AirTran Holdings, Inc., Reports Record Quarterly Profit of $32.0 Million

ORLANDO, Fla., July 27 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc., , the parent company of AirTran Airways, Inc., today reported a net income of $32.0 million or $0.33 per diluted share for the second quarter 2006. AirTran Airways set new all-time quarterly records for net income, traffic as measured by revenue passenger miles (RPMs), capacity as measured by available seat miles (ASMs), passengers enplaned and load factor.

Commenting on the quarter, Joe Leonard, AirTran Airways' chairman and chief executive officer said, "I am very proud of our record breaking second quarter performance. These results would not have been possible without the hard work of our 7,700 Crew Members, and these numbers speak clearly of the customers' demand for our product."

During the second quarter, AirTran Airways' unit revenue increased 16.8 percent year over year on a 2.4 percentage point increase in load factor and a 13.2 percent improvement in yield.

Bob Fornaro, AirTran Airways' president and chief operating officer said, "Our unit revenue performance was especially gratifying since we accomplished it on top of a 23.3 percent increase in capacity. Our operation continues to improve as we wind down the busy summer season thanks to the teamwork and dedication of our Crew Members."

During the second quarter, fuel prices increased 33 percent year over year resulting in a 10.8 percent increase in operating costs per ASM. Stan Gadek, AirTran Airways' chief financial officer said, "While oil prices rose to record levels, AirTran Airways managed its non-fuel unit costs amidst record growth seeing only a 1.6 percent increase." Gadek went on to say, "We expect to see a reduction in non-fuel unit costs in the second half of 2006 year over year as we take delivery of eight additional Boeing 737-700 aircraft."

Highlights of AirTran Airways' accomplishments during the second quarter and to date include:

* Exercised options for 24 additional Boeing 737-700s, confirming the remaining options on our 100 aircraft order placed in the summer of 2003. These aircraft will be delivered in 2008-2010. * Took delivery of six Boeing 737s and our final two Boeing 717s. * Ratified five year contract with International Brotherhood of Teamsters for the Stores Clerks in June 2006. * Operated over 225 daily flights from Hartsfield-Jackson Atlanta International Airport.

AirTran Airways continues to expand its network with additional cities and expanded flight offerings:

* Commenced service to White Plains, N.Y., in April with nonstop flights to Atlanta, Orlando and West Palm Beach. * Commenced service to Seattle from Atlanta on May 25, 2006. * Launched new nonstop service from Indianapolis to Los Angeles and San Francisco.

AirTran Holdings, Inc., will conduct a conference call to discuss second quarter results today at 10 a.m. EDT. A live broadcast of the conference call will be available via the internet at http://www.airtran.com/.

AirTran Airways, a Fortune 1000 company and one of America's largest low-fare airlines with more than 7,700 friendly, professional Crew Members, operates nearly 700 daily flights to 50 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways' aircraft features the fuel-efficient Boeing 737-700 and 717-200 to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. For reservations or more information, visit http://www.airtran.com/ (America Online Keyword: AirTran).

Editor's note: Statements regarding the Company's operational and financial success, business model, expectation about future success, improved operational performance and our ability to maintain or improve our low costs are forward-looking statements and are not historical facts. Instead, they are estimates or projections involving numerous risks or uncertainties, including but not limited to, consumer demand and acceptance of services offered by the Company, the Company's ability to maintain current cost levels, fare levels and actions by competitors, regulatory matters and general economic conditions. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including but not limited to the Company's annual report on Form 10-K for the year ended December 31, 2005. The Company disclaims any obligation or duty to update or correct any of its forward-looking statements.

