ATA faces trouble on bailout loan

[lowecur]

This could be a difficult hurdle as ATSB could shut the airline down. UAIR renegotiated, but had to come up with Cash to do so. ATA doesn't have the dough, so it will be interesting to see what the ATSB does.

http://www.indystar.com/articles/5/162405-1805-092.html

 

[General Lee]

I thought ATA was doing well again?


Bye Bye--General Lee

 

[InclusiveScope]

I thought ATA was doing well again?


Bye Bye--General Lee

I rest my case!

General, the article says:

"They have very low costs but they have to get their revenues up,"

Should they use larger planes General? This is a Revenue problem.

 

[lowecur]

I thought ATA was doing well again?


Bye Bye--General Lee

Unfortunately, they are not doing well. I'm sure most of the employees are holding their breath.

I feel bad for the employees, but the FAA needs to reduce congestion in the sky's, and they are not getting much help at ORD from UAL or AMR. The ATSB may be getting an earful from the FAA, and could request immediate full payment of the loan, effectively shutting down ATA.

BA may still lease them the 717's at a decent rate, but if their future doesn't look bright, even that could be pulled from the table. Hard to see them getting their RASM up in this cut-throat environment.

 

[On Your Six]

I rest my case!

How is that a good response? Some people are complete jacka$$es on this board.... Very clever.

I thought ATA was reorganizing itself too given the frequent positive comments on this board. Didn't realize the situation was this dire... Good luck to all involved.

 

[InclusiveScope]

How is that a good response? Some people are complete jacka$$es on this board.... Very clever.

I thought ATA was reorganizing itself too given the frequent positive comments on this board. Didn't realize the situation was this dire... Good luck to all involved.

Because you and General are wrong again. Sorry but the truth hurts. Using the General's logic, they should use larger airplanes.

"They have very low costs but they have to get their revenues up,"


"They have very low costs but they have to get their revenues up,"

Simply put, there are too many seats chasing too few customers. Supply and demand folks.

 

[General Lee]

on your six,

Inclusivescope is trying to throw things at me---primarily because I smack him on every other subject. He tries hard....

The apparent problem at ATA is they are up against a very strong LCC (SW) at their main hub, and the advantage they once had serving all of the larger cities nonstop (SEA, PHX, LAX, LAS, MCO, FLL, etc) is gone since SW added more 737-700s that now can reach them. That put ATA at an economic disadvantage on every route that they both flew. There is little room to expand at MDW, and IND is not an established hub. They said they might expand into the INTL arena next year--which might be a better idea due to the lack of LCCs flying transatlantic routes...


Inclusivescope,

If you are going to "move" people domestically with all of the low fares--you need larger planes to spread out the costs. If you have a route that cannot support those larger planes, then put something else on it. Just think, the difference between a 767-300 and a 738 is close to 100 seats---or an extra two flight attendants. You will have to pay for a couple more stews, but you can make up the crew costs with a few extra passengers, and you can carry more cargo---that will probably make up for the extra gas. You will learn eventually, my son.


Bye Bye--General Lee

 

[Dizel8]

General,

But then all domestic travel should be on 747 or the A-380, obviously it is not. The right size airplane for the route and frequency plays a larger role, other wise, why would DAL operate so many different types? Why use RJs?

Flying short haul with a 747 is prohibitively expensive and the only place I know that have been doing it, is Japan, due to the sheer amount of people and limited space.

Yes, I do believe ATA is facing increased pressure from SWA, but they are facing increased pressure in general, as we all are, because fare levels are so low. In Chicago, to get the lowest fare one either flew ATA or SWA, now Ted is out of ORD, along with the fact, that cheap airfares can now be had on all airlines.

 

[Pickle]

Lowecur, ATA only carries something like 2 or 3 percent of the total traffic in the US, the FAA won't press the ATSB to make ATA go away to releive congestion in Chicago. That has to be one of the more ridiculous things I have heard.


