Airtran — Shareholder Meeting (May 2010)
33 slides from Airtran's shareholder meeting presentation, May 18, 2010
Slide 1: 2010 Annual Shareholder Meeting
May 2010 2010 Annual Shareholder Meeting May 2010 2010 Annual Shareholder Meeting
Slide 2: Safe Harbor
2 Safe Harbor Certain of the statements contained herein should be considered “forward-looking statements,” including within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may”, “will”, “expect,” “intend,” “in
Slide 3: AirTran Airways 2009 Highlights
3 AirTran Airways 2009 Highlights n Record net income ― GAAP $134.7MM, economic $93.6MM n Lowest stage length adjusted unit costs among major airlines ― Non-fuel CASM 6.39 cents n Continued to diversify the network ― Initiated service to seven domestic cities and four Caribbean destinations ― Added
Slide 4: 2009: Launch of Four Sport-Themed Aircraft
2009: Launch of Four Sport-Themed Aircraft
Slide 5: AirTran Airways Today
5 AirTran Airways Today n 17 year-old Company ― 8 th largest U.S. airline ― 138 all-Boeing aircraft - 86 717s / 52 737-700s n 71 cities served n Over 8,100 Crew Members n 2009 sales of $2.3 billion ― Grown from under $450 million in sales in 1998 n Restored record of profitability ― Profitable 9 out
Slide 6: On Every AirTran Flight…
6 On Every AirTran Flight… n Business Class n High speed internet n XM Radio n Friendly Crew Members n Young all-Boeing fleet
Slide 7: AirTran Investment Highlights
7 AirTran Investment Highlights n Industry leading low costs and high quality n Conservative fleet plan and disciplined growth n Strong ancillary revenues ― Less dependent on initial sale to passenger ― 11% of total revenue in 2009 n Better diversified network ― More than 700 daily departures to ove
Slide 8: AirTran Remains Industry Cost Leader
8 AirTran Remains Industry Cost Leader (Cents) Note: Excludes fuel and special items Industry Cost Comparison Non-Fuel Unit Costs at 738 Miles for 2009 49% Higher 5% Higher
Slide 9: AirTran Ranks High in Industry Quality
AirTran AirTran AirTran AirTran 9 2008 2007 2006 2009 2010 AirTran AirTran Ranks High in Industry Quality JetBlue Independence Southwest United America West Northwest Continental Alaska American JetBlue Northwest Alaska Southwest Frontier Continental American US Airways United JetBlue Southwest Nort
Slide 10: Current Fleet Plan Allows for Disciplined Growth
10 Current Fleet Plan Allows for Disciplined Growth 28% 24% 20% 5% (2)% 3-4% 3-4% 5-7% (Aircraft) n Currently 138 aircraft: 86 717s / 52 737-700s ASM Growth
Slide 11: AirTran Has Successfully Diversified Its Network
11 AirTran Has Successfully Diversified Its Network % ASMs 2000 2002 2004 2006 2008 2010E Atlanta 91% 76% 67% 64% 58% 47% Florida 29% 35% 34% 38% 45% 41% Baltimore 0% 13% 13% 9% 11% 13% Milwaukee 0% 3% 3% 2% 7% 13% Caribbean 0% 1% 1% 0% 3% 6% Daily Flights 278 362 492 650 713 713 Note: Totals >100%
Slide 12: Composition of AirTran's Year-Over-Year Growth
12 Composition of AirTran’s Year-Over-Year Growth (ASM Growth) AirTran 2010 Available Seat Mile Growth 3 - 4% ~1.0 % ~1.5% ~1.25% ~0.75% ~0.5% (~1.5%)
Slide 13: AirTran Had a Regional Route Network in 2000
13 AirTran Had a Regional Route Network in 2000 Boston Flint Moline Buffalo Dayton Dallas/Ft. Worth Houston New Orleans Memphis Bloomington Minneapolis Akron/ Canton Newport News New York (LGA) Ft. Lauderdale Gulfport/Biloxi Fort Walton Beach Miami Ft. Myers Orlando Jacksonville Savannah Myrtle Beac
Slide 14: AirTran's 2010 Network is Better Diversified
14 AirTran’s 2010 Network is Better Diversified Portland Dallas/Ft. Worth Las Vegas Minneapolis San Antonio Flint San Juan Montego Bay Aruba Rochester San Diego Los Angeles Seattle San Francisco Wichita New Orleans Cancun Knoxville Lexington Buffalo Boston Allentown Akron/ Canton Jacksonville Orland
Slide 15: AirTran's 2010 Atlanta Network Has Grown
15 AirTran’s 2010 Atlanta Network Has Grown to 60 Cities Boston Dallas/Ft. Worth Las Vegas Denver Minneapolis San Antonio Houston San Juan Cancun Montego Bay Aruba Newport News Rochester Kansas City Columbus Akron/ Canton San Diego Los Angeles Phoenix Seattle San Francisco Milwaukee Moline Chicago G
Slide 16: AirTran Now Serves the Most Destinations from Orlando
16 AirTran Now Serves the Most Destinations from Orlando Portland Dallas/Ft. Worth Las Vegas Minneapolis San Antonio Houston San Juan Montego Bay Aruba Rochester San Diego Los Angeles Seattle San Francisco Wichita New Orleans Cancun White Plains New York (LGA) Philadelphia Atlantic City Washington,
