8-K 1 f8k103101.htm 3RD QTR PRESS RELEASE UNITED STATES

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

 


PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported)      October 31, 2001      

 

AirTran Holdings, Inc.
(Exact name of registrant as specified in its charter)
State of Incorporation: Nevada

9955 AirTran Boulevard, Orlando, Florida  32827
(Address of principal executive offices)
(407) 251-5600
(Registrant's telephone number, including area code)

Commission file number: 1-15991     I.R.S. Employer Identification No: 58-2189551

 

AirTran Airways, Inc.
(Exact name of registrant as specified in its charter)
State of Incorporation: Delaware

9955 AirTran Boulevard, Orlando, Florida  32827
(Address of principal executive offices)
(407) 251-5600
(Registrant's telephone number, including area code)

Commission file number: 333-67300     I.R.S. Employer Identification No: 65-0440712


 

Item 5.  Other Events

AirTran Holdings, Inc. is filing as Exhibit 99 to this Form 8-K the press release issued by AirTran Holdings, Inc. and AirTran Airways, Inc. on October 31, 2001 announcing financial results for both companies for the third quarter of 2001.

 

Item 7. Financial Statements and Exhibits

     (c) Exhibits. The following exhibit is filed with this Report:

         99 - Press Release of AirTran Holdings, Inc. and AirTran Airways, Inc. (October 31, 2001)

 

Item 9. Regulation FD

On October 31, 2001, members of AirTran Holdings, Inc. (the "Company") management held a conference call with investors to discuss its release of financial results for the third quarter of 2001 as well as certain information regarding estimates for the remainder of 2001.

During this call management noted the following, among other things:

1. The Company had a cash balance of $135.8 million as of September 30, 2001.

2. The Company's shareholder's equity as of September 30, 2001 was $51.5 million.

3. Capacity (ASMs) is expected to grow by approximately 10% during the remainder of 2001.

4. Non-fuel unit costs are expected to decrease 1.5% compared to 3rd quarter 2001.

5. The Company believes its fuel costs will average between $0.85 and $0.90 per gallon during
    the fourth quarter of 2001.

6. Prior to September, July and August's ASMs increased by 18.4% and RPMs increased by
    12.0% on a year over year basis. As a result, load factor during this two-month period declined
    from 75.4% to 71.4% while enplaned passengers increased 12.8%.

7. Passenger revenue in July and August was $118.3MM compared to $108.5MM in 2000 or an
    increase of 9%. July and August unit revenue was 9.7 cents or 8.0% lower than the year earlier
    RASM of 10.6 cents.

8. For the July and August period load factor declined from 75.4% to 71.4% and yield declined
    from 14.0 cents to 13.6 cents or a 2.6% reduction.

Investors may listen to the webcast that occurred on October 31, 2001 in which this and other information was discussed by visiting the investor relations section of the Company's web site, www.airtran.com.


The information contained in this Form 8-K, including Exhibit 99, contains forward-looking statements. Statements regarding the Company's future growth in market segments, strategic plan, revenue, earnings, load factors, yields, Internet bookings as well as statements about the Company's future financial and operational performance, future profitability and the impact of any of such factors on 2001 and beyond are forward-looking statements and are not historical facts. Instead, they are estimates or projections involving numerous risks or uncertainties, including but not limited to, consumer demand and acceptance of services offered by the Company, the Company's ability to maintain current cost levels, fare levels and actions by competitors, regulatory matters and general economic conditions. Additional information concerning factors that could cause future results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including but not limited to the Company's annual report on Form 10-K for the year ended December 31, 2000. The Company disclaims any obligation or duty to update or correct any of its forward-looking statements.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

AirTran Holdings, Inc.

(Registrant)

   

Date: October 31, 2001

                      /s/ Richard P. Magurno                  

 

Senior Vice President
and General Counsel

   
 

AirTran Airways, Inc.

