Jun 26, 2001
AirTran Airways is to retire its remaining fleet of Boeing 737-200 aircraft - four in total - in the third quarter of 2001 in order to simplify its fleet and reduce costs. The aircraft will be retired during the third quarter.
The move occurs as AirTran Airways, the launch customer of the Boeing 717-200, continues to receive new 717s at a rate of at least one per month through 2003. AirTran Airways now operates 22 717s and will have a total of 30 717s in service by the end of 2001.
As a result, AirTran expects to increase its capacity by approximately 17 to 19 percent on an annual basis through to the end of 2001, after the 737 retirements. Twenty more 717s are on firm order through 2003, and 48 options and purchase rights are available to be exercised through 2005.
"AirTran Airways continues to grow, strengthen its fleet with new aircraft and become a popular affordable-fare airline in our 34 destinations," said Joseph Leonard, AirTran's Chairman and CEO. "These retirements will allow us to eliminate the incremental costs associated with operating a small third fleet of aircraft, such as pilot training and spare parts, and to focus on maximizing the efficiencies associated with an increasing fleet of fuel-efficient, customer-friendly equipment."
As part of the retirement plan, AirTran Holdings will take a non-recurring, after-tax charge of between USD$11 million and USD$15 million in the second quarter to write down three owned 737s, in accordance with SFAS 121, "Accounting for Impairment of Long-Lived Assets," and for charges related to the termination of the lease on the remaining 737.
AirTran Airways has signed a memorandum of understanding with Sky King, Inc., a Sacramento, California-based sports charter operator, for the sale of AirTran's three owned 737-200s. AirTran is negotiating with the lessor regarding the disposition of the remaining leased 737.