjusted* 4.8 percent (6.4) percent 11.2 pts.
Nine Month
Statistical
Summary:
Revenue passengers 18,086,257 18,864,674 (4.1)
Revenue passenger
miles (000s) 14,076,956 14,737,024 (4.5)
Available seat miles
(000s) 17,498,261 18,450,013 (5.2)
Passenger load
factor 80.4 percent 79.9 percent 0.5 pts.
Departures 188,576 198,978 (5.2)
Average stage length
(miles) 740 737 0.4
Average fare $85.84 $98.62 (13.0)
Average yield per
RPM 11.03 cents 12.62 cents (12.6)
Passenger revenue
per ASM 8.87 cents 10.08 cents (12.0)
Total revenue per
ASM 9.96 cents 10.64 cents (6.4)
Operating cost per
ASM 9.10 cents 11.34 cents (19.8)
Operating cost per
ASM, adjusted* 9.12 cents 11.38 cents (19.9)
Non-fuel operating
cost per ASM 6.34 cents 5.92 cents 7.1
Non-fuel operating
cost per ASM,
adjusted* 6.36 cents 5.96 cents 6.7
Average cost of
aircraft fuel per
gallon $1.77 $3.53 (49.9)
Average economic
cost of aircraft
fuel per gallon $1.81 $3.45 (47.5)
Gallons of fuel
burned (000s) 272,264 283,169 (3.9)
Operating aircraft
in fleet at end of
period 136 139 (2.2)
Average daily
aircraft
utilization (hours) 11.0 11.3 (2.7)
Full-time equivalent
employees at end of
period 7,717 7,372 4.7
* Statistical calculations for 2009 and 2008, on an adjusted basis,
exclude gains and losses as detailed in the attached Reconciliation of
GAAP Financial Information to Non-GAAP Financial Information. Our 2008
financial data has been restated to reflect the required retrospective
application of our adoption of Accounting Standards Codification (ASC)
470-20, "Debt with Conversion and Other Options - Cash Conversion."
The restatement resulted in a $2.4 million increase and $10.7 million
decrease to operating loss and net loss, respectively, for the nine
months ended September 30, 2008.
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
Three and Nine Months Ended September 30, 2009 and 2008
We prepare our financial statements in accordance with generally accepted
accounting principles (GAAP). Within our press release, we make reference to
certain non-GAAP financial measures including net margin. Our disclosures may
also exclude special or non-recurring items that we believe should be taken
into consideration to more accurately measure and monitor our operating
performance. Our disclosure of non-fuel operating cost per available seat
mile (non-fuel CASM) is consistent with financial measures reported by other
airlines and analysts. We believe that non-fuel CASM and non-fuel CASM
adjusted provide a useful understanding of our operations. Both the cost and
availability of fuel are subject to many economic and political factors and
are therefore beyond our control. Our press release also contains information
regarding the components of GAAP fuel expense and net gains and losses on
derivative financial instruments. These amounts have been included as
supplemental information.
We disclose both the average fuel cost per gallon and the average economic
fuel cost per gallon. Average fuel cost per gallon is based on fuel expense as
measured by GAAP and includes realized gains and losses on fuel related
derivatives instruments which are accounted for as hedges. Average economic
fuel cost per gallon includes realized gains and losses on all fuel related
derivative instruments, including those which were not accounted for as
hedges, but does not include unrealized gains and losses recognized under
GAAP.
We consider our fuel derivative contracts an important tool in managing costs
related to jet fuel purchases. We believe it is important to assess our
financial performances by including the effect of the net cash settlements and
excluding the mark-to-market adjustments for our unrealized gains and losses
recorded in the income statement for contracts settling in future periods.
We believe that these measures represent important internal measures of
performance. Accordingly, where these non-GAAP measures are provided, it is
done so that investors have the same financial data that management uses in
evaluating performance with the belief that it will assist the investment
community in assessing our underlying performance on a year-over-year and a
quarter-over-quarter basis. However, because these measures are not determined
in accordance with accounting principles generally accepted in the United
States, such measures are susceptible to varying calculations and not all
companies calculate the measures in the same manner. As a result the
aforementioned measures as presented may not be directly comparable to
similarly titled measures presented by other companies. The non-GAAP measures
are presented as supplemental information and not as alternatives to any GAAP
measurements.