(Registrant)

   

Date: October 31, 2001

                      /s/ Richard P. Magurno                  

 

Senior Vice President
and General Counsel


 

 

EXHIBIT 99

AirTran Holdings Reports Third Quarter 2001 Operating Profit
Before Special Items and Non-Recurring, Non-Cash Charge

     ORLANDO, Fla.--Oct. 31, 2001--AirTran Holdings, Inc. (NYSE:AAI), parent company of AirTran Airways, Inc., today announced that it earned an operating profit of $2.0 million in the third quarter 2001 before special items and a non-recurring, non-cash charge related to the conversion of a convertible note by Boeing Capital Loan Corp. AirTran Holdings recorded a net loss of $10.6 million or $.15 per basic and diluted share after the special items and non-recurring charge. This compares to net earnings of $8.9 million or $.13 per diluted share in the third quarter of 2000.

     "Prior to the events of September 11th, AirTran was on track to post a net profit for the third quarter of 2001 -- achieving its eleventh consecutive quarter of profitability," said Joe Leonard, chairman and chief executive officer. "Although these events impacted our business, our employees quickly demonstrated their commitment to ensuring AirTran's future by being the first in the industry to voluntarily accept wage reductions. On behalf of the Company and its shareholders, I want to thank each and every employee for his or her personal leadership and sacrifice."

     Included in the net loss were special charges directly related to September 11th, a special gain and a non-recurring, non-cash charge as outlined in the table below:

Reconciliation of Special Items and Non-recurring,

Non-cash Charge to Net Loss

Third Quarter 2001

(in millions, except per share amounts)

 
     

        Amount

Earnings Per Share

 

Operating income

$

2.0

       
 

Other (income) expense

 

(7.4

)

     
 

Tax provision

 

   (0.7

)

     
               
 

Net loss before special items and

           
 

     non-recurring, non-cash charge

$

(6.1

)

$

(.09

)

               
 

Special items:

           
               
 

Aircraft impairment

 

(28.0

)

     
 

Other costs related to Sept. 11

 

   (2.5

)

     
 

          Total special charges

 

(30.5

)

     
 

Special credit: U.S. Government grant

 

   30.3

       
 

          Total special items

 

(0.2

)

     
 

Non-recurring, non-cash charge

 

   (4.3

)

     
 

               Total adjustments

 

   (4.5

)

$

(.06

)

               
 

Net loss after special items and

           
 

     non-recurring, non-cash charge

$

(10.6

)

$

(.15

)

               
 

Weighted average shares (000s)

 

68,690

       
               


 


     Robert L. Fornaro, president and chief operating officer, said, "Immediately following September 11th, AirTran reduced its daily flight schedule by approximately twenty percent. However, we continued to serve all of our cities and recently announced new service to Pensacola and Tallahassee, Florida, with revenue guarantees, as well as to Baltimore/Washington International Airport." Fornaro went on to say, "AirTran's passenger load factors continue to improve on a daily basis and our operating performance is among the best in the industry at this time."

     The aircraft impairment charge is a non-recurring, non-cash adjustment to the net book value of the Company's DC-9 fleet and reflects the reduction in market value of used aircraft as a result of the events of September 11th. The Company anticipates that it will retire three DC-9 aircraft in the fourth quarter of 2001. The previously mentioned conversion of a convertible note resulted in the issuance of approximately two million shares of the Company's common stock.

     Also during the third quarter, AirTran Holdings, Inc., joined the New York Stock Exchange on August 15, 2001. Commenting on this and other events Stan Gadek, senior vice president and chief financial officer, said, "During the third quarter we experienced both achievements and challenges in the financial area. Excluding special items, our non-fuel unit costs decreased 2.5 percent on a year-over-year basis primarily due to cost-saving measures implemented in the second and third quarters. In addition, AirTran had in excess of $135 million in total cash as of September 30th, compared to $103 million as of December 31, 2000. As a result, we are well positioned to weather the current environment."

     AirTran Airways provides affordable air travel to 34 cities throughout the eastern United States. The airline's hub is at the world's busiest airport, Hartsfield Atlanta International Airport, where it is the second largest carrier. AirTran Airways is a subsidiary of AirTran Holdings, Inc. (NYSE:AAI).

