Revenues Grow By Over 30 Percent on a 23.7 Percent Increase in Capacity. Annual Operating Revenues Top $1.8 Billion
ORLANDO, Fla. – AirTran Holdings, Inc., (NYSE: AAI), the parent company of AirTran Airways, Inc., today reported net income of $15.5 million for the full year 2006 or $0.17 per diluted share. For the fourth quarter, AirTran reported a net loss of $3.3 million or $0.04 per diluted share.
For the full year and fourth quarter of 2005, AirTran reported net income of $8.1 million or $0.09 per diluted share and $0.4 million or breakeven per diluted share, respectively.
„The year 2006 was very challenging with our average fuel prices again rising over 20 percent for the third year in a row,“ said AirTran Airways‘ chairman and chief executive officer Joe Leonard. „I am very proud of the tremendous effort from all of our Crew Members here at AirTran Airways. Their hard work and dedication has resulted in our eighth consecutive profitable year despite these difficult conditions.“
During the fourth quarter, capacity grew by 20.2 percent and traffic rose by 16.1 percent, resulting in a load factor of 69.0 percent, a 2.5 point decline year over year. Revenues for the fourth quarter grew 12.7 percent. For the full year, capacity increased by 23.7 percent and passenger revenues grew by 30 percent, which resulted in a 5.2 percent increase in unit revenue.
Commenting on the fourth quarter, AirTran Airways‘ president and chief operating officer, Bob Fornaro, said, „While we were profitable in November and December, these profits were insufficient to offset our losses in October.“ Fornaro went on to say, „We are encouraged by lower capacity levels in our markets and by recent declines in fuel prices as we go into the first quarter of 2007.“
AirTran Airways reduced its unit operating costs by 5.6 percent in the fourth quarter primarily as a result of a 7.7 percent decline in fuel prices. In addition, non-fuel unit costs decreased by 4 percent to 5.94 cents.
Stan Gadek, AirTran Airways‘ chief financial officer, said, „I am pleased that for the fifth consecutive year we have lowered our non-fuel unit costs, and that this quarter’s non-fuel unit costs came in below six cents per seat mile. Our ability to deliver a high quality product with an industry leading cost structure is one of our company’s great assets.“
Recent highlights of AirTran Airways' accomplishments include:
* Took delivery of twenty new Boeing 737-700 aircraft and two new 717-200
aircraft in 2006.
* Secured financing on all 2007 aircraft deliveries.
* Closed on new financing for aircraft pre-delivery deposits for 2008
aircraft deliveries.
* Initiated new service to White Plains, N.Y., and Seattle, Wash. in 2006.
* Launched over 20 new non-stop routes in 2006.
* Announced the airline will begin service to Newburgh, N.Y., Daytona
Beach, Fla., Phoenix, Ariz., San Diego, Calif., and St. Louis, Mo. in
2007.
* Announced over 15 new non-stop routes in 2007.
* Created over 700 new jobs throughout our network in 2006.
AirTran Holdings, Inc., will conduct a conference call to discuss quarterly results today at 10:00 a.m. Eastern Standard Time. A live broadcast of the conference call will be available via the internet at http://www.airtran.com.
AirTran Airways, a Fortune 1000 company and one of America’s largest low-fare airlines with 8,000 friendly, professional Crew Members, operates nearly 700 daily flights to 54 destinations. The airline’s hub is at Hartsfield-Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways‘ aircraft features the fuel-efficient Boeing 737-700 and 717-200 to create America’s youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. For reservations or more information, visit http://www.airtran.com (America Online Keyword: AirTran).
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/A for the year ended December 31, 2005. The Company disclaims any obligation or duty to update or correct any of its forward-looking statements.
Media Contacts: Tad Hutcheson
tad.hutcheson@airtran.com
678.254.7442
Judy Graham-Weaver
judy.graham-weaver@airtran.com
678.254.7448
Arne Haak (Financial)
407.318.5187
* Attached: Consolidated Statements of Operations *
AirTran Holdings, Inc.
