the airtran story - rajeev dhawan

The AirTran Story

Georgia State UniversityFebruary 2007

The AirTran StoryThe AirTran Story

Georgia State UniversityGeorgia State UniversityFebruary 2007February 2007

Please note that the discussion today may contain forward lookinPlease note that the discussion today may contain forward looking g statements that involve risks and uncertainties including those statements that involve risks and uncertainties including those relating to relating to the companythe company’’s ability to develop new markets, its fleet and growth plans, s ability to develop new markets, its fleet and growth plans, its low cost advantage vs. competitors, its ability to obtain fiits low cost advantage vs. competitors, its ability to obtain financing, and nancing, and its ability to improve profitability and net worth.its ability to improve profitability and net worth.

These statements are subject to a number of risks that could cauThese statements are subject to a number of risks that could cause actual se actual results to vary materially from those presented today. These riresults to vary materially from those presented today. These risks include, sks include, but are not limited to, general economic conditions, commodity pbut are not limited to, general economic conditions, commodity prices, rices, government regulation, and the competitive environment. government regulation, and the competitive environment.

Additional information concerning factors that could cause actuaAdditional information concerning factors that could cause actual results to l results to vary from those in the forward looking statements are contained vary from those in the forward looking statements are contained in AirTran in AirTran Holdings Form 10Holdings Form 10--K for the year ended December 31, 2004.K for the year ended December 31, 2004.

33

Situation ThenSituation ThenSituation Then

Worn OutWorn OutProductProduct

Major FailuresMajor FailuresISIS

EmbarrassingEmbarrassingFacilitiesFacilities

2,9002,900EmployeesEmployees

2929Cities ServedCities Served

2828Average Fleet AgeAverage Fleet Age

99Support PlanesSupport Planes

4545PlanesPlanes

19991999

44

Situation TodaySituation TodaySituation Today

New Planes, New Planes, Business Class, Business Class,

Largest Bins, XM Largest Bins, XM Satellite RadioSatellite Radio


State of the ArtState of the ArtMajor FailuresMajor FailuresISIS

State of the ArtState of the ArtEmbarrassingEmbarrassingFacilitiesFacilities

8,5008,5002,9002,900EmployeesEmployees


~ 3~ 32828Average Fleet AgeAverage Fleet Age

1.51.599Support PlanesSupport Planes

1271274545PlanesPlanes

2007200719991999

AirTran Airways Route Network Summer 2001AirTran Airways Route Network Summer 2001AirTran Airways Route Network Summer 2001

Grand BahamaGrand Bahama

AtlantaAtlanta

MinneapolisMinneapolisBuffalo/NiagaraBuffalo/Niagara

BostonBoston

Dallas/Ft. WorthDallas/Ft. Worth

Gulfport/BiloxiGulfport/BiloxiHoustonHouston

New OrleansNew OrleansTampaTampa

MiamiMiamiFt. LauderdaleFt. Lauderdale

Ft. Walton Ft. Walton BeachBeach

MemphisMemphis

JacksonvilleJacksonville

OrlandoOrlando

Ft. MyersFt. Myers

SavannahSavannah

Myrtle BeachMyrtle Beach

RaleighRaleigh//DurhamDurham

Newport Newport News/WilliamsburgNews/Williamsburg

Washington, D.C.Washington, D.C.

Moline/Quad Moline/Quad CitiesCities Bloomington/Bloomington/

NormalNormal

ChicagoChicagoFlintFlint

New York CityNew York CityNewarkNewark

PhiladelphiaPhiladelphiaToledoToledo

DaytonDayton

Akron/Akron/CantonCanton

PittsburghPittsburgh

Greensboro/Greensboro/High Pt/WinstonHigh Pt/Winston--SalemSalem


AtlantaAtlanta


BostonBoston


Gulfport/BiloxiGulfport/BiloxiHoustonHouston

New OrleansNew OrleansTampaTampa


Ft. Walton Ft. Walton BeachBeach

MemphisMemphis


OrlandoOrlando

Ft. MyersFt. Myers

SavannahSavannah





Moline/Quad Moline/Quad CitiesCities Bloomington/Bloomington/

NormalNormal

ChicagoChicagoFlintFlint


PhiladelphiaPhiladelphiaToledoToledo

DaytonDayton



Greensboro/Greensboro/High Pt/WinstonHigh Pt/Winston--SalemSalem


AirTran Airways Route Network Has EvolvedAirTran Airways Route Network Has Evolved


