AirTran 3Q earnings soar on higher fares

AP News
Posted: Oct 22, 2010 9:47 AM
AirTran 3Q earnings soar on higher fares

The parent company of AirTran Airways said Friday its third-quarter earnings more than tripled mostly due to higher fares.

The Orlando company, which is selling itself to Southwest Airlines, said net income rose to $36.3 million, or 22 cents per share, for the July to September period _ the heart of the busy summer travel season. That's up from $10.4 million, or 8 cents per share, a year ago.

AirTran Holdings Inc. said revenue rose 12 percent to $667.9 million.

Analysts polled by Thomson Reuters forecast a profit of 17 cents per share on $685.9 million in revenue.

While the number of paying passengers was virtually flat, AirTran's planes were fuller and its yield, or the average fare per mile, rose almost 12 percent.

During the summer, AirTran extended its flights to San Juan from Baltimore/Washington International Thurgood Marshall Airport. It announced new service from Tampa, Fla. to Key West and San Juan, Puerto Rico and plans to start serving Punta Cana, Dominican Republic, from Atlanta beginning in February.

AirTran's discount rival JetBlue is also expanding in the Caribbean, scooping up vacationers to spots where other airlines have cut service. JetBlue said Thursday added flights and higher fares quadrupled its third-quarter earnings. Income in that quarter alone topped what it made all of last year.

AirTran's future partner Southwest said Thursday it earned $205 million in the July-to-September period. Traffic was up about 5 percent, which along with higher average fares pushed revenue up 20 percent.

Southwest's $1.4 billion acquisition of AirTran is expected to close in the first half of next year, but the businesses aren't expected to be fully combined until 2012. Until then, the airlines will continue to compete.

Its shares were steady at $7.48 in morning trading.