AirTran, Delta optimistic about next year

By Kelly Yamanouchi

The Atlanta Journal-Constitution

Executives at Atlanta's two largest carriers, Delta Air Lines and AirTran Airways, are optimistic about next year, telling analysts they expect conditions in the airline industry to improve.

"I think everyone can agree the worst is behind us and things are improving," AirTran's chief financial officer, Arne Haak, said during a presentation at the Next Generation Equity Research airline conference in New York on Wednesday.

AirTran, which is based in Orlando and has its largest hub in Atlanta, shrank its flight capacity by 2 to 3 percent this year. But it plans to expand capacity by 3 to 4 percent next year and by 2 to 3 percent in 2011.

While that's very modest growth compared to AirTran's fast-growing past, when it expanded capacity by 20 percent or more per year in 2005, 2006 and 2007, it's a turnaround from the hunkering down of 2009.

Airline industry domestic flight capacity is now at its lowest level in more than a decade, according to Haak. AirTran, which has 138 aircraft, does not plan to grow its fleet until 2011, when it will add 7 aircraft.

Meanwhile, Haak's counterpart at Delta, Hank Halter, said during the conference that he expects expects trends in unit revenue -- a key indicator showing how much an airline makes from each passenger -- to turn positive next year, likely in the first half of the year.

But Halter also noted that corporate ticket revenues remain "challenged" amid the decline in business travel.