ATA Sets Goal of Connecting Southwest Passengers On Overseas Flights
Aviation Week & Space Technology
12/12/2005
ATA sets goal of connecting Southwest passengers on long-haul flights
Printed headline: Overseas Partner
Management of ATA Airlines envisions the carrier, now in Chapter 11 reorganization, to be the instrument that will take passengers of its partner Southwest Airlines beyond the continental U.S.
Connecting flights are being planned to Hawaii from Oakland and Los Angeles. Flights to the Caribbean would connect through Orlando, Fla., and possibly through Puerto Rico's San Juan International Airport. Chicago Midway Airport, where Southwest acquired ATA gates, might serve as a base for international flights.
Meanwhile, the ATA-Southwest relationship is growing. This month, code-sharing flights are connecting to 225 Southwest city pairs, up from 160 last February.
A Southwest official confirms the possibility. "It's something very interesting to us and we're looking at it," she says. International code-sharing with ATA would not be Southwest's first. It experimented with a partnership for a time with Icelandair between Baltimore Washington International and Reykjavik.
Another change in store for ATA is a shift to a greater proportion of military and commercial charters while, beginning next year, scheduled services take a backseat.
Much of this information was contained in an amended disclosure statement under discussion last week in U.S. Bankruptcy Court in Indianapolis. ATA is asking for court approval of the statement so reorganizers can seek confirmation of the business plan by parties to the case.
Under the plan, ATA would derive 56% of its revenues next year from charters. Charter aircraft would grow from the current five, all Lockheed L-1100s, to 12 and could include a Boeing 767-300. Military charter revenues are projected to increase to $438 million next year from $395 million in 2005 and to $453 million in 2008. Revenues for commercial charters are expected to rise from $18 million this year to $31 million next year and to $36 million by 2008.
ATA is in the process of reducing the size of its fleet for 2006 while management is working on future expansion. Scheduled services will not increase until 2007-08, and Hawaii will be in focus as a destination, according to the plan. ATA is considering a shift of operations from San Francisco to Oakland where Southwest is based. The FAA has granted extended range operations (ETOPS) approval for ATA crews and Boeing 737-800s for the Hawaii flights.
The carrier is expecting a $583.9-million net loss this year, including $498.5 million in reorganization expenses and an $80.3-million operating loss. An operating profit of $12 million is forecast for 2006, climbing steadily to $20.4 million in 2008.
In terms of fuel, ATA estimates the average expected into-plane fuel price per gallon will be $2.02 in 2006, $1.99 in 2007 and $2 in 2008. This was calculated by adding estimated taxes and fees to the projected price using the BP jet fuel pricing curve. Price assumptions correlate to crude oil per-barrel prices of $58.70 next year, $58.23 in 2007 and $57.24 in 2008.
