Airtran 2006 Annual Report Download - page 7

THE COMPANY :
All of the operations of AirTran Holdings, Inc. (the Company, AirTran, we or us) are conducted by our wholly-owned subsidiary, AirTran Airways, Inc. (AirTran Airways
or Airways). AirTran Airways is one of the largest low cost scheduled airlines in the United States in terms of departures and seats offered. We operate scheduled
airline service primarily in short-haul markets principally in the eastern United States, with a majority of our flights originating and terminating at our hub in
Atlanta, Georgia. As of February 1, 2007, we operated 87 Boeing 717-200 (B717) and 41 Boeing 737-700 (B737) aircraft offering approximately 700 scheduled
flights per day to 51 locations in United States as well as to Freeport, Grand Bahamas.
We have created what we believe to be a successful business model by targeting value oriented business and leisure travelers with high quality service at affordable
fares. Our service is designed not only to satisfy the transportation needs of our target customers, but also to provide customers with a travel experience worth
repeating. The success of this strategy is evidenced by the 20.1 million revenue passengers who flew AirTran Airways during 2006, a 20.5 percent increase from
the 16.6 million revenue passengers we served in the prior year. We achieved these results with a cost structure that ranks among the lowest in the airline industry.
Our principal executive offices are located at 9955 AirTran Boulevard, Orlando, Florida 32827, and our telephone number is [phone]. Our official website
address is www.airtran.com. Our audit committee charter, code of conduct and ethics, and filings with the U.S. Securities and Exchange Commission, including
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports, are accessible free of charge at
www.airtran.com. Any waiver of the terms of our code of conduct and ethics for the chief executive officer, the chief financial officer, any accounting officer and all
other executive officers will be disclosed on our website. During 2006, we posted in a timely manner all Exchange Act reports required to be filed during the period.
The reference to our website does not constitute incorporation by reference of any information contained at that site.
PROPOSED ACQUISITION OF MIDWEST AIR GROUP :
We believe that a combination of AirTran Airways and Midwest Air Group (Midwest) would provide substantial benefits to the shareholders, customers, employees
and other stakeholders of the two companies. On January 11, 2007, we commenced an exchange offer for all of the outstanding shares of Midwest, for $13.25 per
Midwest share, based on the closing price of our common stock on January 8, 2007. The offer consists of $6.625 in cash and 0.5884 share of AirTran common stock
for each Midwest share. The total equity value of the exchange offer is approximately $345 million. The offer, which is being made through a wholly-owned subsidiary
of the Company, has been extended and is scheduled to expire on March 8, 2007. The exchange offer is subject to specified and customary conditions. On January
25, 2007, the board of directors of Midwest announced that it had unanimously recommended that Midwest’s shareholders reject our offer to acquire all outstanding
shares of Midwest and not tender their shares to us. Because we believe a combination of the two airlines would strengthen both airlines, we are continuing to
pursue the acquisition of Midwest. We have filed a registration statement (Form S-4 No. 333-139917) with the Securities and Exchange Commission which contains
additional information regarding the exchange offer and the benefits and risks related to the proposed acquisition.
BUSINESS STRATEGY :
Quality Low Fare Service. We established our competitive position by providing affordable fares that appeal to price conscious travelers. We have grown our business
through innovative product offerings designed to enhance the entire airline travel experience of our customers while maintaining affordable fares. The AirTran
experience features:
•competitive fares offered in an easy to understand fare structure
•user-friendly automated services for reservations, ticketing and check-in through our
•award winning website, airtran.com
•Bye-Pass™airport self-service kiosks
•customer friendly services, including
•a highly affordable business class
•advance seat assignments
•special amenities, including XM Satellite Radio, which we introduced to the air travel industry and have now deployed across our entire fleet
•some of the industry’s fastest growing customer loyalty programs, including our
•unique A+ Rewards™program
•A2B™corporate travel program
Through the AirTran experience, we have created an air travel product with broad appeal which generates a growing number of repeat customers.
We believe our comparatively low-cost structure will enable us to continue our existing successful strategies, expand our network, provide us with opportunities to
further enhance the AirTran experience in innovative ways and stimulate increased demand for air travel from existing and new customers.
New and Modern Fleet. Our entire fleet is comprised of B717 and B737 aircraft. We were the launch customer for the B717, which was designed specifically for
efficient short-haul service. As of February 1, 2007, our fleet included 87 B717 aircraft. We believe the B717 remains ideally suited for the short-haul, high-frequency
service that we primarily operate and provides operating efficiencies which support our low cost structure. The manufacturer of the B717 discontinued the
production of the aircraft in 2006.
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PART I
ITEM 1. BUSINESS