Slide 17: Baltimore Provides a Strong Northeast Footprint
17 Baltimore Provides a Strong Northeast Footprint Portland Dallas/Ft. Worth Las Vegas Minneapolis San Antonio San Juan Montego Bay Aruba Rochester San Diego Los Angeles Seattle San Francisco Branson Wichita New Orleans Cancun White Plains New York (LGA) Philadelphia Atlantic City Newport News Dayto
Slide 18: AirTran is Now Milwaukee's Largest Mainline Carrier
18 AirTran is Now Milwaukee’s Largest Mainline Carrier Portland Dallas/Ft. Worth Las Vegas Minneapolis San Antonio Houston San Juan Montego Bay Aruba Rochester San Diego Los Angeles Seattle San Francisco Branson Wichita New Orleans Cancun White Plains New York (LGA) Philadelphia Atlantic City Washin
Slide 19: Future Growth Opportunities
19 Future Growth Opportunities n Milwaukee / Upper Midwest n Florida n Latin America n Baltimore n Atlanta
Slide 20: The Case for AirTran Growing Milwaukee
The Case for AirTran Growing Milwaukee
Slide 21: AirTran's Milwaukee Network Has Matured
21 AirTran’s Milwaukee Network Has Matured (ASMs in Millions) AirTran Milwaukee Daily ASMs (Passenger Market Share Shown Above) n AirTran now serves 18 of the top 20 markets n Latest passenger market share report exceeds 30% 8% 9% 12% 16% 16% 19% 21% 26% 26% 30% >30% >30% >30% Source: www.apgdat.com
Slide 22: Milwaukee is Larger than Most Mid-Sized Hub Cities
22 Milwaukee is Larger than Most Mid-Sized Hub Cities Mid-Sized Hub Cities Population within 60 Miles (Millions) Fortune 500 Companies Headquarters Detroit 6.4 18 Atlanta 4.6 10 Cleveland 3.9 11 Pittsburgh 3.7 7 Seattle 3.6 8 Milwaukee 3.4 7 Minneapolis 3.3 18 Phoenix 3.2 5 Cincinnati 3.1 8 Denver 2
Slide 23: Milwaukee Plays Big Role in Downsized Chicago Region
23 Milwaukee Plays Big Role in Downsized Chicago Region (Daily Seats 000s) Chicago / Milwaukee Region Capacity Milwaukee population: 3.4 million
Slide 24: Industry Issues and Outlook
Industry Issues and Outlook
Slide 25: Reasons Behind Legacy Consolidation
25 Reasons Behind Legacy Consolidation (Billions) (Billions) Legacy Airline Domestic Net Income Source: DOT Form 41 Filings and company reported financials Annual Cumulative
Slide 26: Domestic Capacity Remains at Very Low Levels
26 26 82% 79% 76% 72% 69% 64% 61% 59% 57% 56% 55% 6% 7% 8% 10% 12% 14% 14% 14% 14% 15% 16% 12% 14% 16% 18% 19% 22% 25% 27% 29% 29% 29% Domestic Capacity Remains at Very Low Levels Source: www.apgdat.com (Billions) Continental U.S. Available Seat Miles Legacy Regional LCC (2%)
Slide 27: Revenue Trends are Accelerating
27 Revenue Trends are Accelerating AirTran and ATA Industry Unit Revenue (Cents) (Cents) Q1 AirTran (PRASM/TRASM) ATA (PRASM) Q2 Note: Unit revenue adjusted to Q1 2010 passenger length of haul for both AirTran and ATA 1% ~8% AirTran (PRASM/TRASM) ATA (PRASM)
Slide 28: Fuel Prices Remain a Challenge for All Airlines
28 Fuel Prices Remain a Challenge for All Airlines *West Texas Intermediate Crude Oil Sources: Air Transport Association, Energy Information Administration, PIRA Energy Group, Deutsche Bank (Cost per Barrel) Crude Oil Delivery of 1 st B717 Order 100 B737s $32 $33 $38 $55 $70 $77 $145 $98 $81 $87 $17
Slide 29: Speculation is Accelerating Fuel Volatility
29 Speculation is Accelerating Fuel Volatility Source: Bloomberg, EIA www.stopoilspeculationnow.com
Slide 30: AirTran is Committed to Reducing Fuel Cost Volatility
30 30 Crude Price Period Hedge % $50 $70 $90 Q210 51% $67 $77 $84 Q310 70% $72 $78 $89 Q410 57% $65 $76 $88 2010 56% $72 $78 $84 2011 29% $68 $72 $90 AirTran is Committed to Reducing Fuel Cost Volatility n One of few airlines to actively hedge for 2010 n Comprised of calls and wide collars n Portfol
Slide 31: Q2 2010 Outlook is Positive
31 Q2 2010 Outlook is Positive n Capacity up approximately 4% n Estimated total unit revenue (TRASM) to be up 13% to 14% ― Revenue trends continue to accelerate in Q2 n Average economic cost per gallon of fuel all-in is $2.37 to $2.42 ― Approximately 60% hedged for second half 2010 n Non-fuel unit c
Slide 32: AirTran Investment Summary
32 AirTran Investment Summary n Track record of profitability was restored in 2009 ― Industry leading low costs and a high quality product drove record profitability across multiple market segments n Company has been successfully repositioned ― Disciplined fleet plan with multiple growth opportuniti
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