ATLANTA - AirTran Holdings Inc., the parent company of discount carrier AirTran Airways, said Tuesday it swung to a loss in the second quarter despite a 13 percent sales increase.
The Orlando, Fla.-based company also said it plans to defer deliveries of more aircraft and will cut more capacity.
The results, when one-time items are excluded, missed Wall Street expectations, but AirTran shares jumped more than 18 percent as other airline stocks rose as well with oil down almost $2 a barrel in morning trading on the New York Mercantile Exchange. The carrier also said it was successful in strengthening its cash balance and extending a key credit card processing agreement.
AirTran, which has its hub in Atlanta, said it lost $13.5 million, or 12 cents a share, in the quarter, compared to a profit of $42.1 million, or 42 cents a share, a year earlier.
Excluding one-time items, AirTran said its adjusted loss in the quarter was $31.12 million, or 29 cents a share. Analysts surveyed by Thomson Financial expected a loss of 25 cents a share. Analysts generally exclude one-time items from their estimates.
Revenue increased to $693.4 million from $613.5 million a year earlier. AirTran's fuel costs rose 82.6 percent in the quarter. Analysts forecast revenue to come in at $702.1 million for the latest April-June quarter.
For the first six months of the year, AirTran lost $48.35 million, or 48 cents a share, compared to profit of $44.22 million, or 45 cents a share, for the same period a year earlier. Six-month revenue rose to $1.29 billion, compared to $1.12 billion a year earlier.
AirTran said it recently reached an agreement with Boeing to defer four additional deliveries of 737-700 aircraft from 2009 to 2015.
In May, AirTran announced that it would defer the delivery of 18 Boeing 737-700 aircraft originally scheduled for delivery between 2009 through 2011, to 2013 through 2014.
AirTran now plans for capacity to fall 7 percent to 8 percent during the last four months of 2008. It currently targets a 4 percent to 8 percent capacity reduction in 2009.
AirTran said it has fuel hedge positions to cover roughly 70 percent of its fuel needs for the remainder of the year.
The airline recorded $51 million in net gains related to its fuel hedging program in the second quarter.
AirTran said fuel hedging for the rest of the year will reduce the price it pays for crude oil by roughly $12 to $15 per barrel at current fuel price levels.
AirTran ended June with an unrestricted cash and investment balance of $445.9 million. The company also negotiated an extension of its primary credit card processing agreement through Dec. 31, 2009. AirTran said it received a commitment for a line of credit of up to $150 million to satisfy potential holdback requirements with credit card processors.
AirTran shares rose 49 cents, or 18.2 percent, to $3.19 in morning trading Tuesday. The stock has traded in a 52-week range of $1.28 to $11.17.