ATA Bad News..

[350DRIVER]

Sorry if this has already been posted, looks like a long and bumpy ride ahead.. Best of luck to all of ATA.

Bad News - Press Release Coming Today



Many of you will find this very disturbing, but being very blunt is the only way to prepare each of you about the information we've received today, and which you will soon hear in the upcoming press releases.

ATA's financial performance is falling far short of what was projected. It is leaving ATA in a very critical situation with the SWA DIP financing contract.

As a result, the plans to increase IND flying have now changed. Due to the $49 fares that NWA is offering, ATA is unable to compete in a market that was already in the red prior to NWA stepping in. As a result the IND flying will be reduced to just 4 flights a day in April!

Chicago Express will be sold, with service ceasing the beginning of March.

MDW operations are also losing money.

On a positive note, our military flying will be increased over the early months of 2005, but this will not nearly balance out the losses in other markets.

We have heard of no changes that will affect our PH flying at this time.

The schedule for returning the 757s starting in the middle of the year, has now been moved up and 6 will be returned in the very near future.

Our survival now weighs heavily on further support from SWA, and further reductions to trim our overhead. For the month of January our projected losses will be showing up at around $14 Million.

We were told that 45 flight attendants will be furloughed, with their last day on Feb. 15th. Another 69 will be furloughed March 2nd. Typically we have an attrition rate of 15 flight attendants a month, so the actual number of furloughs may be less. Also voluntary requests for furloughs may also impact that number. Notices are being mailed to those who may be affected.

If you are interested in participating voluntarily in the furlough, please send your request to: [email protected], or call: 317-282-5223 and leave a message. Please be aware that you may only return to work through the recall process. Furlough status is a five year period. If you have not been recalled within that period, then you will be considered as separated from the Company.

The information we received was confirmed by the attorneys and financial advisors on a call with the Creditors' committee today.

I know this is frightening information for everyone. We've all waded through so many months of feeling like we were being kept in a fog, only to now find that the months have been wasted in bad decisions. The Creditors' Committee and the new CRO are also aware of this, and understand the urgency of a business plan that will produce a sensible structure to turn this mess around.

The MEC will be meeting with Management tomorrow afternoon. We will keep you updated as we learn more. Jacki Pritchett
ATA MEC President

 

[Wiskey Driver]

How can this be, weren't they all led to believe that SWA was their ultimate bailout?????

WD.

 

[Prog 2/2]

Best of luck to all my former PAE/Blue Meatball colleagues that found a home at ATA.

 

[Dizel8]

Sadly, based on this, it looks like it is over for ATA.
SWA will probably shut it down in an orderly fashion, hopefully all the ATA employees that wish, will be offered employment at LUV.

Wonder what bs we will see from Dick Daily

 

[TZFO]

Most of us would not trade our time here for anything. To work for ATA just two years and then getting furloughed is much better than never working here at all. How many 1st year pilots get typed in 757s and circle the globe right out of IOE? It's been a hoot. Now time for a normal airline job. No more Kuwait or Shannon or Budapest or Osaka layovers.
However, the Texas Two Step out of LUV flying blue and orange 737s sounds like something to check into.

 

[lowecur]

The ATSB holds the final card. If SWA can convince them that the airline is saveable, then the dance will continue. Hard to believe that this wasn't foreseeable from a SWA perspective. Hell, we are only a month in.

 

[tranceport]

uhm, no

The ATSB holds the final card. If SWA can convince them that the airline is saveable, then the dance will continue. Hard to believe that this wasn't foreseeable from a SWA perspective. Hell, we are only a month in.

I don't know what angle you are coming from but I beg to differ.

"Hard to believe this this wasn't foreseeable from SWA?" Uh, you don't really mean that , do you?

You don't think SWA had any previous bankruptcy buyout examples to reference? You don't think they knew ATA's cash position and burn through the lean months or the past few years? No conspiracies here, ATA did not have to sugar coat anything. They knew.

