Originally Posted by
InkUnderNails
Had the business model of AirTran been able to profitably support the combination of a LCC and true Business Class, there would never had been opportunity for the merger in which WN effectively took over the operations of AirTran.
Let me take exception to this part of your comment. Airtran was not in financial trouble, they were modestly profitable at the time Southwest paid a premium for their stock. Their Business Model was doing OK. At the time Southwest bought Airtran the stock prices in the entire airline industry were depressed due to the general economy. Had Airtran continued as an independent company their stock price would likely increased substantially in the intervening period.
From an
Airtran 2011 Press release on 2010 financial results, the last year Airtran was independent and after Airtran had agreed to be acquired by Southwest..
AirTran has reported profits for eight of the past nine years.
During 2010, AirTran reported operating income of $128.2 million, net income of $38.5 million, and diluted earnings per common share of $0.26. AirTran's 2010 operating income decreased by $48.8 million compared to 2009 largely due to the unfavorable impact of a 24.6 percent increase in our average cost of jet fuel per gallon.
For the year, total operating revenue increased $277.7 million to $2.6 billion. The increase in total operating revenue was driven by a 3.3 percent increase in capacity and an 8.3 percent increase in total revenue per available seat mile to 10.88 cents. The increase in AirTran Airways' average cost of jet fuel per gallon resulted in a $171.6 million rise in our aircraft fuel expenses during 2010.
The Company ended the year with over $450 million in unrestricted cash and investments. During the year, AirTran also reduced its debt by more than $222 million, including the repurchase of over $90 million in convertible notes.
Operationally Airtran was far ahead of where Southwest is now.
The 2010 performance of AirTran Airways' operation led the industry and was the best in the airline's history. AirTran Airways was among industry leaders with 82.7 percent of flights arriving on-time, the airline completed 98.9 percent of its flights and continued its industry leading baggage handling performance with a new record low mishandled baggage rate of less than two bags per one thousand passengers.
Recognition of this customer service excellence culminated in the number one ranking in The Wall Street Journal's annual airline scorecard.
... the number one low-cost carrier in the prestigious Airline Quality Rating (
www.aqr.aero) and the sixth consecutive year the airline has been ranked in the top three among major U.S. airlines in this highly-regarded, objective ranking.