Consolidated Statements of Operations
(In thousands, except per share data and statistical summary)
(Unaudited)
Three Months Ended
December 31, Percent
2006 2005 Change
---------- ---------- ---------
Operating Revenues:
Passenger $440,209 $394,103 11.7
Cargo 918 1,817 (49.5)
Other 20,754 13,950 48.8
---------- ----------
Total operating revenues 461,881 409,870 12.7
Operating Expenses:
Salaries, wages and
benefits 102,713 88,293 16.3
Aircraft fuel 163,470 148,510 10.1
Aircraft rent 60,618 51,136 18.5
Distribution 16,139 16,770 (3.8)
Maintenance, materials and
repairs 36,548 27,348 33.6
Landing fees and other
rents 24,068 19,287 24.8
Aircraft insurance and
security services 6,797 6,231 9.1
Marketing and advertising 9,263 10,166 (8.9)
Depreciation 10,436 6,214 67.9
Other operating 29,362 31,109 (5.6)
---------- ----------
Total operating expenses 459,414 405,064 13.4
---------- ----------
Operating Income 2,467 4,806 (48.7)
Other (Income) Expense:
Interest income (5,292) (3,818) 38.6
Interest expense 15,065 9,223 63.3
Capitalized interest (3,145) (2,684) 17.2
---------- ----------
Other (income) expense, net 6,628 2,721 -
---------- ----------
Income (Loss) Before Income
Taxes (4,161) 2,085 -
Income Tax Expense (Benefit) (836) 1,716 -
---------- ----------
Net Income (Loss) $(3,325) $369 -
========== ==========
Income (Loss) per Common
Share
Basic $(0.04) $- -
Diluted $(0.04) $- -
Weighted-average Shares
Outstanding
Basic 91,092 87,850 3.7
Diluted 91,092 91,208 (0.1)
EBITDA $12,903 $11,020 17.1
Operating margin 0.5 percent 1.2 percent (0.7)pts.
Net margin (0.7)percent 0.1 percent (0.8)pts.
Fourth Quarter Statistical
Summary:
Revenue passengers 5,017,232 4,388,198 14.3
Revenue passenger miles
(000s) 3,438,110 2,961,689 16.1
Available seat miles
(000s) 4,981,377 4,144,820 20.2
Block hours 121,470 103,423 17.4
Passenger load factor 69.0 percent 71.5 percent (2.5)pts.
Break-even load factor 69.7 percent 71.1 percent (1.4)pts.
Average fare $87.74 $89.81 (2.3)
Average yield per RPM 12.80 cents 13.31 cents (3.8)
Passenger revenue per ASM 8.84 cents 9.51 cents (7.0)
Operating cost per ASM 9.22 cents 9.77 cents (5.6)
Fuel price neutral cost per
ASM 9.50 cents 9.77 cents (2.8)
Non-fuel operating cost per
ASM 5.94 cents 6.19 cents (4.0)
Average cost of aircraft
fuel per gallon 201.98 cents 218.76 cents (7.7)
Gallons of fuel burned 80,932,598 67,886,250 19.2
Weighted-average number
of aircraft 123 102 20.6
AirTran Holdings, Inc.
Consolidated Statements of Operations
(In thousands, except per share data and statistical summary)
(Unaudited)
Twelve Months Ended
December 31, Percent
2006 2005 Change
----------- ------------ ---------
Operating Revenues:
Passenger $1,816,179 $1,397,295 30.0
Cargo 3,861 4,363 (11.5)
Other 73,315 48,886 50.0
----------- ------------
Total operating
revenues 1,893,355 1,450,544 30.5
Operating Expenses:
Salaries, wages and
benefits 390,348 329,299 18.5
Aircraft fuel 675,336 462,672 46.0
Aircraft rent 230,699 192,394 19.9
Distribution 69,888 67,395 3.7
Maintenance, materials and
repairs 149,448 101,964 46.6
Landing fees and other
rents 100,761 80,774 24.7
Aircraft insurance and
security services 25,678 23,100 11.2
Marketing and advertising 44,792 36,400 23.1
Depreciation 30,078 20,224 48.7
Other operating 134,194 112,832 18.9
----------- ------------
Total operating
expenses 1,851,222 1,427,054 29.7
----------- ------------
Operating Income 42,133 23,490 79.4
Other (Income) Expense:
Interest income (21,714) (11,771) 84.5
Interest expense 50,861 30,787 65.2
Capitalized interest (12,943) (8,550) 51.4
----------- -------------
Other (income) expense, net 16,204 10,466 54.8
----------- -------------
Income Before Income Taxes 25,929 13,024 99.1
Income Tax Expense 10,415 4,948 -
----------- -------------
Net Income $15,514 $8,076 92.1
=========== =============
Income per Common Share
Basic $0.17 $0.09 88.9
Diluted $0.17 $0.09 88.9
Weighted-average Shares
Outstanding
Basic 90,504 87,337 3.6
Diluted 92,436 90,185 2.5
EBITDA $72,211 $43,714 65.2
Operating margin 2.2 percent 1.6 percent 0.6 pts.