BostonBoston

Gulfport/BiloxiGulfport/BiloxiHoustonHouston New OrleansNew Orleans

TampaTampa


MemphisMemphis

Ft. MyersFt. Myers

Daytona BeachDaytona Beach



MolineMoline

BloomingtonBloomington--NormalNormal

FlintFlint


PhiladelphiaPhiladelphiaBaltimoreBaltimore


RochesterRochester

WichitaWichita

Kansas CityKansas City

West Palm BeachWest Palm Beach

PensacolaPensacola

DenverDenver

Las VegasLas Vegas

MilwaukeeMilwaukee

SavannahSavannahJacksonvilleJacksonville

Los AngelesLos Angeles

San FranciscoSan Francisco


DaytonDayton

CharlotteCharlotte

SarasotaSarasota

IndianapolisIndianapolis

RichmondRichmond

DetroitDetroit


AkronAkron--CantonCanton

Since September 2001: 21 new cities 84 new routes

ChicagoChicagoChicago

OrlandoOrlando

SeattleSeattle

White PlainsWhite Plains

AtlantaAtlantaAtlantaPhoenixPhoenix

77

AirTran’s Diversification StrategiesAirTranAirTran’’s Diversification Strategiess Diversification Strategies

Fort Myers, Freeport

Akron-Canton

Atlanta

New YorkBoston

Growth by Replacement - MetroJet Growth by Development

Ft. LauderdaleFort MyersOrlandoTampa

Baltimore

Dayton

Boston

Atlanta

Orlando, Tampa, Ft. Lauderdale,

Sarasota

Rochester

CharlotteDallas

88

White PlainsWhite Plains

AirTran Continues To Build City PresenceAirTran Continues To Build City PresenceAirTran Continues To Build City Presence

Bloomington

Buffalo

Newark

MiamiMiami


Denver

Pensacola

FreeportFreeport

Wichita

Gulfport

Kansas City

Memphis

Moline

Minneapolis

New YorkNew York

SavannahSavannahJacksonvilleJacksonville

OrlandoOrlando

WashingtonWashington


Raleigh-Durham

BaltimoreBaltimore

Flint

Las Vegas

Dayton

52

Milwaukee

Charlotte

RichmondRichmond

AtlantaAtlanta

11

9Chicago

TampaTampa

BostonBoston

10

7Akron/Akron/CantonCanton

8

13 Ft. LauderdaleFt. Lauderdale


PhiladelphiaPhiladelphia

5RochesterRochester

11Ft. MyersFt. Myers

SarasotaSarasota 613

Newport NewsNewport News5

DetroitDetroit6

Newburgh

25Daytona BeachDaytona Beach

Phoenix

6

Houston

Los Angeles

New Orleans

San Francisco

Seattle

5Pittsburgh

>5 Jet Destinations Served

Dallas

99

The 737 Has Also Expanded Our Opportunities The 737 Has Also Expanded Our Opportunities The 737 Has Also Expanded Our Opportunities

BaltimoreWichita

Seattle

San Francisco

Los Angeles Las Vegas

Denver

Dallas

Minneapolis

Chicago

Orlando

Cancun San Juan

ATLANTA

717-200 / BR715

737-700 / CFM56

1010

Low Cost Carrier (LCC) ModelLow Cost Carrier (LCC) ModelLow Cost Carrier (LCC) Model

Leveraged Internet TechnologyLeveraged Internet TechnologyLimited Distribution ChannelsLimited Distribution Channels

Best Customer ServiceBest Customer ServicePoor Service Poor Service

Trend SettersTrend SettersCopied Legacy AirlinesCopied Legacy Airlines

Strong Integrated Route NetworkStrong Integrated Route NetworkLimited PointLimited Point--toto--Point MarketsPoint Markets

Place to WorkPlace to WorkPoorly ManagedPoorly Managed

Industry Leading TechnologyIndustry Leading TechnologyWeak I.S.Weak I.S.

