September 27, 2006
AirTran Holdings, the parent company of discount carrier AirTran Airways, on Wednesday said it was pushing back delivery of eight Boeing 737 aircraft.
The move comes three weeks after the company cut its third-quarter revenue forecast due to softening travel demand. The carrier said at the time it would announce changes to its capacity growth plans.
In a filing with the US Securities and Exchange Commission, AirTran said it is rescheduling the delivery of five aircraft from the second half of 2007 and three aircraft from the first quarter of 2008 for delivery from 2009 until 2011.
The planes being delayed are Boeing 737-700s, the single-aisle, short- to medium-range airliners that are the workhorses of most US domestic airlines. The planes sell for about USD$60 million each at list price.
"We believe these changes are part of the fine tuning that will allow us to continue our track record of low costs and profitability," Chief Financial Officer Stan Gadek said in the filing.
In an interview, Gadek declined to comment on the value of the planes or provide any further financial details of the delay, except to say it will reduce the company's financing needs in 2007 and 2008.
After the delays, AirTran expects to take delivery of 14 planes in 2007 and 15 planes in 2008. This represents expected capacity growth of 19 percent to 20 percent in 2007, and 9 percent to 11 percent in 2008, the company said.
The company this year expects to take delivery of 20 planes, or 23 percent growth in available seat miles.
(Reuters)