Net margin 0.8 percent 0.6 percent 0.2 pts.
Twelve Month Statistical
Summary:
Revenue passengers 20,051,219 16,638,214 20.5
Revenue passenger miles
(000s) 13,836,378 11,301,534 22.4
Available seat miles
(000s) 19,007,416 15,369,505 23.7
Block hours 463,854 383,193 21.0
Passenger load factor 72.8 percent 73.5 percent (0.7)pts.
Break-even load factor 71.7 percent 72.9 percent (1.2)pts.
Average fare $90.58 $83.98 7.9
Average yield per RPM 13.13 cents 12.36 cents 6.2
Passenger revenue per ASM 9.56 cents 9.09 cents 5.2
Operating cost per ASM 9.74 cents 9.28 cents 5.0
Fuel price neutral cost per
ASM 9.15 cents 9.28 cents (1.4)
Non-fuel operating cost per
ASM 6.19 cents 6.27 cents (1.3)
Average cost of aircraft
fuel per gallon 217.20 cents 180.98 cents 20.0
Gallons of fuel burned 310,925,717 255,642,845 21.6
Weighted-average number
of aircraft 116 96 20.8
Pursuant to Regulation G of the Securities and Exchange Commission, we are providing further disclosure of the reconciliation of reported non-GAAP financial measures to their comparable financial measures reported on a basis consistent with U.S. Generally Accepted Accounting Principles (GAAP). We believe that disclosing net margin, break-even load factor, and net income (loss) excluding special items is helpful to our investors in evaluating our operational performance because we believe that the excluded special items are events that do not occur on a regular quarterly basis. Additionally our disclosure of earnings before interest, taxes, depreciation and amortization (EBITDA) and operating costs (CASM), non-fuel operating cost (Non-fuel CASM) and fuel price neutral cost per available seat mile (Fuel price neutral CASM) are consistent with financial measures reported by other airlines and are comparable to financial measures required in our submissions to the United States Department of Transportation.
AirTran Holdings, Inc.
Reconciliation of GAAP Financial Information to
Non-GAAP Financial Information
(In thousands)
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
2006 2005 2006 2005
-------- ------ -------- ------
The following table reconciles
net income to EBITDA:
Reported net income (loss) $(3,325) $369 $15,514 $8,076
Exclude income tax expense
(benefit) (836) 1,716 10,415 4,948
Exclude interest
expense, net 6,628 2,721 16,204 10,466
Exclude depreciation 10,436 6,214 30,078 20,224
-------- -------- -------- --------
EBITDA $12,903 $11,020 $72,211 $43,714
======== ======== ======== ========
The following table shows the
calculation of operating cost
per ASM and non-fuel
operating cost per ASM:
Reported total operating
expenses $459,414 $405,064 $1,851,222 $1,427,054
ASMs (000s) 4,981,377 4,144,820 19,007,416 15,369,505
Operating cost
per ASM (cents) 9.22 9.77 9.74 9.28
========= ========= ========== ===========
Reported total
operating expenses $459,414 $405,064 $1,851,222 $1,427,054
Less: aircraft fuel (163,470) (148,510) (675,336) (462,672)
--------- --------- ---------- -----------
Non-fuel operating cost $295,944 $256,554 $1,175,886 $964,382
========= ========= ========== ===========
ASMs (000s) 4,981,377 4,144,820 19,007,416 15,369,505
Non-fuel operating
cost per ASM (cents) 5.94 6.19 6.19 6.27
========= ========= ========== ===========
The following table shows the calculation of fuel price neutral cost per ASM:
Reported total operating
expenses $459,414 $405,064 $1,851,222 $1,427,054
Gallons of fuel burned 80,932,598 310,925,717
Prior year average
cost of fuel 2.19 1.81
Aircraft fuel based
on prior year price 177,242 562,776
Aircraft fuel for
current period (163,470) (675,336)
---------- -----------
Adjusted operating cost $473,186 $1,738,662
========== ========= =========== =========
ASMs (000s) 4,981,377 4,144,820 19,007,416 15,369,505
Fuel-neutral cost
per ASM (cents) 9.50 9.77 9.15 9.28
========== ========= =========== =========
AirTran Holdings, Inc.
