AirTran's Milwaukee operation 'solidly profitable': Fornaro

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AirTran Airways reports that its Milwaukee operation is performing well, with CEO Bob Fornaro saying that the city has "a bright future" in the carrier's route network.

"After a tough winter, Milwaukee has been solidly profitable for us in the second quarter despite significantly higher fuel costs," Fornaro told analysts during a call discussing AirTran's second quarter financial results.

Fornaro also reported that passenger unit revenues out of the city are growing faster than the rest of the system, rising over 20% year-over-year in the second quarter, and roughly 30% in June.

The carrier's systemwide passenger revenue per available seat mile (PRASM) rose 12.6% year-over-year.

Fornaro says the biggest improvements are being seen on routes to business markets on the east coast.

AirTran began to build up a large presence in Milwaukee after it failed to acquire Midwest Airlines in 2007. Midwest was acquired by Republic Airways Holdings last year. Republic is now consolidating its Midwest and Frontier operations under the Frontier name.

Fornaro claims that Midwest's frequent flyer base in Milwaukee has "eroded," while AirTran has been building up loyalty in the market.

Southwest Airlines also launched service last November to Milwaukee with six routes, resulting in more competition for AirTran and Midwest.

Fornaro acknowledges Milwaukee's "absolute profitability still trails our system average". But he says results should continue to improve as AirTran slows capacity growth and becomes an established player in Milwaukee.