     Unlike other airlines, AirTran Airways never requires a roundtrip purchase or Saturday night stay. The airline offers a Business Class any business can afford, all-assigned seating, a generous frequent flier program, and a corporate program called A2B. For more information and reservations, visit www.airtran.com (America Online Keyword: AirTran), call your travel agent or AirTran Airways at 1-800-AIRTRAN (800-247-8726) or 770-994-8258 in Atlanta.

     Editor's note: Any statements regarding the Company's future growth in market segments, strategic plan, revenue, earnings, load factors, yields, Internet bookings as well as statements about the Company's future financial and operational performance, future profitability and the impact of any of such factors on 2001 and beyond are forward-looking statements and are not historical facts. Instead, they are estimates or projections involving numerous risks or uncertainties, including but not limited to, consumer demand and acceptance of services offered by the Company, the Company's ability to maintain current cost levels, fare levels and actions by competitors, regulatory matters and general economic conditions. Additional information concerning factors that could cause future results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including but not limited to the Company's annual report on Form 10-K for the year ended December 31, 2000. The Company disclaims any obligation or duty to update or correct any of its forward-looking statements.


AirTran Holdings, Inc.
Consolidated Statements of Operations
(In thousands, except per share data and statistical summary)
(Unaudited)

         

For the three months ended

       
         

September 30,

   

Variance

 
         

   2001   

   

   2000   

   

Percentage

       

Operating revenues:

                       
 

Passenger

$

146,850

 

$

156,807

   

(6.3

)

%

   
 

Cargo

 

410

   

904

   

(54.6

)

%

   
 

Other

 

       3,417

   

       3,748

   

(8.8

)

%

   
   

Total operating revenues

 

150,677

   

161,459

   

(6.7

)

%

   
                               

Operating expenses:

                       
 

Salaries, wages and benefits

 

38,378

   

35,423

   

8.3

 

%

   
 

Aircraft fuel

 

34,757

   

37,189

   

(6.5

)

%

   
 

Maintenance, materials and repairs

 

15,270

   

20,959

   

(27.1

)

%

   
 

Distribution

 

9,938

   

10,009

   

(0.7

)

%

   
 

Landing fees and other rents

 

8,979

   

6,661

   

34.8

 

%

   
 

Marketing and advertising

 

4,620

   

4,396

   

5.1

 

%

   
 

Aircraft rent

 

9,297

   

4,007

   

132.0

 

%

   
 

Depreciation

 

6,586

   

5,906

   

11.5

 

%

   
 

Other operating

 

20,853

   

19,806

   

5.3

 

%

   
 

Special charges

 

30,484

   

--

   

NM

       
 

Government grant

 

   (30,251

)

 

             --

   

NM

       
   

Total operating expenses

 

   148,911

   

   144,356

   

3.2

 

%

   

Operating income

 

1,766

   

17,103

   

(89.7

)

%

   
                               

Other (income) expense

                       
 

Interest income

 

(1,257

)

 

(1,654

)

 

(24.0

)

%

   
 

Interest expense

 

8,745

   

9,518

   

(8.1

)

%

   
 

Convertible debt discount amortization

 

4,291

   

--

   

NM

       
 

SFAS 133 adjustment

 

          (89

)

 

            --

   

NM

       

Other expense, net

 

     11,690

   

       7,864

   

48.7

 

%

   
                               

Income (loss) before taxes

 

(9,924

)

 

9,239

   

(207.4

)

%

   

Provision for income taxes

 

    670

   

         348

   

92.5

 

%

   

Net income (loss)

$

(10,594

)

$

8,891

   

(219.2

)

%

   
   

=======

   

=======

             

Earnings (loss) per common share

                       

     Basic

$

(0.15

)

$

0.14

   

(207.1

)

%

   

     Diluted

$

(0.15

)

$

0.13

   

(215.4

)

%

   
                         

Weighted average shares outstanding

                       

     Basic

 

68,690

   

65,757

   

4.5

 

%

   

     Diluted

 

68,690

   

69,047

   

(0.5

)

%

   


 

AirTran Holdings, Inc.
Consolidated Statements of Operations (Continued)
(In thousands, except per share data and statistical summary)
(Unaudited)

   

For the three months ended

 
   

September 30,

 

Variance

 

        2001        

 

        2000        

 

  Percentage  

Third Quarter Statistical Summary: (1)

    Revenue passengers

 

2,035,162

       

2,029,035

     

0.3

 

%

    Revenue passenger miles (000s)

 

1,107,901

       

1,110,576

     

(0.2

)

%

    Available seat miles (000s)

 

1,651,105

       

1,512,847

     

9.1

 

%

    EBITDAR

$

17,882

     

$

27,016

     

(33.8

)

%

    Operating margin

 

1.3

 

%

   

10.6

 

%

 

(9.3

)

pts.

