AirTran Possibly Raising Cash for ???

[FL717]

AirTran Holdings, Inc. Files Shelf Registration Statement
Tuesday August 16, 4:30 pm ET

ORLANDO, Fla., Aug. 16 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc. (NYSE: AAI - News) today announced that it filed a shelf registration statement with the Securities and Exchange Commission (the "SEC") relating to future offers and sales by AirTran of up to $225,000,000 of its debt securities, preferred stock, common stock or warrants to purchase any of these securities.

Although AirTran does not have any commitments or immediate plans to sell securities under the registration statement, AirTran expects to use any proceeds it may receive from any sales by it for general corporate purposes, which may include the retirement of debt, additions to working capital, capital expenditures, acquisitions of other airlines or their assets, and other investments in strategic alliances, code-share agreements or other business arrangements.

The registration statement has been filed with the SEC, but has not yet become effective. The securities may not be sold, nor may offers be accepted, prior to the time that the registration statement becomes effective. This news release is neither an offer to sell nor the solicitation of any offer to buy any securities. In addition, there shall not be any sale of such securities in any state in which an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

AirTran Airways, one of America's largest low-fare airlines with 6,700 friendly, professional Crew Members, operates over 500 daily flights to 49 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways recently added the fuel-efficient Boeing 737-700 aircraft to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft. For reservations or more information, visit http://www.airtran.com (America Online Keyword: AirTran).

 

[Yank McCobb]

Strike warchest.

Or maybe to buy another carrier...say Alaska perhaps. Someone with a strong presence in the west to compliment their existing route structure.

That's about the best I can do for rumors on short notice.

 

[Phaedrus]

I'd say it's for general corporate purposes, which may include the retirement of debt, additions to working capital, capital expenditures, acquisitions of other airlines or their assets, and other investments in strategic alliances, code-share agreements or other business arrangements.
Just call me Karnac

 

[FL717]

Strike warchest.

Or maybe to buy another carrier...say Alaska perhaps. Someone with a strong presence in the west to compliment their existing route structure.

That's about the best I can do for rumors on short notice.

LOL!

I like your second idea... but if that were to happen, it would probably be the other way around... they would buy us.

Unfortunately the truth of the matter is that even with Alaska's recent wage "concession" (robbery is a better term).... their Pilots still make ALOT more money than us.

I think the money is for a asset purchase of someone or something..... (MidEx is the rumour that refuses to die and in fact has some actual fact to it).

We'll see.

 

[Yank McCobb]

Well, if in fact it has actual fact then you can't argue with that fact.

 

[I.P. Freley]

Maybe they're raising money to buy SkyWest?

 

[roughneck]

They are just trying to keep up with the Jones'. We filed something about a month ago for $995M. They are just trying to keep in step because they know we are usually about 3 steps ahead of them and they aren't sure whats up our sleeve. They are just laying the ground work to try and raise money if we hic-up and they find out what we are planning.

They would have gone for $995M, they just aren't worth enough to get that much.

 

[XRMEFLYER]

They are just trying to keep up with the Jones'. We filed something about a month ago for $995M. They are just trying to keep in step because they know we are usually about 3 steps ahead of them and they aren't sure whats up our sleeve. They are just laying the ground work to try and raise money if we hic-up and they find out what we are planning.

They would have gone for $995M, they just aren't worth enough to get that much.

Where's the LUV?

 

[SDF2BUF2MCO]

Well I did put down my salary requirements on the app. the other day but it wasn't quite that much.

 

[FlyingCricket]

I like your second idea... but if that were to happen, it would probably be the other way around... they would buy us.

Unfortunately the truth of the matter is that even with Alaska's recent wage "concession" (robbery is a better term).... their Pilots still make ALOT more money than us.

Alaska pilots do not make "ALOT" more than AirTran pilots anymore especially when you consider upgrade times. Alaska pilots are taking nearly a decade to upgrade to captain while AirTran pilots are doing it in just less than three years. Alaska new hires have recently been on reserve for 4.5 years while AirTran new hires are getting away with two or three months. Alaska's upgrade time will likely shorten as the rumored hiring there materializes but it will probably not get anywhere close to AirTran. In fact, in a rough straight-pay calculation, based on a 26-yr career at 85 hr's per month using hourly pay rates published on AirlinePilotCentral (not including per diem, retirement, or tax benefits), an AirTran pilot will have earned very slightly more (about $40K more) than an Alaska pilot. This comparison was done with an AirTran pilot upgrading at the end of three years and the Alaska pilot at the end of six years. Note that this also does not include the effects of the time value of money.

