ORLANDO, Fla. -- AirTran Holdings Inc., parent of regional carrier AirTran Airways and a spurned bidder for rival Midwest Air, on Wednesday said it swung to a first-quarter profit as higher fares and improved traffic drove a surge in revenue.
AirTran said it earned $2.4 million, or 3 cents per share, in the January-March period versus a loss of $8.8 million, or 10 cents per share, in the year-ago period.
"We obviously feel a sense of satisfaction with the first quarter even though our profit is not large," said Joe Leonard, AirTran chairman and chief executive during a conference call Wednesday. "The first quarter for us is always a tough quarter."
Leonard cited AirTran's profits despite winter storms and continuing high fuel prices as contributing to the company's profitability.
"About $4.5 million in refunds were issued due to storms and cancellations," Leonard said. "That's a substantial loss, but we're pretty happy with the way we've gotten through it."
Two weeks ago, AirTran told Wall Street to expect a "slight profit." Analysts polled by Thomson Financial were looking for a penny per share.
Revenue jumped 21 percent to $504.5 million from $416 million. Analysts expected $504.3 million in revenue.
"This is a good indicator," said analyst Ray Neidl, of Calyon Securities Inc. "If AirTran can do well in the first quarter, they should be able to carry this through for the year."
AirTran has offered about $389 million in cash and stock for Midwest Air Group Inc., but the Midwest board has recommended that shareholders reject the bid as inadequate and has argued it can be more profitable alone.
That means there could be a showdown at Midwest's annual shareholders meeting in June. AirTran has courted Midwest shareholders for more than a year, boosting its bid from an initial offer of $78 million.
"We're confident that at the end of the day we will prevail," Leonard said. "It's taking two good airlines and making one great airline."
A combined airline would offer more than 200 airplanes serving more than 70 cities, Leonard said. AirTran's tender offer expires May 16.
In AirTran's earnings report, it said revenue passenger miles, which measure one paying passenger flown one mile, rose 19.2 percent to 3.65 billion in the quarter. Capacity increased 20.5 percent to 5.21 billion available seat miles.
Load factor, which measures the percentage of available seats filled, was 70.1 percent, down from 70.8 percent a year ago. Average fare rose 6 percent to $94.29.
AirTran announced plans to begin service in 2007 to St. Louis; San Diego, Calif.; Charleston, S.C. and Portland, Maine.
AirTran shares rose 9 cents to $11.69 Wednesday on the New York Stock Exchange. They have ranged from $9.06 to $15.77 over the past year. Midwest shares rose 77 cents, or 5.7 percent, to $14.29 on the American Stock Exchange.
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