Media Contacts: Tad Hutcheson tad.hutcheson@airtran.com 678.254.7442 Judy Graham-Weaver judy.graham-weaver@airtran.com 678.254.7448 Arne Haak (Financial) 407.318.5187 AirTran Holdings, Inc. Consolidated Statements of Income (In thousands, except per share data and statistical summary) (Unaudited) Three Months Ended June 30, Percent 2006 2005 Change ---------- ---------- -------- Operating Revenues: Passenger $509,447 $353,705 44.0 Cargo 865 1,100 (21.4) Other 17,851 11,518 55.0 ---------- ---------- Total operating revenues 528,163 366,323 44.2 Operating Expenses: Salaries, wages and benefits 96,508 80,107 20.5 Aircraft fuel 175,116 108,265 61.7 Aircraft rent 56,915 47,789 19.1 Distribution 19,736 17,935 10.0 Maintenance, materials and repairs 39,569 25,683 54.1 Landing fees and other rents 26,380 20,684 27.5 Aircraft insurance and security services 6,386 5,958 7.2 Marketing and advertising 11,960 8,130 47.1 Depreciation 6,208 4,502 37.9 Other operating 34,884 27,734 25.8 ---------- ---------- Total operating expenses 473,662 346,787 36.6 ---------- ---------- Operating Income 54,501 19,536 - Other (Income) Expense: Interest income (5,549) (2,572) - Interest expense 8,617 4,860 77.3 ---------- ---------- Other (income) expense, net 3,068 2,288 34.1 ---------- ---------- Income Before Income Taxes 51,433 17,248 - Income Tax Expense 19,475 5,889 - ---------- ---------- Net Income $31,958 $11,359 - ========== ========== Income per Common Share Basic $0.36 $0.13 - Diluted $0.33 $0.13 - Weighted-average Shares Outstanding Basic 88,337 86,980 1.6 Diluted 101,398 100,781 0.6 EBITDA $60,709 $24,038 - Operating margin 10.3 percent 5.3 percent 5.0 pts. Net margin 6.1 percent 3.1 percent 3.0 pts. Second Quarter Statistical Summary: Revenue passengers 5,409,351 4,295,783 25.9 Revenue passenger miles (000s) 3,702,762 2,909,512 27.3 Available seat miles (000s) 4,739,070 3,844,783 23.3 Block hours 114,621 94,991 20.7 Passenger load factor 78.1 percent 75.7 percent 2.4 pts. Break-even load factor 70.2 percent 72.0 percent (1.8)pts. Average fare $94.18 $82.34 14.4 Average yield per RPM 13.76 cents 12.16 cents 13.2 Passenger revenue per ASM 10.75 cents 9.20 cents 16.8 Operating cost per ASM 9.99 cents 9.02 cents 10.8 Fuel price neutral cost per ASM 9.08 cents 9.02 cents 0.7 Non-fuel operating cost per ASM 6.30 cents 6.20 cents 1.6 Average cost of aircraft fuel per gallon 226.13 cents 169.98 cents 33.0 Gallons of fuel burned 77,440,100 63,693,929 21.6 Weighted-average number of aircraft 113 94 20.2 AirTran Holdings, Inc. Consolidated Statements of Income (In thousands, except per share data and statistical summary) (Unaudited) Six Months Ended June 30, Percent 2006 2005 Change ---------- ---------- -------- Operating Revenues: Passenger $908,792 $642,841 41.4 Cargo 2,079 1,696 22.6 Other 33,334 21,493 55.1 ---------- ---------- Total operating revenues 944,205 666,030 41.8 Operating Expenses: Salaries, wages and benefits 188,773 158,440 19.1 Aircraft fuel 314,391 193,703 62.3 Aircraft rent 110,652 92,371 19.8 Distribution 35,684 33,186 7.5 Maintenance, materials and repairs 78,683 48,973 60.7 Landing fees and other rents 49,033 38,726 26.6 Aircraft insurance and security services 12,285 11,211 9.6 Marketing and advertising 23,002 17,646 30.4 Depreciation 12,282 8,820 39.3 Other operating 69,416 52,859 31.3 ---------- ---------- Total operating expenses 894,201 655,935 36.3 ---------- ---------- Operating Income 50,004 10,095 - Other (Income) Expense: Interest income (10,053) (4,919) - Interest expense 16,042 9,803 63.6 ---------- ---------- Other (income) expense, net 5,989 4,884 22.6 ---------- ---------- Income Before Income Taxes 44,015 5,211 - Income Tax Expense 16,665 1,881 - ---------- ---------- Net Income $27,350 $3,330 - ========== ========== Income per Common Share Basic $0.31 $0.04 - Diluted $0.29 $0.04 - Weighted-average Shares Outstanding Basic 88,540 86,862 1.9 Diluted 102,083 89,347 14.3 EBITDA $62,286 $18,915 - Operating margin 5.3 percent 1.5 percent 3.8 pts. Net margin 2.9 percent 0.5 percent 2.4 pts. Six Month Statistical Summary: Revenue passengers 9,896,836 7,853,492 26.0 Revenue passenger miles (000s) 6,763,030 5,359,293 26.2 Available seat miles (000s) 9,060,814 7,318,781 23.8 Block hours 221,679 183,172 21.0 Passenger load factor 74.6 percent 73.2 percent 1.4 pts. Break-even load factor 71.0 percent 72.7 percent (1.7)pts. Average fare $91.83 $81.85 12.2 Average yield per RPM 13.44 cents 11.99 cents 12.1 Passenger revenue per ASM 10.03 cents 8.78 cents 14.2 Operating cost per ASM 9.87 cents 8.96 cents 10.2 Fuel price neutral cost per ASM 9.01 cents 8.96 cents 0.6 Non-fuel operating cost per ASM 6.40 cents 6.32 cents 1.3 Average cost of aircraft fuel per gallon 212.04 cents 159.46 cents 33.0 Gallons of fuel burned 148,272,405 121,477,469 22.1 Weighted-average number of aircraft 110 92 19.6

