Airtran 2009 Annual Report Download - page 16

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Our schedules are designed to provide convenient nonstop service and connections for our business and leisure
travelers to our hubs and focus cities and to facilitate connections for our passengers traveling through our hubs
and focus cities. Our network strength in Atlanta provides a strong base of local and connecting traffic.
We offer an easy to understand fare structure with a variety of fares at differing advance purchase intervals as
well as “walk-up” fares. We manage the availability of seats at each fare level by day of week and by flight to
maximize revenue. From time to time we also revise our fares and implement fuel surcharges.
All of our fares are one-way and most tickets are nonrefundable but can be changed prior to departure with a
service charge. Our fares never require a round trip purchase or a minimum stay (e.g., Saturday night stay).
Our fares for an individual flight typically vary based on the length of time that a ticket is booked in advance
and whether the passenger wishes to travel in Business Class. Our fare offerings are in direct contrast to
historical pricing policies in the industry which typically feature many different price offerings and restrictions
for seats on any one flight. We have established interline ticketing and baggage agreements with various airlines
which can increase our revenue opportunities and assist us with accommodating passengers during irregular
operations.
In 2009, we announced a new marketing agreement with SkyWest Airlines Inc., a subsidiary of SkyWest, Inc.,
to support our Milwaukee focus city. Service under this new agreement commenced in late 2009. Under this
new agreement, SkyWest Airlines offers regional jet service between Milwaukee and six destinations. These
flights are operated by SkyWest Airlines and are available for customers to book through AirTran's normal
distribution channels. Seats on these flights are sold in conjunction with AirTran Airways flights with revenue
shared on a pro-rated basis. Once fully implemented in February 2010, SkyWest Airlines will offer 18 daily
non-stop flights from Milwaukee to six destinations, and, together with our marketing partner, we will serve 22
non-stop destinations to and from Milwaukee.
In the future, we may add new markets to our existing routes and/or additional service between cities that are
already served by us. If necessary, we may exit unprofitable routes. Our selection of markets depends on a
number of factors existing at the time we consider service. In our city selection process, we evaluate the market
demographics, the potential for service diversification, our anticipated ability to stimulate air travel, and various
competitive factors. Consequently, there can be no assurance that we will continue to provide service to all of
the markets we currently serve.
Ancillary Revenue
In 2007, we began unbundling our pricing and services. Today, non-fare ancillary revenue is an important
source of our revenue from operations. Traditional sources of ancillary revenues include fees we charge for the
carriage of pets; liquor sales; excess baggage charges; special services fees, such as fees related to the
transportation of unaccompanied minors; and revenue from the sale of frequent travel credits. In 2007, we
introduced optional fees for advance seat assignments and a fee for call center services. In 2008, we introduced
fees for priority seat selection, the extension or transfer of A+ Miles Rewards, in addition to fees for the
purchase of A+ Miles Rewards, and for checked baggage with a fee for the second checked bag and, as of the
end of the year, a fee for the first checked bag. We continually evaluate potential new services which may be of
interest to our customers, especially services for which our customers are prepared to pay a fee and from which
we may derive additional ancillary revenue. As a result of the unbundling of our pricing and services and, to a
lesser extent the introduction of new fee-generating services, our ancillary revenues have grown since 2007,
with significant growth in ancillary revenues occurring in 2008 with the introduction of checked bag fees and in
2009, with a full year of checked bag fees for all checked baggage. We will continue to evaluate how and when
we offer unbundled services as well as consider new services in 2010.