News Release
AirTran Holdings Reports Fourth Quarter and Full Year 2004 Profit
- Annual Operating Revenues Exceed $1 Billion -
ORLANDO, Fla., Jan. 25 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc.,
(NYSE: AAI), the parent company of AirTran Airways, Inc., today reported net
income for the quarter ended December 31, 2004, of $1.1 million, or $0.01 per
diluted share, versus net income of $21.7 million, or $0.24 per diluted share
in the year-earlier quarter. Net income for the full year 2004 was $12.3
million or $0.14 per diluted share.
AirTran Airways' non-fuel operating cost per available seat mile (CASM)
fell 6.8 percent to 6.00 cents for the fourth quarter of 2004 compared to 6.44
cents for the year-earlier quarter. Year over year non-fuel CASM decreased
2.3 percent to 6.35 cents.
"We are pleased to report net income for the fourth quarter and full year
2004," said Joe Leonard, AirTran Airways chairman and chief executive officer.
"Our non-fuel unit costs of $0.06 represent an all-time record low for our
airline. I am proud of the effort put forth by every member of the AirTran
Airways team to deliver another quarter of profitability," Leonard said.
During the fourth quarter, AirTran Airways boarded a record 3.5 million
passengers and generated a 22.6 percent increase in revenue passenger miles on
a 23.4 percent increase in capacity or available seat miles. Load factor
declined slightly, 0.5 points to 69.3 percent.
"Our Company was beset by four hurricanes heading into the quarter which
hurt our bookings in October," commented Robert L. Fornaro, AirTran Airways
president and chief operating officer. "However, November and December were
strong enough to offset the earlier weakness allowing us to end the quarter
with healthy load factors. I'm grateful for the hard work and effort of each
and every AirTran Airways Crew Member."
Commenting on the fourth quarter, Stan Gadek, AirTran Airways senior vice
president and chief financial officer, said, "Fourth quarter 2004 and 2003 net
income contain net credit and tax adjustments of $0.8 million and $5.7
million, respectively. Excluding these adjustments net income for the two
periods would be $0.3 million and $16.0 million." He added, "We are beginning
to see the long-term beneficial effects on costs and productivity from our new
Boeing 737-700s and expect the favorable trend to continue."
Recapping the year of 2004, AirTran Airways:
* Added the Boeing 737-700 series aircraft to its fleet
* Took delivery of six Boeing 717 aircraft and eight Boeing 737 aircraft
* Enhanced service to Fort Lauderdale/Hollywood, Dallas/Fort Worth, Los
Angeles, Boston, Akron-Canton, Pittsburgh, Newport News/Williamsburg,
Tampa, LaGuardia, Las Vegas and Baltimore/Washington
* Opened a new aircraft hangar at Hartsfield-Jackson Atlanta
International Airport
* Opened a new Metro Atlanta call center in Carrollton, Ga.
* Named Best Low-Fare airline by Entrepreneur Magazine for 2004
* Opened a new pilot training center in Atlanta
* Became the first airline to install XM Satellite Radio on a commercial
aircraft
* Signed professional football player Michael Vick as an endorser for the
airline
* Secured financing for all 2005 aircraft deliveries
* Ended the year with $342.3 million of cash and investments
Highlights for the quarter include:
* Initiated new service to Sarasota/Bradenton International Airport
* Enhanced service to Newport News/Williamsburg, Tampa and Chicago Midway
* Took delivery of two Boeing 717 aircraft and three Boeing 737 aircraft
bringing our fleet to 87 aircraft
* Reached milestone of hiring of our 1,000th pilot
* Ratified contract with the Transport Workers Union and the
International Brotherhood of Teamsters -- covering dispatchers,
mechanics and related personnel
* Named G. Peter D'Aloia, Senior Vice President and Chief Financial
Officer of American Standard Companies Inc., to the Board of Directors
AirTran Holdings, Inc., will conduct a conference call to discuss
quarterly results today at 10:00 a.m. Eastern. A live broadcast of the
conference call will be available via the internet at http://www.airtran.com.
