AirTran Airways swung to a $10.4 million profit in the third quarter, reversing a year-earlier loss, and said expansion in other cities has made it less reliant on its Atlanta hub.
The profit, which amounted to 8 cents per diluted share, compares with a $94.5 million loss in the same quarter last year. AirTran also said it had year-to-date profit of $117.6 million, a record in terms of total amount.
The profit for the quarter, which ended Sept. 30, included $6.3 million in paper losses on future fuel hedges and a $6.4 million gain by retaining deposits from a terminated contract to sell aircraft. AirTran added two Boeing 737 jets to its fleet in September that it had previously planned to sell, but the buyer's financing fell through.
AirTran, which has shrunk its flight operations as travel demand declined, saw its third quarter operating revenue fall 11.3 percent to $597.4 million, down from $673 million a year ago.
AirTran's operations in Atlanta now make up about 50 percent of its total network, down from 52 percent earlier this year. The Atlanta share may fall to about 45 percent next year as AirTran adds flights in other cities, executives said.
AirTran has about 230 daily flights in Atlanta, down from about 270 at its peak, and its Atlanta flight capacity is about 6 percent lower than it was a year ago. Meanwhile, it has expanded in other cities such as Baltimore and Milwaukee.
"We're at a level in Atlanta now that is solidly profitable, and although it's a smaller percentage and it shrunk a little bit, we're done," said AirTran's senior vice president of marketing and planning, Kevin Healy.
Healy and AirTran chief executive Bob Fornaro said during an investor conference call that travel has declined due to weakness in the corporate meetings segment.
Although meetings bookings are recovering, the improvements for airlines will not show up until later, Healy said.
AirTran also said it has made progress in labor talks with pilots and flight attendants, and that mechanics and inspectors just ratified a new 48-month contract.
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