    Net margin

 

(4.1

)

%

   

5.5

 

%

 

(9.6

)

pts.

    Block hours

 

47,919

       

44,469

     

7.8

 

%

    Passenger load factor

 

67.1

 

%

   

73.4

 

%

 

(6.3

)

pts.

    Break-even load factor

 

69.6

 

%

   

69.1

 

%

 

0.5

 

pts.

    Average fare

$

72.16

     

$

77.28

     

(6.6

)

%

    Average yield per RPM

 

13.25

 

(cent)

   

14.12

 

(cent)

 

(6.2

)

%

    Passenger revenue per ASM

 

8.89

 

(cent)

   

10.37

 

(cent)

 

(14.3

)

%

    Operating cost per ASM

 

9.00

 

(cent)

   

9.54

 

(cent)

 

(5.7

)

%

    Non-fuel operating cost per ASM

 

6.90

 

(cent)

   

7.08

 

(cent)

 

(2.5

)

%

    Average cost of aircraft fuel per gallon

 

91.74

 

(cent)

   

103.40

 

(cent)

 

(11.3

)

%

    Weighted average number of aircraft

 

60

       

51

     

17.6

 

%

                           

(1)

Where appropriate, excludes special charges, government grant and nonrecurring, non-cash charges for

 

convertible debt discount amortization of $30.5 million, $30.3 million, and $4.3 million, respectively.

                           


AirTran Holdings, Inc.
Consolidated Statements of Operations
(In thousands, except per share data and statistical summary)
(Unaudited)

         

For the nine months ended

       
         

September 30,

   

Variance

 
         

   2001   

   

   2000   

   

Percentage

       

Operating revenues:

                       
 

Passenger

$

517,232

 

$

441,556

   

17.1

 

%

   
 

Cargo

 

1,704

   

2,977

   

(42.8

)

%

   
 

Other

 

    11,247

   

    10,103

   

11.3

 

%

   
   

Total operating revenues

 

530,183

   

454,636

   

16.6

 

%

   
                               

Operating expenses:

                       
 

Salaries, wages and benefits

 

119,236

   

101,690

   

17.3

 

%

   
 

Aircraft fuel

 

109,351

   

96,361

   

13.5

 

%

   
 

Maintenance, materials and repairs

 

56,540

   

55,504

   

1.9

 

%

   
 

Distribution

 

36,231

   

29,400

   

23.2

 

%

   
 

Landing fees and other rents

 

27,156

   

20,400

   

33.1

 

%

   
 

Marketing and advertising

 

14,845

   

13,440

   

10.5

 

%

   
 

Aircraft rent

 

23,365

   

9,000

   

159.6

 

%

   
 

Depreciation

 

22,838

   

16,129

   

41.6

 

%

   
 

Other operating

 

60,126

   

52,148

   

15.3

 

%

   
 

Impairment loss/lease termination

 

18,079

   

--

   

NM

       
 

Special charges

 

30,484

   

--

   

NM

       
 

Government grant

 

   (30,251

)

 

            --

   

NM

       
   

Total operating expenses

 

  488,000

   

  394,072

   

23.8

 

%

   

Operating income

 

42,183

   

60,564

   

(30.3

)

%

   
                               

Other (income) expense

                       
 

Interest income

 

(4,456

)

 

(3,908

)

 

14.0

 

%

   
 

Interest expense

 

29,679

   

28,618

   

3.7

 

%

   
 

Convertible debt discount amortization

 

4,291

   

--

   

NM

       
 

SFAS 133 adjustment

 

     (2,701

)

 

            --

   

NM

       

Other expense, net

 

    26,813

   

    24,710

   

8.5

 

%

   
                               

Income before taxes and cumulative effect

                       

  of change in acctg. principle

 

15,370

   

35,854

   

(57.1

)

%

   

Provision for income taxes

 

      3,312

   

       1,473

   

124.8

 

%

   
                               

Income before cumulative effect of change

                       

  in acctg. principle

 

12,058

   

34,381

   

(64.9

)

%

   
                               

Cumulative effect of change in acctg.