AirTran Airways, one of America's largest low-fare airlines with 6,000
friendly, professional Crew Members, operates over 500 daily flights to more
than 40 destinations. The airline's hub is at Hartsfield-Jackson Atlanta
International Airport, where it is the second largest carrier. AirTran Airways
recently added the fuel-efficient Boeing 737-700 aircraft to create America's
youngest all-Boeing fleet. The airline is also the first carrier to install XM
Satellite Radio on a commercial aircraft. 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 for the year ended
December 31, 2003. The Company disclaims any obligation or duty to update or
correct any of its forward-looking statements.
AirTran Holdings, Inc.
Consolidated Statements of Income
(In thousands, except per share data and statistical summary)
(Unaudited)
Three Months Ended
December 31, Percent
2004 2003 Change
Operating Revenues:
Passenger $269,708 $231,360 16.6
Cargo 73 -- --
Other 9,591 7,466 28.5
Total operating revenues 279,372 238,826 17.0
Operating Expenses:
Salaries, wages and benefits 74,323 60,221 23.4
Aircraft fuel 76,964 45,195 70.3
Aircraft rent 40,364 35,235 14.6
Distribution 13,619 10,935 24.5
Maintenance, materials and
repairs 15,240 18,565 (17.9)
Landing fees and other rents 16,065 14,408 11.5
Aircraft insurance and
security services 6,241 5,321 17.3
Marketing and advertising 6,148 5,222 17.7
Depreciation 4,779 2,683 78.1
Other operating 22,087 20,197 9.4
Total operating expenses 275,830 217,982 26.5
Operating Income 3,542 20,844 (83.0)
Other (Income) Expense:
Interest income (1,961) (1,302) 50.6
Interest expense 5,058 5,225 (3.2)
Other (1,332) 10,445 --
Other (income) expense, net 1,765 14,368 (87.7)
Income Before Income Taxes 1,777 6,476 (72.6)
Income Tax Expense (Benefit) 652 (15,201) --
Net Income $1,125 $21,677 (94.8)
Earnings per Common Share
Basic $0.01 $0.26 (96.2)
Diluted $0.01 $0.24 (95.8)
Weighted-average Shares
Outstanding
Basic 86,218 83,806 2.9
Diluted 89,943 101,007 (11.0)
EBITDA $8,321 $23,527 (64.6)
Operating margin 1.3 percent 8.7 percent (7.4) pts.
Net margin 0.4 percent 9.1 percent (8.7) pts.
Net margin-adjusted* 0.1 percent 6.7 percent (6.6) pts.
Fourth Quarter Statistical
Summary:
Revenue passengers 3,452,534 3,008,111 14.8
Revenue passenger miles
(000s) 2,298,324 1,873,930 22.6
Available seat miles
(000s) 3,314,547 2,684,948 23.4
Block hours 83,586 72,461 15.4
Passenger load factor 69.3 percent 69.8 percent (0.5) pts.
Break-even load factor 68.9 percent 67.8 percent 1.1 pts.
Break-even load factor-
adjusted* 69.3 percent 64.7 percent 4.6 pts.
Average fare $78.12 $76.91 1.6
Average yield per RPM 11.73 cents 12.35 cents (5.0)
Passenger revenue per ASM 8.14 cents 8.62 cents (5.6)
Operating cost per ASM 8.32 cents 8.12 cents 2.5
Fuel neutral cost per ASM 7.64 cents 8.12 cents (5.9)
Non-fuel operating cost per
ASM 6.00 cents 6.44 cents (6.8)
Average cost of aircraft
fuel per gallon 138.27 cents 97.87 cents 41.3
Gallons of fuel burned 55,662,272 46,176,789 20.5
Weighted-average number
of aircraft 84 73 15.1
* Statistical calculations for 2003 exclude convertible debt discount
amortization and reversal of a tax valuation allowance of $10.4
million, included in other, and $15.9 million and the related tax
effect, respectively.