I have heard the Alaska rumors from quite a few sources at AirTran. However, no one at Alaska seems to even know what AirTran is ("some sort of regional?", they may ask as they scratch their head). The routes are almost perfectly complementary and the fleet types are very similar. Both airline's fleets are almost exactly the same size (right around 100). AirTran is going to 162 total aircraft and Alaska probably to about 125 or 130 total. Alaska has a lot more market cap and current assets, but AirTran has much more cash on hand. I really have no idea what kind of financial implications any of that has or how it may play out if the two companies were actually talking. If a merger between the two were successful, it would be a formidable company with a strong national presence. It could possibly challenge SWA. We all know, however, how well airline mergers in the past have generally gone.

 

[Reebo]

AirTran is saving for the DELTA xmas sale

 

[FL717]

Alaska pilots do not make "ALOT" more than AirTran pilots anymore especially when you consider upgrade times.

This comparison was done with an AirTran pilot upgrading at the end of three years and the Alaska pilot at the end of six years.

Alaska has a lot more market cap and current assets, but AirTran has much more cash on hand.

I will change my statement from "AlOT more money" to just "MORE money". With that admission... I have to respectfully disagree with your train of thought on how payrates should be calculated.

I do not believe that pay comparison should be calculated on hypothetical earnings and hypothetical growth, and hypothetical future upgrade....EVER..... unless you are an investor.... and I'm not....I'm a paid employee.

A person should be paid for EXACTLY the job that they hold at that time they hold it. I hear that hypothetical calculation mumbo jumbo alot at AirTran that the First Officer pay is justifiably low because "they will upgrade fast" and make more over the years. B.S. I'm not a speculator.

Okay... lets go ahead and move forward with that hypothetical theory.... now they upgrade at AirTran and if you compare a Captain payrate year for year at Alaska.... they are still very much below Alaska pilots payrates until about year 10.

Dollar for dollar...... seat for seat... guarantee for guarantee.... Alaska Pilots in fact earn more than AirTran Pilots...... period. And that is AFTER their pay concession.

I also have to disagree with your statement that AirTran has nore cash on hand. I believe that Alaska has double the cash on hand that AirTran has..... but I may be wrong about that and you may be correct. I don't have time to look this morning.

Finally.... remember that hypothetically you are absolutely CORRECT using your current career earning calculations theory....... I just don't believe Pilots should ever be paid hypothetically..... or justify low pay that way.

It sh!ts on the junior Pilots and could/can/does come crashing down when that growth stops or never materializes..... and now I'm stuck working for cr*p wages in a position that demands more compensation.

Cheers!

 

[FlyBoeingJets]

I do not believe that pay comparison should be calculated on hypothetical earnings and hypothetical growth, and hypothetical future upgrade....EVER..... unless you are an investor.... and I'm not....I'm a paid employee.

A person should be paid for EXACTLY the job that they hold at that time they hold it. I hear that hypothetical calculation mumbo jumbo alot at AirTran that the First Officer pay is justifiably low because "they will upgrade fast" and make more over the years. B.S. I'm not a speculator.

Lots of these young pilots are speculators with their careers. Some would say investors. Thinking like stock traders. I'm not saying that is wrong or right. just is.

 

[FlyingCricket]

I do not believe that pay comparison should be calculated on hypothetical earnings and hypothetical growth, and hypothetical future upgrade....EVER..... unless you are an investor.... and I'm not....I'm a paid employee.

I'll have to partially disagree with you. I think that you have to look at the future when evaluating which airline you should work for. Failure to assess what the future holds and factor that into your career decisions could prove to be a dangerous move. Like it or not, you are in many ways an investor in your chosen company. You are investing your time, effort, and very importantly, your seniority in the airline you choose to work for. Your fortune will ride largely with the fortune of your company. Limiting the scope of your airline analysis to a year-by-year comparison of pay scales is myopic if for no other reason than the pay scales are only good until the next contract (or until your airline enters bankruptcy proceedings).