                       

  principle, net of tax

 

        (657

)

 

            --

   

NM

       
                               

Net income

$

11,401

 

$

34,381

   

(66.8

)

%

   
   

=======

   

=======

             


 

 

AirTran Holdings, Inc.
Consolidated Statements of Operations (Continued)
(In thousands, except per share data and statistical summary)
(Unaudited)

         

For the nine months ended

       
         

September 30,

   

Variance

 
         

   2001   

   

   2000   

   

Percentage

       

Basic earnings per common share

                       

  Earnings before cumulative effect of

                       

    change in acctg. principle

$

0.18

 

$

0.52

   

(65.4

)

%

   

  Cumulative effect of change in acctg.

                       

    principle

 

        (0.01

)

 

              --

   

NM

       

  Earnings per common share, basic

$

0.17

 

$

0.50

   

(67.3

)

%

   
   

=======

   

=======

             
                               

Diluted earnings per common share

$

0.17

 

$

0.50

   

(66.0

)

%

   

  Earnings before cumulative effect of

                       

    change in acctg. principle

 

        (0.01

)

 

              --

   

NM

       

  Cumulative effect of change in acctg.

$

0.16

 

$

0.52

   

(68.0

)

%

   

    principle

 

=======

   

=======

             

  Earnings per common share, diluted

                       
                               

Weighted average shares outstanding

                       

     Basic

 

67,226

   

65,735

   

2.3

 

%

   

     Diluted

 

74,664

   

69,009

   

8.2

 

%

   
                         

 

         

For the nine months ended

 
         

September 30,

 

Variance

       

        2001        

 

        2000        

 

  Percentage  

Nine Month Statistical Summary: (2)

    Revenue passengers

 

6,449,334

       

5,583,128

     

15.5

 

%

    Revenue passenger miles (000s)

 

3,489,731

       

3,032,962

     

15.1

 

%

    Available seat miles (000s)

 

4,944,408

       

4,316,504

     

14.5

 

%

    EBITDAR

$

106,698

     

$

85,693

     

24.5

 

%

    Operating margin

 

11.4

 

%

   

13.3

 

%

 

(1.9

)

pts.

    Net margin

 

6.3

 

%

   

7.6

 

%

 

(1.3

)

pts.

    Block hours

 

145,256

       

126,397

     

14.9

 

%

    Passenger load factor

 

70.6

 

%

   

70.3

 

%

 

0.3

 

pts.

    Break-even load factor

 

65.4

 

%

   

64.6

 

%

 

0.8

 

pts.

    Average fare

$

80.20

     

$

79.09

     

1.4

 

%

    Average yield per RPM

 

14.82

 

(cent)

   

14.56

 

(cent)

 

1.8

 

%

    Passenger revenue per ASM

 

10.46

 

(cent)

   

10.23

 

(cent)

 

2.2

 

%

    Operating cost per ASM

 

9.50

 

(cent)

   

9.13

 

(cent)

 

4.1

 

%

    Non-fuel operating cost per ASM

 

7.29

 

(cent)

   

6.90

 

(cent)

 

5.7

 

%

    Average cost of aircraft fuel per gallon

 

96.35

 

(cent)

   

93.27

 

(cent)

 

3.3

 

%

    Weighted average number of aircraft

 

57

       

49

     

16.3

 

%

                           

(2)

Where appropriate, excludes impairment loss/lease termination, special charges, government grant and nonrecurring, non-cash charges for convertible debt discount amortization of $18.1 million, $30.5 million, $30.3 million, and $4.3 million, respectively