* Statistical calculations for 2004 exclude miscellaneous fees of
$0.8 million net of tax, included in other.
AirTran Holdings, Inc.
Consolidated Statements of Income
(In thousands, except per share data and statistical summary)
(Unaudited)
Twelve Months Ended
December 31, Percent
2004 2003 Change
Operating Revenues:
Passenger $1,005,263 $889,950 13.0
Cargo 73 715 (89.8)
Other 36,086 27,375 31.8
Total operating revenues 1,041,422 918,040 13.4
Operating Expenses:
Salaries, wages and
benefits 273,514 231,728 18.0
Aircraft fuel 247,980 178,737 38.7
Aircraft rent 150,959 124,203 21.5
Distribution 50,890 45,354 12.2
Maintenance, materials and
repairs 69,514 63,600 9.3
Landing fees and other rents 62,322 52,810 18.0
Aircraft insurance and
security services 22,888 19,684 16.3
Marketing and advertising 27,569 24,112 14.3
Depreciation 14,628 12,628 15.8
Other operating 88,314 78,866 12.0
Total operating expenses 1,008,578 831,722 21.3
Operating Income 32,844 86,318 (61.9)
Other (Income) Expense:
Interest income (5,275) (3,345) 57.7
Interest expense 19,428 28,303 (31.4)
Payment under the Emergency
Wartime
Supplemental
Appropriations Act, 2003 -- (38,061) --
Other (1,332) 12,257 --
Other (income) expense, net 12,821 (846) --
Income Before Income Taxes 20,023 87,164 (77.0)
Income Tax Expense (Benefit) 7,768 (13,353) --
Net Income $12,255 $100,517 (87.8)
Earnings per Common Share
Basic $0.14 $1.33 (89.5)
Diluted $0.14 $1.21 (88.4)
Weighted-average Shares
Outstanding
Basic 85,261 75,345 13.2
Diluted 89,523 86,607 3.4
EBITDA $47,472 $98,946 (52.0)
Operating margin 3.2 percent 9.4 percent (6.2) pts.
Net margin 1.2 percent 10.9 percent (9.7) pts.
Net margin-adjusted* 1.1 percent 6.5 percent (5.4) pts.
Twelve Month Statistical
Summary:
Revenue passengers 13,170,230 11,651,340 13.0
Revenue passenger miles
(000s) 8,479,262 7,143,125 18.7
Available seat miles
(000s) 11,977,443 10,046,385 19.2
Block hours 310,697 275,516 12.8
Passenger load factor 70.8 percent 71.1 percent (0.3) pts.
Break-even load factor 69.4 percent 64.1 percent 5.3 pts.
Break-even load factor-
adjusted* 69.5 percent 66.2 percent 3.3 pts.
Average fare $76.33 $76.38 (0.1)
Average yield per RPM 11.86 cents 12.46 cents (4.8)
Passenger revenue per ASM 8.39 cents 8.86 cents (5.3)
Operating cost per ASM 8.42 cents 8.28 cents 1.7
Fuel neutral cost per ASM 8.04 cents 8.28 cents (2.9)
Non-fuel operating cost per
ASM 6.35 cents 6.50 cents (2.3)
Average cost of aircraft
fuel per gallon 120.42 cents 98.39 cents 22.4
Gallons of fuel burned 205,927,000 181,663,163 13.4
Weighted-average number
of aircraft 78 70 11.4
* Statistical calculations for 2003 exclude payment under the Emergency
Wartime Supplemental Appropriations Act, 2003, convertible debt
discount amortization and reversal of a tax valuation allowance of
$38.1 million, $12.3 million, included in other, and $15.9 million and
the related tax effect, respectively.
