AirTran reports 1st-quarter profit despite recession

ATLANTA -- Parent company AirTran Holdings said it had a profit of $28.7 million despite a 9% drop in revenue, compared with a restated loss of $35.4 million for the first quarter of last year.

Not even long-profitable discounter Southwest Airlines had been able to claim a profit so far, as major airlines the last two weeks have reported first-quarter losses attributable to so few people flying in this recession.

The woes of U.S. airlines reflect a deep downturn globally in air traffic and are having a ripple effect. Boeing, the giant U.S. airplane maker, reported that its first-quarter profit dropped by half, as airlines have postponed delivery of new planes.

The aircraft manufacturer said it earned $610 million, or 86 cents a share, compared with $1.2 billion, or $1.62 a share, in the first three months of last year.

In response, Boeing said it planned to slash spending and restructure parts of its business. Earlier this year, Boeing said it would cut 10,000 jobs and slow production of some of its commercial jetliners.

Wednesday's results included a charge of 38 cents related to planned production cuts of its twin-aisle 777, plans to delay stepped-up production of its 747-8 and 767 planes, and lower anticipated prices.

Revenue edged up 3% to $16.5 billion. Boeing shares rose 65 cents, or 1.8%, to close at $37.30.

J.B. Groh, an analyst at D.A. Davidson & Co., said investors were encouraged by Boeing's indication that the 787 program remains on schedule, with the first test flight of the next-generation aircraft scheduled for this quarter and deliveries slated to begin early next year.