Reconciliation of GAAP Financial Information to Non-GAAP Financial Information

Three Months and Six Months Ended June 30, 2006 and 2005

Pursuant to Regulation G of the Securities and Exchange Commission, we are providing further disclosure of the reconciliation of reported non-GAAP financial measures to their comparable financial measures reported on a basis consistent with U.S. Generally Accepted Accounting Principles (GAAP). Our disclosure of earnings before interest, taxes, depreciation and amortization (EBITDA), operating costs (CASM), non-fuel operating cost (Non-fuel CASM) and fuel price neutral cost per available seat mile (Fuel price neutral CASM), are consistent with financial measures reported by other airlines and are comparable to financial measures required in our submission to the United States Department of Transportation.

AirTran Holdings, Inc. Reconciliation of GAAP Financial Information to Non-GAAP Financial Information (In thousands) (Unaudited) The following table reconciles net income to EBITDA: Three months ended Six months ended June 30, June 30, 2006 2005 2006 2005 -------- -------- -------- -------- Net Income $ 31,958 $ 11,359 $ 27,350 $ 3,330 Add back: Income tax expense 19,475 5,889 16,665 1,881 Other (income) expense, net 3,068 2,288 5,989 4,884 Depreciation 6,208 4,502 12,282 8,820 -------- -------- -------- -------- EBITDA $ 60,709 $ 24,038 $ 62,286 $ 18,915 ======== ======== ======== ======== The following table shows the calculation of operating cost, non-fuel operating cost and fuel price neutral cost, and per ASM: Three months ended Six months ended June 30, June 30, 2006 2005 2006 2005 -------- -------- -------- -------- Total operating expenses $ 473,662 $ 346,787 $ 894,201 $ 655,935 Less: aircraft fuel (175,116) (108,265) (314,391) (193,703) --------- --------- --------- --------- Total operating expenses excluding aircraft fuel $ 298,546 $ 238,522 $ 579,810 $ 462,232 ========= ========= ========= ========= Calculation of cost per ASM using GAAP amounts: Total operating expenses $ 473,662 $ 346,787 $ 894,201 $ 655,935 Available seat miles (000s) 4,739,070 3,844,783 9,060,814 7,318,781 Operating cost per ASM (cents) (Total operating expenses/ASMs) 9.99 9.02 9.87 8.96 ========= ========= ========= ========= Three months ended Six months ended June 30, June 30, 2006 2005 2006 2005 ------ ------ ------ ------ Calculation of cost per ASM excluding fuel: Total operating expenses excluding fuel $ 298,546 $ 238,522 $ 579,810 $ 462,232 Available set miles (000s) 4,739,070 3,844,783 9,060,814 7,318,781 Operating cost per ASM excluding fuel (cents) (Total operating expenses excluding fuel/ASMs) 6.30 6.20 6.40 6.32 ========= ========= ========= ========= Calculation of fuel price neutral cost per ASM: Gallons of fuel burned 77,440,100 148,272,405 Prior year average cost of fuel (cents per gallon) 169.98 159.46 Total operating expenses $ 473,662 $ 894,201 Cost of aircraft fuel based on prior year price 131,633 236,435 Cost of aircraft fuel for current period (175,116) (314,391) --------- --------- Adjusted total operating expenses $ 430,179 $ 816,245 ========= ========= ASMs (000) 4,739,070 9,060,814 Fuel price neutral cost per ASM (cents) 9.08 9.01 ========= =========