"Their strategy as an LCC (low-cost carrier) is working," said Calyon Securities analyst Ray Neidl.
The Orlando, Florida-based carrier said its operating revenue increased 44.2 percent to $528 million. AirTran's unit revenue -- revenue per available seat mile -- 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.
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Chief Financial Officer Stan Gadek said on a conference call with analysts that AirTran has hedged 57.5 percent of its fuel exposure, locking in a range of $2.15 to $2.20 per gallon. In the fourth quarter, the carrier has hedged 43.8 percent of its fuel exposure in a range of $2.10 to $2.15 per gallon.AirTran, however, has used a different strategy. Instead of cutting capacity -- the number of seats for sale -- the airline has pursued an aggressive growth plan. When rivals pull planes from a route, AirTran often uses that opportunity to add flights.
In December, AirTran seized on the misfortunes of ATA Airlines, which cut service from Chicago's Midway International Airport. AirTran quickly announced new service between Chicago and New York, Dallas, Minneapolis, Atlanta, Orlando and Sarasota, Florida.
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