AirTran looks to capitalize on other airlines’ cutbacks


AirTran Airways Chief Executive Bob Fornaro said he thinks his airline will benefit from other airlines’ cutbacks in a weak economy as it focuses on expanding its network beyond Atlanta.

During a presentation at a Raymond James investor conference Thursday, Fornaro said there “is a lot of uncertainty out there, which I think is okay for us because that may create some opportunity as well.”

Orando-based AirTran’s Atlanta hub makes up about 62 percent of its capacity, but that could fall below 60 percent by the end of the year, Fornaro said. The airline is “centered on Atlanta but ultimately a lot more diverse than we were four or five years ago,” he said.

Fornaro said one of AirTran’s priorities this year is growth in Milwaukee, particularly as AirTran’s former acquisition target Midwest Airlines shrinks. He said AirTran will eventually have more than 30 departures out of Milwaukee.

Meanwhile, AirTran competitor Delta Air Lines is also shrinking its flight capacity by 6 to 8 percent this year and integrating its operations with merger partner Northwest Airlines.

Still, AirTran itself is cutting its capacity by 4 percent this year, and does not plan to grow for the next two years. Even when it resumes capacity increases in 2011, AirTran will expand at a more modest rate of about 5 to 7 percent rather than the double-digit growth it has had in the past.

Meanwhile, AirTran has been sharply focused on cutting costs, which could be critical during a recession. “We can operate quite nicely in an environment that’s got weak input prices such as oil and a weak revenue environment,” Fornaro said.