Dollars in thousands,
unless otherwise
noted Three months ended Nine months ended
September 30, September 30,
----------------- ------------------
2009 2008 2009 2008
---- ---- ---- ----
The following table
calculates net
margin, adjusted:
Net income
(loss) $10,426 $(94,553) $117,571 $(144,740)
(Gain) loss on debt
extinguishment,
net of taxes 251 - (3,333) -
Unrealized
(gains) losses
on derivative
financial
Instruments,
net of taxes 6,260 55,547 (27,663) 26,541
Gain on
asset
dispositions,
net of taxes (6,379) (9,254) (3,073) (15,797)
Impairment
of goodwill - - - 8,350
--- --- --- -----
Net income
(loss), adjusted $10,558 $(48,260) $83,502 $(125,646)
======= ======== ======= =========
Total operating
revenues $597,402 $673,292 $1,743,010 $1,963,063
-------- -------- --------- ----------
Net margin,
adjusted 1.8% (7.2)% 4.8% (6.4)%
=== ==== === ====
The following table
calculates
operating cost
per ASM, adjusted:
Total operating
expenses $560,369 $720,705 $1,592,104 $2,092,303
Gain on asset
dispositions 6,379 9,254 3,073 15,797
Impairment of
goodwill - - - (8,350)
--- --- --- ------
Operating
expenses,
adjusted $566,748 $729,959 $1,595,177 $2,099,750
======== ======== ========== ==========
ASMs (000) 6,170,977 6,221,858 17,498,261 18,450,013
--------- --------- ---------- ----------
Operating
cost per ASM
(cents),
adjusted 9.18 11.73 9.12 11.38
==== ===== ==== =====
The following table
calculates non-fuel
operating cost
per ASM and non-fuel
operating cost
per ASM, adjusted:
Total operating
expenses $560,369 $720,705 $1,592,104 $2,092,303
Aircraft fuel (190,235) (363,882) (483,008) (1,000,451)
-------- -------- -------- ----------
Operating
expenses,
adjusted $370,134 $356,823 $1,109,096 $1,091,852
======== ======== ========== ==========
ASMs (000) 6,170,977 6,221,858 17,498,261 18,450,013
--------- --------- ---------- ----------
Non-fuel
operating cost
per ASM (cents) 6.00 5.73 6.34 5.92
==== ==== ==== ====
Total operating
expenses $560,369 $720,705 $1,592,104 $2,092,303
Aircraft fuel (190,235) (363,882) (483,008) (1,000,451)
Gain on asset
dispositions 6,379 9,254 3,073 15,797
Impairment
of goodwill - - - (8,350)
--- --- --- ------
Non-fuel operating
cost, adjusted $376,513 $366,077 $1,112,169 $1,099,299
======== ======== ========== ==========
ASMs (000) 6,170,977 6,221,858 17,498,261 18,450,013
--------- --------- ---------- ----------
Non-fuel
operating
cost per ASM
(cents),
adjusted 6.10 5.88 6.36 5.96
==== ==== ==== ====
The following table
calculates average
economic cost of
aircraft fuel per
gallon:
Aircraft fuel
expense per
GAAP $190,235 $363,882 $483,008 $1,000,451
Realized (gains)
losses on derivatives
that do not qualify
for hedge accounting,
recorded in net (gains)
losses on derivative
financial instruments 4,021 (14,027) 9,719 (23,391)
----- ------- ----- ------
Economic fuel
expense $194,256 $349,855 $492,727 $977,060
======== ======== ======== ========
Gallons of fuel
burned (000s) 96,098 95,303 272,264 283,169
------ ------ ------- -------
Economic cost
of aircraft
fuel per gallon $2.02 $3.67 $1.81 $3.45
===== ===== ===== =====
The following
table calculates
diluted earnings
per share, adjusted
for the three months
ended September 30,
2009 and 2008:
Net income $10,426 (94,553)
Gain on debt
extinguishment,
net of taxes 251 --
Unrealized losses
on derivative
financial
instruments,
net of taxes 6,260 55,547
Gain on asset
dispositions,
net of taxes (6,379) (9,254)
------ ------
Net income,
adjusted $10,558 (48,260)
Plus income
effect of
assumed
conversion-interest
on convertible debt 956 --
--- ---
Income after
assumed conversion,
diluted $11,514 (48,260)
Adjusted weighted-
average shares
outstanding,
diluted 140,625 117,177
Diluted earnings
per share (dollars),
adjusted $0.08 $(0.41)
===== ======
COMPANY ESTIMATES/FORWARD LOOKING STATEMENTS
The following table contains our year-over-year capacity projection for
the remainder of 2009:
Period Forecasted ASMs
------- ---------------
Q4 2009 Up approximately 7%
The following table contains our year-over-year projections for Q4 2009
total unit revenues, non-fuel operating unit costs, and average cost per
gallon of fuel, all in:
Q4 Projection
---------------------
Total unit revenue per ASM Down 7% to 8%
Non-fuel unit operating cost per
ASM in Q4 Up 1% to 2%
Average cost per gallon of fuel,
all-in $2.08 to $2.12
As of September 30, 2009, we had aggregate unrestricted cash, cash
equivalents, and short-term investments of $408.2 million, and we also had
$55.2 million of restricted cash. During October 2009, we completed a
public offering of $115.0 million in 5.25% convertible senior notes due in
2016 and a public offering of 11.3 million shares of our common stock at a
price of $5.08 per share. The net proceeds from the two offerings
aggregated approximately $166.3 million.
SOURCE AirTran Airways
Christopher White (Media), +1-678-254-7442; or Jason Bewley (Investor
Relations), +1-407-318-5188, both of AirTran Airways