Reconciliation of GAAP Financial Information to
Non-GAAP Financial Information (Continued)
(In thousands)
(Unaudited)
Twelve months ended December 31,
2006 2005 2004 2003 2002 2001 2000 1999
---- ---- ---- ---- ---- ---- ---- ----
Net Income (Loss)-Adjusted
Reported net
income
(loss) $15,514 $8,076 $10,103 $100,517 $10,745 $(2,757) $47,436 $(99,394)
Miscellaneous
credits,
net of
tax -- -- (815) -- -- -- -- --
Payment
under the
Emergency
Wartime
Supplemental
Appropriations
Act, 2003,
net of
tax -- -- -- (36,965) -- -- -- --
Deferred
debt
discount/
issuance
cost
amorti-
zation -- -- -- 11,904 -- -- -- --
Reversal
of tax
valuation
allowance -- -- -- (15,860) -- -- -- --
Payment
under the
Stabilization
Act, 2002,
net of
tax -- -- -- -- (640) -- -- --
Impairment
loss DC-9
fleet,
2001 -- -- -- -- -- 10,783 -- --
Impairment
loss and
lease
termination
B737 fleet,
2001 -- -- -- -- -- 35,287 -- --
Special
charges
due to
federal
ground
stop order,
net of
tax -- -- -- -- -- 2,444 -- --
Payment
under the
Stabilization
Act, 2001,
net of
tax -- -- -- -- -- (28,372) -- --
Debt
discount
on
convertible
debt -- -- -- -- -- 4,291 -- --
Impairment
loss DC-9
fleet, 1999,
net of
tax -- -- -- -- -- -- -- 139,816
Litigation
settlement
gain, net
of tax -- -- -- -- -- -- -- (18,549)
---- ---- ---- ---- ---- ---- ---- -------
Net income
excluding
special
items $15,514 $8,076 $9,288 $59,596 $10,105 $21,676 $47,436 $21,873
======= ====== ====== ======= ======= ======= ======= =======
AirTran Holdings, Inc.
Reconciliation of GAAP Financial Information to
Non-GAAP Financial Information (Continued)
(In thousands)
(Unaudited)
Twelve months ended December 31,
2006 2005 2004
---- ---- ----
The following table shows the calculation of operating cost per ASM and non-fuel operating cost per ASM:
Reported total operating expenses $1,851,222 $1,427,054 $1,011,921
ASMs (000s) 19,007,416 15,369,505 11,977,443
Operating cost per ASM (cents) 9.74 9.28 8.45
===== ===== =====
Reported total operating expenses $1,851,222 $1,427,054 $1,011,921
Less: aircraft fuel (675,336) (462,672) (251,323)
--------- --------- ---------
Non-fuel operating cost $1,175,886 $964,382 $760,598
========= ========= =========
ASMs (000s) 19,007,416 15,369,505 11,977,443
Non-fuel operating cost per
ASM (cents) 6.19 6.27 6.35
========= ========= =========
Twelve months ended December 31,
2003 2002 2001
---- ---- ----
The following table shows the calculation of operating cost per ASM and non-fuel operating cost per ASM:
Reported total operating expenses $831,722 $702,807 $658,406
ASMs (000s) 10,046,385 8,255,809 6,537,756
Operating cost per ASM (cents) 8.28 8.51 10.07
===== ===== =====
Reported total operating expenses $831,722 $702,807 $658,406
Less: aircraft fuel (178,737) (154,467) (139,355)
--------- --------- ---------
Non-fuel operating cost $652,985 $548,340 $519,051
========= ========= =========
ASMs (000s) 10,046,385 8,255,809 6,537,756
Non-fuel operating cost per
ASM (cents) 6.50 6.64 7.94
========= ========= =========
SOURCE AirTran Holdings, Inc.