* Statistical calculations for 2004 exclude miscellaneous fees of $0.8
million net of tax, included in other.
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 and break-even load factor excluding
special items is helpful to our investors in evaluating our operational
performance because we believe that the payment received under the Emergency
Wartime Appropriations Act, 2003 and the convertible debt discount
amortization 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 neutral cost per available seat mile (Fuel 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,
Net Margin-Adjusted 2004 2003 2004 2003
Reported net income $1,125 $21,677 $12,255 $100,517
Payment under the
Emergency Wartime
Supplemental
Appropriations Act,
2003, net of tax -- -- -- (36,965)
Deferred debt
discount/issuance cost
amortization, net of tax -- 10,144 -- 11,904
Reversal of tax valuation
allowance -- (15,860) -- (15,860)
Miscellaneous credits, net
of tax (843) -- (815) --
Net income excluding special
items $282 $15,961 $11,440 $59,596
Reported operating revenues $279,372 $238,826 $1,041,422 $918,040
Net margin excluding special
items 0.1% 6.7% 1.1% 6.5%
Three Months Ended Twelve Months Ended
December 31, December 31,
Break-even load factor-adjusted 2004 2003 2004 2003
Reported total operating
expenses $275,830 $217,982 $1,008,578 $831,722
Reported other (income)
expense, net 1,765 14,368 12,821 (846)
Reported cargo revenue (73) -- (73) (715)
Reported other revenue (9,591) (7,466) (36,086) (27,375)
Reported GAAP net expenses 267,931 224,884 985,240 802,786
Payment under the
Emergency Wartime
Supplemental
Appropriations Act,
2003 -- -- -- 38,061
Deferred debt
discount/issuance cost
amortization -- (10,445) -- (12,257)
Miscellaneous credits 1,332 -- 1,332 --
Net expenses excluding
special items $269,263 $214,439 $986,572 $828,590
Reported average yield per
RPM (cents) 11.73 12.35 11.86 12.46
Available seat miles
(000s) 3,314,547 2,684,948 11,977,443 10,046,385
Break-even load factor
excluding special items 69.3% 64.7% 69.5% 66.2%
The following table reconciles operating income to EBITDA:
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
Reported net income $1,125 $21,677 $12,255 $100,517
Exclude income tax expense
(benefit) 652 (15,201) 7,768 (13,353)
Exclude other (income)
expense, net 1,765 14,368 12,821 (846)
Exclude depreciation 4,779 2,683 14,628 12,628
EBITDA $8,321 $23,527 $47,472 $98,946
The following table shows the calculation of operating cost per ASM and
non-fuel operating cost per ASM:
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
Reported total
operating expenses $275,830 $217,982 $1,008,578 $831,722
ASMs (000s) 3,314,547 2,684,948 11,977,443 10,046,385
Operating cost per ASM
(cents) 8.32 8.12 8.42 8.28
Reported total
operating expenses $275,830 $217,982 $1,008,578 $831,722
Less: aircraft fuel (76,964) (45,195) (247,980) (178,737)
Non-fuel operating cost $198,866 $172,787 $760,598 $652,985
ASMs (000s) 3,314,547 2,684,948 11,977,443 10,046,385
Non-fuel operating cost
per ASM (cents) 6.00 6.44 6.35 6.50
The following table shows the calculation of fuel neutral cost per ASM:
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
Reported total
operating expenses $275,830 $217,982 $1,008,578 $831,722
Gallons of fuel burned 55,662,272 205,927,000
Prior year cost of fuel
(cents) 97.87 98.39
Aircraft fuel based on
prior year price 54,477 202,612
Aircraft fuel for current
period 76,964 247,980
Adjusted operating cost $253,343 $963,210
ASMs (000s) 3,314,547 2,684,948 11,977,443 10,046,385
Fuel neutral cost per ASM
(cents) 7.64 8.12 8.04 8.28
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
SOURCE AirTran Holdings, Inc.