AirTran Holdings Inc.AAI

Morningstar Rating

Stock Research and Analysis

by Michael Pierson

In the highly commodified airline business, low unit-operating costs are synonymous with profitability. AirTran's entire business model is built on the tenets of operating efficiently. After adjusting for length of haul and excluding fuel, AirTran operates Read more

Bulls Say

AirTran operates with the lowest cost structures in the industry, beating out Southwest.

Even as legacy carriers exit bankruptcy and merge, their unit costs will still remain higher than those of AirTran.

Business-class seating, a diversified route network, and the introduction of Sirius XM Satellite Radio SIRI give AirTran a customer service edge over other low-cost carriers. Read more

Bears Say

To expand its network beyond the Southeast, AirTran will eventually have to compete at airports with higher costs or where it must go head-to-head with other low-cost carriers.

AirTran may have lost a key growth opportunity when it was outmaneuvered by Southwest for gates at Chicago's Midway Airport. Read more

Strategy

Management recognizes that success as an airline is a function of cost, and lowering unit-operating costs is its first priority. At the same time, AirTran is expanding beyond the southeastern United Read more

Management

AirTran's top executives each average more than 15 years of airline industry experience, led by chairman and CEO Robert Fornaro's 20 years. Fornaro is an airline veteran with stints at US Airways LCC and Northwest, as well as TWA and Braniff. Fornaro Read more

Profile

AirTran Holdings provides low-cost air transportation targeting both leisure and business passengers. The firm operates a fleet of Boeing jets, comprised of 717s and a growing Read more

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