Their calculators were not on low battery....they know how much more they can give before they signed on the dotted line. Not trying to be crass (because this is a business after all, right?) but ATA knew they were barely able to make payroll in December and would have had to cut with an ax instead of a butter knife over the holidays.

You think SWA wanted employees or a different airplanes to muck up their perfectly greased business plan? They got what they really wanted and if it has to cost a little more, so be it. So long as the painful news didn't come out around the time the judgy wudgy / creditors were all in favor, then fine. I think everybody except the employees knew the score. (a little longer than we'd like to admit).

This is all PR. I honestly don't know why you are being so nice to them. Do you want to work for them or something?

 

[N1atEcon]

Apparently you must not be familiar with with LowerIQ's idiotic banter. He post that kind of flame bait just to get everyone's bloodpressure up.

 

[lowecur]

Look, I'm not mad at SWA. They did what they had to do, and that was pay lots of money for 6 gates at MDW in order to keep AAI from establishing a hub. The judge did what he had to do and that was award the deal to the highest bidder. The ATSB got more money, but now it remains to be seen whether they want to save the taxpayers their investment and close the airline down, or let ATA burn through the cash.

That said, is ATA still viable? Who knows at this point. If Military Charters are making money, will this be enough to offset the continued losses at MDW and the high cost of fuel? Time will tell, but at worst it bought the good folks at ATA some time to look elsewhere. In the end AAI may still get at least 8 gates at MDW and it won't cost them a nickel.

 

[Steeler Fan]

USA Today, page 5B (27 Jan 2005)...nice ad for the "New ATA Open for Business"


When I looked at the dots, I though I would have seen more lines coming out of Indy. I've said it before--I've jumpseated (in coach) on ATA numerous times and I think they have some really nice people over there. Being furloughed before, I feel badly for anyone who has to go thru it, and I hope something good comes of this for yuo guys at ATA.

 

[roughneck]

In the end AAI may still get at least 8 gates at MDW and it won't cost them a nickel.

Lowecur,
I thought you already gave those gates to JetBlue!

 

[Jim Smyth]

Actualy if I remember this correctly Lowecur said that Mayor Daley would never allow Southwest to get any more gates at Midway when Airtran was making there move! Also from what I have heard the other 8 gates you are refering too at Midway are secured by Southwests bridge loan to ATA in case they default on the payment.

 

[tranceport]

Apparently you must not be familiar with with LowerIQ's idiotic banter. He post that kind of flame bait just to get everyone's bloodpressure up.

thank you for the heads up. (not being sarcastic, just assumed he needed some 'hints' about the situation to set him straight).

Based on his response and complete lack of knowledge about the bankruptcy process, I'll have to admit you are right. maybe the ignore button is in order b/c I'm a gullible type.

Now that I come and think about it, Lowcur still owes me a weather forecast for our family picnic this coming May. Lowcur, what gives? You just like making predictions b/c of an insecurity or do you just like stirring the pot?

If you are a pot sitrrer, stay out of this one b/c in bad times like these, employees that are affected don't need to read this. I have many friends that fly there and it's bad enough mgmt. and unions are keeping info from them.

Lowcurr, do you fly for hire somewhere? If so, what seat?

 

[Jim Smyth]

Lowecur is supposedly in the insurance business and not a Pilot. However IMO the jury is still out on that one! Why would someone come here day after day posting aviation information if they dont fly. Only other reason I see is he has a vested interest in some of the Airlines. So Lowecur, own any US air stock? ;-)

 

[FlyChicaga]

No, he owns Embraer stock. Which is why he pimps the EMB-190 like a $2 hooker.

 

[lowecur]

Based on his response and complete lack of knowledge about the bankruptcy process Care to elaborate?

Now that I come and think about it, Lowcur still owes me a weather forecast for our family picnic this coming May. Lowcur, what gives? You just like making predictions b/c of an insecurity or do you just like stirring the pot? I'm an amateur analcyst, you figure it out.

If you are a pot sitrrer, stay out of this one b/c in bad times like these, employees that are affected don't need to read this. I have many friends that fly there and it's bad enough mgmt. and unions are keeping info from them.