Five years ago, the legacy carriers were where virtually every serious and respectable aspiring airline pilot wanted to go. Southwest and its low pay was looked upon by most with derision. Now, the castaways who took jobs at Southwest look like geniuses. Some of the guys who went to the legacies, in retrospect, look like they may have succumbed to lemming disease. It is notoriously difficult to analyze and predict the future, but you've got to try to do it. Another example, Alaska's new contract is good for two years. Will they strike in two years? Alaska's pay cut has seriously hurt morale and operational performance in the last three months. Will that continue? Will that begin to cut into profitability and the good reputation of Alaska Airlines? How will this effect your career if you are considering Alaska? Will that end up resulting in further concessions down the road? Southwest has incredible fuel hedges in place but sharply increasing labor costs. How will these two factors effect Southwest in the future? Will they ask for concessions in a couple of years or will the fuel hedges and the "love" drive even more pay raises? I say you have to try to analyze these risks. An airline career decision is not simply a straight comparison of pay scales. You definitely have to factor that in, but it's by no means the whole picture.

I completely agree with you, however, that AirTran's FO pay is unacceptably low. It is only acceptable in light of the relatively quick upgrade there. If growth stagnates, then you are stuck at regional-level wages for who knows how long. When looking at AirTran, I say you have to look at their growth plan and growth potential and analyze if it will actually materialize.

 

[TV9Driver]

AirTran FO pay is unacceptably low? I'm a first year FO at Airtran, and I'm on pace to make approximately $50K this year. Is that considered low? Ask a newhire Continental pilot, who is making $30K(?) first year if he thinks that is low.

 

[IAHERJ]

Then ask a Continental 2-4th year FO what he/she is making. I'm on 3rd year FO pay at AirTran and will probably, with perdiem make around 74K for 2005. At Continental I'd be holding widebody FO by year 3 and at min reserve pay I'd be making more than what I'm going to make flying my butt off at AirTran. I agree Continental's first year pay is insulting considering they really want people with 4 year degrees who have at least 5 years experience in the industry (pic 121/military) and start them off at 30K the first year. They then brag about being a fortune 100 best companies to work for airline. The pilots over there are not exactly happy with the current concessionary contract and I see them snapping the rates back in the next few years including some major work rule changes that they agreed to recently in order to help the airline.

 

[Nocturnal1]

Interesting how this thread went from the original posting to a discussion of pilot pay rates. We could discuss this for infinity but the reality is simple. Those of us that have a job are lucky. Remember that first solo flight, part of you was scared and part of you was screaming "I did it." We all know we'd like to get paid more, but the market will not bear it. This thread sounds like pro sports players whinning on ESPN. What other sector of the economy continues to bear the ridiculous cost of fuel and not raise prices? The airline industry is in a "war of attrition" a.k.a. WWI or Vietnam. It's a blood fest with only pain and misery for all. The only reason that newer airlines have prospered is to keep costs low...all costs including labor.

The federal government continues to support the corporate world rather than labor. Any threat of a strike by an airline is immediately met with citations of the Railway Labor Act. Airline management continues to be unwilling to negociate in good faith, instead, delaying while discrediting labor and starting hate mail campaigns to it's employees full of half truths. All the while paying outlandish million dollar bonuses to failing executives.

This is the wrong line of work for those aspiring to wealth. Instead, it's become a "JOB", show up - do your thing - and go home. Employee loyalty is a thing of the past. Management's ultimate oxymoron is to preach teamwork (doing more with less) while taking care of their own, simultaneously crapping on the employees. This clash is what keeps labor unions in business and inhibits "real teamwork" and loyalty. Don't play into it. Life isn't fair...it is what it is and what you make it. If you don't like it change it or shutup!

 

[JethroF15]

Actually I think they are raising cash to bail Ty Webb out of the flightinfo penalty box!

 

[gt1900]

Probably raising cash to buy Midwest....hehe...just starting chit! As far as cash in the bank...Alaska has about double what AAI has. I believe AAI has about 350 mil and Alaska has about 750 mil....Don't quote me though. I'm just a stupid airline pilot!!

 

[Beaver_Liquors]

On their 2Q confrence call i believe they mentioned something about this, is has to do with the fact the are going to be buying airplanes instead of leasing them next year, so i think it has something to do with cash needed for down payments. Not 100% sure though. i think they are planing on purchasing 14 of the 17 deliveries next year. Someone with more business skill could probably listen to the call and give more of an exact answer.

bl