Low-cost carrier AirTran Airways does not plan to add capacity until 2011.

After the carrier sold eight aircraft in 2008 to trim its growth from a 20% annual rate between 1999 and 2007, the carrier is planning for zero growth this year and next year and only 3% to 4% growth in 2011.

In the meantime, the airline is focused on reallocating assets and managing its environment, AirTran president and CEO Bob Fornaro said during an investors call today. Right now the airline will do well during the next two years if there are no revenue improvements, he says, adding the current goal is for AirTran to earn its way out of 2008 losses due to volatile fuel costs.

The latest capacity announcement comes as the airline posted a record first quarter profit of $28.7 million in 2009 largely due to lower fuel prices, low costs and fleet and network adjustments.

As AirTran resumes capacity growth, the carrier appears interested in international offerings beyond Cancun, Mexico.

On the heels of the White House easing travel restrictions for Cuban-Americans and signalling interest in possibly allowing some commercial service to Cuba, AirTran is looking at what opportunities would exist if the United States changes the rules, carrier SVP of marketing and planning Kevin Healy says.

Cuba is a familiar destination for AirTran, which operated weekly Boeing 737 charters between Miami and Havana in 2003 and 2004.

Looking at AirTran's existing city pairs, advance bookings are ahead of expectations as the airline prepares to re-launch flights between Milwaukee, Wisconsin and Washington National airport on 11 June, airline CFO Arne Haak tells ATI.

In addition, the airline appears unphased by Southwest's plans to operate between Boston and Baltimore/Washington International airport starting 16 August. AirTran already competes with Southwest at Baltimore/Washington and Orlando International airport, Haak notes.

As for other existing markets, AirTran is seeing greater yield degradation in business passenger-heavy Atlanta than in leisure-strong Orlando as the economic downturn appears to impact the airline's corporate passengers more than its leisure passengers, Fornaro says.

That said, AirTran has stopped treating Orlando as just a destination market.

While 80% of Orlando traffic was inbound and leisure five or six years ago, originating passengers now account for at least one third, if not more, of the traffic, he says.

Source: Air Transport Intelligence news