AirTran Puts off Delivery of 8 Boeing Jets

The move detailed Wednesday will reduce AirTran's planned capacity growth from 23 percent to about 19 percent in 2007.


AirTran Airways is postponing eight jet deliveries as it throttles back after years of aggressive growth in Delta Air Lines' backyard.

The Orlando-based airline, which has most its operations in Atlanta, said in a filing Wednesday that it will delay deliveries of five Boeing 737s in 2007 and three in 2008 to as late as 2011.

AirTran's chief financial officer, Stan Gadek, told The Atlanta Journal-Constitution about three weeks ago that the carrier, which was scheduled to take delivery of 19 jets next year, was "fine-tuning" its growth plans by slowing its fleet growth, but hadn't determined the amount.

The move detailed Wednesday will reduce AirTran's planned capacity growth from 23 percent to about 19 percent in 2007, and from 16 percent to as little as 9 percent in 2008.

"We are pleased to have smoothed out some delivery peaks while still maintaining a strong growth rate," Gadek said in the filing to the Securities and Exchange Commission. "We believe these changes are part of the fine-tuning that will allow us to continue our track record of low costs and profitability."

In the filing, AirTran said it will take delivery of 20 jets this year, 14 next year and 15 in 2008, after the schedule changes.

AirTran for years has been adding capacity at an annual clip of 20 percent to 25 percent after ordering up to 100 new jets in 2003. It has taken delivery of 32 of those jets and used them to build its schedule both at its Atlanta hub and in other cities, adding to the competitive pressure on older, bigger carriers.

But Gadek acknowledged in the earlier interview that AirTran had decided to slow its fleet growth plans in reaction to improved prospects at Delta, US Airways, United and other carriers.

Industry analysts at the time called AirTran's course correction good news for other airlines, and Wall Street punished AirTran's stock on that day, driving it down about 11 percent.

Reaction was milder Wednesday, as AirTran shares fell 28 cents to $9.90. The discount carrier's shares have so far had one of the industry's worst records this year, falling 37 percent while most larger carriers' shares have climbed.



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