Air Tran Loses $4.3 Million in 3rd Quarter

AirTran Airways Inc. said Thursday its third quarter ended in a $4.3 million loss after high fuel prices hammered the industry over the summer and a terrorism scare further dampened traditionally soft post-Labor Day travel.

The Orlando-based carrier's struggles echoed those of US Airways, which reported a $78 million loss Thursday, and JetBlue Airways, which reported a $500,000 loss this week.

AirTran's loss in the third quarter, which ended Sept. 30, compares with a $1 million profit, or 1 cent a share, during the same period last year.

The foiled alleged terrorist plot in London to blow up airliners in August kept some would-be travelers home because of concerns over safety and the hassle brought on by a temporary ban on all carry-on liquids.

"It was taking people awhile to fly again on the leisure side," said Stan Gadek, AirTran's chief financial officer. "Now it's just more psychological and we're seeing that improving."

AirTran's loss was 5 cents a share despite a 30 percent increase in revenue to $487.3 million. The low-cost carrier spent $190.7 million on fuel, 52 percent more than during the same period last year.

Executives at the airline said they expected to continue a heated competition with Delta Air Lines in Atlanta -- where both operate major hubs -- and all along the East Coast.

"The fact is our nonfuel costs have gone down 15 percent," Gadek said. "When [Delta] comes out of bankruptcy, that will be the lowest their costs have been and they'll go up from there."

AirTran expects to increase the capacity at its Atlanta ticket counter by as much as 70 percent by Thanksgiving as well as smooth out its baggage-handling process.

Security guidelines that now allow passengers to carry just 3 ounces of liquids onto airplanes has increased the number of checked bags per passenger by 12 percent. That's down from a nearly 30 percent increase that the airline reported during the total ban on liquids.

AirTran has gained market share in Orlando, where Southwest Airlines reigns. AirTran has edged past US Airways in Orlando, the state's busiest airport, to carry the most passengers behind Southwest, Delta and American Airlines.

"Orlando is a very strong part of our network, but it's seasonal," Gadek said. "This airline still is somewhat seasonal. We're still predominantly a North-South carrier to Florida and Southeast."

But Gadek said it's competing with Delta and low-cost rival Southwest by expanding its network west with a presence in Seattle, Los Angeles and San Francisco with an expectation to add cities next year.

At the end of trading Thursday, AirTran's shares fell 5 cents to $10.90.

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