AirTran profit up in second quarter on higher traffic

<p>AirTran Holdings Inc., which is trying to buy smaller discount airline rival Midwest Air Group, said Thursday its second-quarter earnings jumped 30 percent year-over-year as traffic grew on increased capacity.</p><p>Net income rose to $41.5 million, or 41 cents per share, from $32 million, or 32 cents per share, a year ago. Excluding a gain of 4 cents per share on the sale of two 737-700 aircraft, AirTran would have earned 37 cents per share in the latest quarter.</p><p>Revenue climbed 16 percent to $614.1 million from $528.2 million.</p><p>Analysts surveyed by Thomson Financial were expecting profit of 36 cents per share on revenue of $613.3 million.</p><p>Its shares fell a nickel to $10.14 in early trading.</p><p>During the second quarter AirTran Airways served 6.3 million passengers and achieved a load factor of 78.8 percent, up 0.7 of a percentage point. Capacity, as measured in available seat miles, increased 21.3 percent over the same period last year and reflects the addition of 18 new Boeing 737-700s.</p><p>AirTran saw non-fuel unit costs drop for the fourth straight quarter on a year-to-year basis, this time by 6 percent. The airline is scraping to save money elsewhere as fuel prices keep rising, said Stan Gadek, senior vice president of finance and chief financial officer.</p><p>Still, Airtran is expanding, adding more than a dozen new routes in the quarter to cities including St. Louis, San Diego and Charleston, S.C.</p><p>AirTran has been trying for nearly two years to acquire Midwest Air Group Inc., giving escalating offers of cash and stock in a hostile bid directly to shareholders. Last month, Midwest shareholders ousted three incumbent board members and replaced them with a slate nominated by AirTran.</p><p>The latest deal _ valued at about $15 a share _ expires Aug. 10. More than half of Midwest shareholders have agreed to tender their shares at that price.</p><p>For this quarter, Airtran's traffic, or revenue passenger miles, increased 22.3 percent.</p><p>"Looking forward, passenger demand appears strong," said Bob Fornaro, AirTran's president and chief operating officer. "With the delivery on July 16th of our last Boeing 737-700 for 2007, we expect to see improving trends in unit revenue and costs during the second half."</p><p>___</p><p>On the Net:</p><p>HASH(0x2e13684)</p>

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