General Lee: on every route we fly head to head against SWA out of MDW we have a fare premium (that is to say, we command a higher price per seat than they do) except for MCO, where they have a higher fare premium. That was as of earlier this year.

 

[lowecur]

Lowecur, ATA only carries something like 2 or 3 percent of the total traffic in the US, the FAA won't press the ATSB to make ATA go away to releive congestion in Chicago. That has to be one of the more ridiculous things I have heard. OK. Let me phrase it another way. Do you think by forcing ATA out of business it would allow some of the carriers that use ORD to transplant some flights to MDW? Or maybe no one wants to use MDW as it is mostly O&D.


General Lee: on every route we fly head to head against SWA out of MDW we have a fare premium (that is to say, we command a higher price per seat than they do) except for MCO, where they have a higher fare premium. That was as of earlier this year.

.....

 

[General Lee]

Dizel8,


I get your point, and I don't think there should be A380s on every mainline route. But, look at Indy Air and their new problems---they aren't producing enough revenue with their 50 seat jets---you can't use 50 and 70 seat jets against larger mainline type aircraft when the low fares are abound. I know the low fares are hurting all of us---but the ability to fill those seats is key if you want any chance to try to squeeze a profit--and the more seats you have--the better chance to spread out the costs. Maybe the A380 would be good for some routes--but not every route.

Bye Bye---General Lee

 

[apdsm]

but the FAA needs to reduce congestion in the sky's, and they are not getting much help at ORD from UAL or AMR. The ATSB may be getting an earful from the FAA, and could request immediate full payment of the loan, effectively shutting down ATA.

I love your posts. They are very entertaining...

 

[lowecur]

I love your posts. They are very entertaining...Stop taking my colors. I'll bet Rosanne would look good to you after a few beers. Have another and go to work for AWA.

.....

 

[ATA737CAPT]

.....

Why does anyone even respond to this lowecur idiot anyway? He/She obviously has no clue, why even waste the time to try to educate such a waste of life?

 

[AA717driver]

ATA is in trouble because they leased aircraft at a high rate and could only negotiate it down slightly. Bad timing. They renegotiated the debt but not enough.

I hope they will come out of this ok.TC

 

[balls deep340]

General get a clue

Another reason for ATA problem is trying to break into the trans-con routes. This was a major blunder and also hurt their connecting flights. You can read more about it on the web.


The more I read the Generals post the more I must agree with inclusivescope. General take some business classes please. You have the logic of a Souther belle with a 8th grade education.

 

[apdsm]

Stop taking my colors. I'll bet Rosanne would look good to you after a few beers. Have another and go to work for AWA.

I like using your colors. It also entertains me while reading your posts...

 

[lowecur]

Why does anyone even respond to this lowecur idiot anyway? He/She obviously has no clue, why even waste the time to try to educate such a waste of life? I guess my people should not call your people about doing lunch?

.....

 

[General Lee]

Didn't we go to different high schools together?

Bye Bye--General Lee

 

[CWI]

Take a look at Wall Street and the price of ATA stock!

Not too long ago it was over $13 and now it's down to about $3.50!

I wonder what they know and we don't?

 

[Carl_Everett]

Dizel8,


I get your point, and I don't think there should be A380s on every mainline route. But, look at Indy Air and their new problems---they aren't producing enough revenue with their 50 seat jets---you can't use 50 and 70 seat jets against larger mainline type aircraft when the low fares are abound. I know the low fares are hurting all of us---but the ability to fill those seats is key if you want any chance to try to squeeze a profit--and the more seats you have--the better chance to spread out the costs. Maybe the A380 would be good for some routes--but not every route.

Bye Bye---General Lee

General,

Could you please tell me where you are getting your information on Independece Air's revenue situation? They have not been flying for a full month yet, don't have the full route structure, and have not released any revenue information. Unless you have some inside information, I have to assume that you are pulling your ideas about large aircraft out of your arse.