Lowcurr, do you fly for hire somewhere? No. If so, what seat? By the seat of my pants, I'm a semi-retired insurance agent

.....

 

[lowecur]

Actualy if I remember this correctly Lowecur said that Mayor Daley would never allow Southwest to get any more gates at Midway when Airtran was making there move! Also from what I have heard the other 8 gates you are refering too at Midway are secured by Southwests bridge loan to ATA in case they default on the payment.

Lots still up in the air there, Jimmy.

$40M for the hanger and 6 gates, $47M for the secured DIP loan(includes the Chicago Guaranty of $7M), $30M security purchase when reorganization plan filed and accepted by the judge, and $47M in exit financing if they exit by 9/05.

Has the hanger closed yet? It was supposed to by 1/12/05. Has the city council given their final approval on the gates? Not to my knowledge. Do you think ATA has tapped the DIP loan yet? I doubt it, and they won't owe anything until they do. Do you think maybe the ATSB might be looking at what is happening? Do you think maybe they have the authority to demand immediate payment of the loan, thus usurping the judges authority. Stay tuned, there is still much to play out.

 

[Delville]

Originally posted back in Dec regarding the SWA/ATA/AAI deal at MDW:

Dooooooood, what have you been smoking? I think you're failing to understand the difference between marketing and reality in this situation. All of the talk about "assisting" ATA was simply so SWA could sell the bid to the concerned parties, esp the city of Chicago. SWA, especially with Gary Kelly at the helm, is not interested in benevolently aiding competitors. No airline is. Why isn't SWA donating money right now to Delta, United, or USAir to "help them get back on their feet"? This deal was plain and simply about fending off AirTran. Duh. ATA was merely a pawn in the deal. Once the deal is closed, SWA would be even better off if ATA folded up shop.

You seem to be the one smoking something Duuuuuuuuuuuuuuuuuude!................For ATA its a no brainer. They can continue to operate although at a smaller size rather than have no light at the end of the AirTran rainbow. Code share with our company which now has 2800+ flights per day in the US and allows us both to make a small fortune together. They have the chance to recover in some form rather than to have nothing and shrink into a small charter operation back in INDY preserving more jobs in the long run. SWA has always had a great rapport with ATA. Most people outside of the two companies dont understand this at all. They were the first ones our company agreed to give multiple jump seats to and they gave them to us. This is just a small example but you get the drift. I think in time we will see some more very substantial agreements between to 2 of us that will surprise everyone. Time will tell. But hey what do I know? But I did stay in a Holiday Inn Express last nite! ;-)

Southwest is not the least bit interested in ATA success, neither was AirTran. Southwest plan is clear. Be the hero and claim to save ATA with loans, and when that money is gone simply state that you tried to help ATA but had to shut it down because the economy, oil prices, and labor costs are the real culprit. So in about 18-24 months they take the rest of the gates in mdw because ATA still owes the original loan.

Looks like ATA is falling apart faster than probably even Gary Kelly had planned. As far as Jim Smyth's predictive abilities are concerned, maybe he should consider NOT staying in a Holiday Inn Express.

 

[canyonblue]

Well everything is not always as it seems. Possibly, ATA is in worse shape than what was led on. This happened in the Midway-NWA deal that fell apart.

 

[TriStar_drvr]

The decision to substantially reduce the size of operations in Indianapolis may be the smartest move ATA management has made yet. Indy was a losing market, made even more so by NWA's massive expansion into it. I believe that ATA kept a large presence in Indy because of an emotional attachment to the city. As we all know, business decisions based on emotions are typically bad ones.

Perhaps it finally took the arrival of some management without the emotional attachment to Indy to show ATA the folly of their money losing operations there. Hopefully, without the albatross of Indy hanging around, ATA may be able to focus on the parts of the operation that MAY be able to save the company; namely the code-share flights with SWA, the Hawaii and other vacation charters, and the military charter.

Or, I could very likely be all wrong and this latest announcement could be the beginning of the death throes of ATA. It would be shame because it's been a heck of ride for the nearly six years I've been part of this company.