Strong Cash PositionStrong Cash PositionUnder CapitalizedUnder Capitalized

Best AirplanesBest AirplanesCheap AirplanesCheap Airplanes

NEWNEWOLDOLD

1111

Situation TodaySituation TodaySituation Today




State of the ArtState of the ArtMajor FailuresMajor FailuresISIS

State of the ArtState of the ArtEmbarrassingEmbarrassingFacilitiesFacilities

8,5008,5002,9002,900EmployeesEmployees


~ 3~ 32828Average Fleet AgeAverage Fleet Age



2007200719991999

1212

Situation TomorrowSituation TomorrowSituation Tomorrow

Video?, Cellular?, Video?, Cellular?, Web?, ???Web?, ???




State of the ArtState of the ArtState of the ArtState of the ArtMajor FailuresMajor FailuresISIS

State of the ArtState of the ArtState of the ArtState of the ArtEmbarrassingEmbarrassingFacilitiesFacilities

12,00012,0008,5008,5002,9002,900EmployeesEmployees


33~ 3~ 32828Average Fleet AgeAverage Fleet Age



201020102006200619991999

1313

AirTran-Midwest Transaction RationaleAirTranAirTran--Midwest Transaction RationaleMidwest Transaction RationaleComplementary route networks with limited overlapComplementary route networks with limited overlapCombine AirTranCombine AirTran’’s strong East Coast network with Midwests strong East Coast network with Midwest’’s hubs in s hubs in Milwaukee and Kansas CityMilwaukee and Kansas CityImproved scale in consolidating industry with improved incrementImproved scale in consolidating industry with improved incrementalalgrowth opportunitiesgrowth opportunities

Network

717 fleet commonality creates significant and unique cost synerg717 fleet commonality creates significant and unique cost synergiesiesAbility to upgrade MidwestAbility to upgrade Midwest’’s MDs MD--80 fleet with AirTran80 fleet with AirTran’’s new, more s new, more fuel efficient 737fuel efficient 737--700s700sAdditional 737 deliveries create growth opportunitiesAdditional 737 deliveries create growth opportunities

Fleet

Over $60MM of annual runOver $60MM of annual run--rate synergiesrate synergies–– Does not include impact of greater city presenceDoes not include impact of greater city presenceEPS accretive in first full year after the acquisitionEPS accretive in first full year after the acquisitionFinancial strength provides growth potential and job securityFinancial strength provides growth potential and job security

Financial

1414

AirTran-Midwest CombinationAirTranAirTran--Midwest CombinationMidwest Combination


Newport NewsNewport News

NewarkNewark



MinneapolisMinneapolisBuffaloBuffalo

BostonBoston


Gulfport/BiloxiGulfport/BiloxiHoustonHouston New OrleansNew Orleans

TampaTampa


MemphisMemphis


OrlandoOrlando

Ft. MyersFt. Myers

SavannahSavannah


MolineMoline

BloomingtonBloomington

ChicagoChicago

FlintFlint

PhiladelphiaPhiladelphia

DaytonDayton



BaltimoreBaltimore

RochesterRochester

WichitaWichita

PensacolaPensacola

DenverDenver

Las VegasLas Vegas

Los AngelesLos Angeles CharlotteCharlotte

San FranciscoSan Francisco

PhoenixPhoenix


NashvilleNashville

SarasotaSarasota

TorontoToronto

SeattleSeattle

San AntonioSan Antonio

OmahaOmahaDes MoinesDes Moines

RichmondRichmondSt LouisSt Louis

Kansas CityKansas City

AtlantaAtlanta

Daytona BeachDaytona Beach

MilwaukeeMilwaukee

AirTran

Midwest

Combined carrier will be well positioned in key markets throughout the Eastern, Midwestern, and Southeastern U.S.

DetroitDetroit New York CityNew York City


White PlainsWhite PlainsNewburghNewburgh

San DiegoSan Diego

1515

Thank YouThank YouThank You

the airtran story - rajeev dhawan

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