 

[storminpilot]

http://biz.yahoo.com/e/040715/atah8-k.html


Form 8-K for ATA HOLDINGS CORP


15-Jul-2004

Other Events

ITEM 5. OTHER EVENTS ATA Holdings Corp. has announced that it does not expect to earn a profit in 2004. This updated guidance is a result of rising jet fuel costs and weakrevenues caused by aggressive pricing in the industry. ATA Holdings Corp. isimplementing cost-cutting measures to reduce the expected 2004 loss.

 

[FlyBoeingJets]

Someone correct me if I'm wrong, please, but aren't debt payments excluded from CASM calculations? Is it easy to look at the quarterly report to figure out how much debt servicing adds to CASM to get a more realistic look at costs?

With high debt at ATA, AA, and UAL (DAL?) costs have to be much lower just to match the costs at Southwest, JetBlue and Airtran. With the Great Fare War finally here I now see what some of us have been predicting. The beginning of the end for a big carrier and, now, maybe even another little one.

But Pan Am stayed alive on life support for years so the end may not be as near as it seems. Look for the sale of profitable routes or airplanes

 

[InclusiveScope]

http://biz.yahoo.com/e/040715/atah8-k.html


Form 8-K for ATA HOLDINGS CORP


15-Jul-2004

Other Events

ITEM 5. OTHER EVENTS ATA Holdings Corp. has announced that it does not expect to earn a profit in 2004. This updated guidance is a result of rising jet fuel costs and weakrevenues caused by aggressive pricing in the industry. ATA Holdings Corp. isimplementing cost-cutting measures to reduce the expected 2004 loss.

Well the solution is simple. ATA needs to fly larger airplanes so they can get their CASM down. Right General?

 

[Dizel8]

179 seats on the B-737, 200 on the 757-200 and 247 on the 300, that is according to their website.

 

[jjbiv]

175 pax on the 737-800 :-D

 

[On Your Six]

General,

Could you please tell me where you are getting your information on Independece Air's revenue situation? They have not been flying for a full month yet, don't have the full route structure, and have not released any revenue information. Unless you have some inside information, I have to assume that you are pulling your ideas about large aircraft out of your arse.

Hey Carl,

Chill out. I think GL is referring to the following article from Aviation Daily. Sure, it's cursory research, but the article makes some good points.


Source: Aviation Daily)
A cursory, unscientific analysis of Independence Air's loads by one investment firm on the Newark-Washington Dulles route suggests the airline has to boost its passenger numbers significantly to reach its breakeven load factors.

Merrill Lynch analyst Michael Linenberg noted in a research report that Merrill employees recently spent a day at Newark to track development of the new service. Independence offers 16 daily flights with 50-seat CRJ-200s from 6:30 a.m. to 9:30 p.m.

The investment firm figured that load factors to Dulles averaged 26.5%, and loads inbound from Dulles ran about 38.5%. "Granted, one day of data does not a trend make," Linenberg said. "It is our estimation that Independence will need to achieve a load factor in excess of 70% to break even. We are nonetheless concerned that the planes are not even half full, given the time of year."

Linenberg allowed that it takes time to build a brand, but Independence's planned 300 departures also warrant significant investment. "We estimate ACAI [Independence Air] will be running its cash levels down by more than 50% over the next six to nine months," he said. Merrill has assigned a sell rating to the carrier's stock.

On the operations side, Independence canceled one flight the day Linenberg was observing the operations. Air traffic control caused delays of four flights. He noted the remaining 12 were on time, with some arriving several minutes early.

Independence started flights June 16, and its year-over-year traffic stats for June fell in every category. Revenue passenger miles were down 24.5%, load factor 1.6 percentage points and block hours 23.1%. "If loads remain depressed into the fall, Independence may have to consider scaling back the scope of its operation," Linenberg said.

Meanwhile, a Maryland-based travel risk management company filed a trademark infringement complaint against Independence for referring to its CRJs as "iJets." The travel company, iJET, filed the complaint in the U.S. District Court for the Eastern District of Virginia. "Litigation was the only recourse that we had to protect our brand from the media blitz being carried out by Independence Air and their very targeted use of our registered trademark," iJET said.