US low fare airline AirTran says that it is "positioned for a turn-around", despite posting heavy losses for last year. The former ValuJet has reported a net loss for 1997 of $96.7 million, more than double its 1996 loss, on operating revenues that fell slightly, to $211.5 million.
One-time costs associated with the ValuJet/AirWays merger more than doubled the fourth quarter net loss, to $54.3 million, but operating revenues rose by 151%, to $70.4 million, giving AirTran reason to hope that it is finally on the road to recovery. The increase was more than the $13.2 million contributed by the former AirWays following completion of the merger last November, the airline notes.
AirTran says that it incurred over $20 million in one-time costs in the fourth quarter to repaint 33 aircraft, market its new identity and refurbish nine aircraft, now stored or leased out, that will re-enter the airline's fleet this year. President Joseph Corr says that an aggressive advertising campaign is paying off in future bookings.
"Our loads are picking up," AirTran says, the load factor having fallen to 52.9% at the end of last year, down from 57.1% at the end of 1996. At the same time, AirTran's costs increased. In particular, maintenance expenses rose by more than 25% over the previous year, to more than $76 million. The carrier ended the year with a cash balance of $92 million.
AirTran is to make progress payments totalling $30 million this year against its firm order for 50 Boeing 717s, deliveries of which will start in June 1999. The airline says that it is committed to taking delivery of the aircraft on firm order, and intends to exercise its option to acquire 50 more.
Source: Flight International
