It's Official - Airbus is the Winner!
Atlantic Coast Airlines Announces Order for 25 Airbus Aircraft
A319s and A320s To Be Deployed At Washington Dulles,
Providing Company’s Low-Fare Airline with Transcontinental
Capability
Dulles, VA, (November 18, 2003) - Atlantic Coast Airlines, the
Dulles, VA-based carrier (ACA) (NASDAQ/NM: ACAI)
announced it has entered into agreements to acquire 25 Airbus
A320-family aircraft, with options for additional aircraft. These
efficient, passenger-friendly aircraft will form the backbone of the
fleet for the company’s low-fare airline. The first of these aircraft
will arrive in September 2004 and will be ready for revenue
service as early as November 2004.
The company has entered into a binding memorandum of
understanding with Airbus for a firm order of ten new A319
aircraft configured with 132 seats, and five new A320 aircraft
configured with 156 seats, including full conversion rights. It has
also entered into leasing commitments from operating lessors
for ten additional A319 aircraft. Each aircraft will feature IAE
V2500-A5 engines. The aircraft will be equipped in a single-
class configuration, and will offer passengers a comfortable 33
inches of legroom between most rows.
Atlantic Coast Airlines Chairman and Chief Executive Officer
Kerry Skeen said, “Today’s announcement represents a major
step forward in our strategy to transform the company into one of
the leading low-fare carriers in the industry. The addition of the
Airbus aircraft to our fleet will allow us to fly coast-to-coast from
our hub at Washington Dulles to serve major destinations
beyond the reach of the CRJ-200. This is a key component in
our plan to offer consumers in the Washington, DC area and
across the country an airline with low, simple fares, excellent
service and convenient schedules featuring frequent departures
and flexible ticketing rules.”
“We are pleased with the favorable economics and business
terms we have achieved in this deal. By placing the order at this
time we are able to take advantage of these favorable terms as
well as delivery positions that are currently available, which are
critical to the implementation of our low-fare strategy.” He added,
“Our Board’s decision to go with Airbus aircraft was the result of
an intense bidding process. The company received competitive
proposals from airframe, engine, and equipment suppliers, all of
whom were vying to participate in this order following their
extensive review of our business plan. We believe that this
agreement clearly demonstrates the confidence that Airbus and
our new lessors have in our new business plan.”
Atlantic Coast Airlines is uniquely positioned to execute its
strategy to establish an independent low-fare airline. The
Washington, DC metropolitan area is the fifth largest air travel
market in the U.S. with more than 40 million local passengers
per year. The company’s existing infrastructure will provide
immediate critical mass at Dulles, and the company believes
that its cost structure will allow it to operate its Airbus aircraft at
competitive costs relative to other low-fare carriers. The
company’s pilots have voiced their clear support for the
company’s business strategy by overwhelmingly approving
competitive pay scales and work rules for the operation of the
these aircraft as part of their recently announced revised
contract.
With 44 gates, 87 regional jets and a fleet that will include at
least 25 Airbus jets, ACA will operate more than 325 daily
departures from Dulles, offering high-frequency service to a
large number of markets for both local and connecting
passengers. The company’s high-utilization operation and low
distribution costs will allow it to offer walk-up fares up to 70%
lower than those offered today for service to and from
Washington Dulles.
The company intends to implement its new independent low-
cost carrier strategy as soon as its existing contract with United
Airlines has been terminated. The name and branding identity
for the low-fare airline will be revealed at a ceremony scheduled
for Wednesday, November 19th at 2:00pm, to be held at ACA’s
state-of-the-art Washington Dulles maintenance facility.
ACA currently operates as United Express and Delta
Connection in the Eastern and Midwestern United States as well
as Canada. On July 28, 2003, ACA announced plans to
establish a new, independent low-fare airline to be based at
Washington Dulles International Airport. The company currently
has a fleet of 148 aircraft—including a total of 120 regional
jets—and offers over 840 daily departures, serving 84
destinations. ACA employs approximately 4,600 aviation
professionals.
The common stock of parent company Atlantic Coast Airlines
Holdings, Inc. is traded on the Nasdaq National Market under
the symbol ACAI. For more information about ACA, visit our
website at
www.atlanticcoast.com.
Statements in this press release and by company executives
regarding its implementation of new business strategies and its
relationship with United Airlines, Inc., regarding the unsolicited
acquisition proposal by Mesa Air Group, Inc. and other matters,
as well as regarding operations, earnings, revenues and costs,
represent forward-looking information. A number of risks and
uncertainties exist which could cause actual results to differ
materially from these projected results. Such risks and
uncertainties include, among others: whether Mesa Air Group,
Inc. succeeds in its efforts to take control of the company through
its proposed consent solicitation and to acquire all of the
outstanding shares of the company’s common stock; the costs of
reviewing and responding to the unsolicited Mesa proposal, and
other impacts of the proposal on the company’s operations;
United’s option under bankruptcy rules to assume or reject the
existing United Express Agreement; the timing of any
disengagement by the company as a United Express carrier
under the United Express Agreement or pursuant to bankruptcy
court proceedings and impact on the company’s ability to
operate an independent airline; the ability to successfully
implement a transition from United Express service; the ability to
effectively implement its low-fare business strategy utilizing a
mix of narrowbody aircraft and regional jets; the ability to acquire
and obtain financing for the narrowbody aircraft; the ability to
compete effectively as a low-cost carrier, including passenger
response to its new service, and the response of United or other
competitors with respect to service levels and fares in markets to
be operated by the company; the availability of additional or
alternative business opportunities for the company’s operations;
the effects of United’s bankruptcy proceedings; the continued
financial health of Delta Air Lines, Inc., and the ability and
willingness of Delta to continue to deploy the company’s aircraft
and to utilize and pay for scheduled service at agreed upon
rates; availability and cost of product support for the company’s
328JET aircraft; unexpected costs arising from the insolvency of
Fairchild Dornier; general economic and industry conditions;
additional acts of war or terrorism; and risks and uncertainties
arising from the events of September 11, any of which may
impact the company, its aircraft manufacturers and its other
suppliers in ways that the company is not currently able to
predict. Certain of these and other risk factors are more fully
disclosed under “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”
in the company’s Annual Report on Form 10-K for the year
ended December 31, 2002 and in its Quarterly Report on Form
10-Q for the nine-month period ended September 30, 2003.
These statements are made as of November 18, 2003 and ACA
undertakes no obligation to update any such forward-looking
information, including as a result of any new information, future
events, changed expectations or otherwise.
# # #