ATA Files for Chapter 11 Reorganization

[Heavy Set]

This provides AirTran with much needed diversification of flying (can't be too reliant upon Atlanta). Why build when you can just buy an existing hub with existing infrastructure? MDW is centrally located in a huge metropolis and this will enable AirTran to compete directly with AA, UAL and NWA in the Midwest. I think it is a brilliant move because AirTran can use its ATL operation to partially subsidize its MDW operation (ATA couldn't do that given that MDW was its only hub).

I suspect that AirTran will try to avoid SWA as much as possible. It will probably assume most (if not all) of ATA's routes out of MDW including DCA, LGA, MSP, DFW, DTW, CLT and BOS. Many of those routes are not served by SWA yet... I am sure there will be some overlap on key routes like LAS, MCO, TPA, FLL, etc. Should be interesting to watch.

In the end, AirTran does not want to be dependent upon ATL - this is a great opportunity to buy a ready-made hub in a great metropolitan location... If I were an ATA 737-800 pilot, I'd send my resume to AirTran quickly (plenty of 700s on the way)...

 

[Fly-By-Cable]

It will be interesting to listen to tomorrow's webcast. I'm sure AirTran will get hammered with questions. (Oct 27 at 10 AM) Audio Archives

http://www.airtran.com/aboutus/investor/index.jsp

 

[TZFO]

Come on SWA, show a little luv, BUY US!
Save us from the vultures.

 

[FLYNAKD]

Thanks to everyone who has said something positive about ATA. Aside from the fact that I may very well lose my job (the best one I ever had) in the near future along with a lot of good people, the worst part of this whole thing is the lost potential of a great airline. I hope something positive comes out of this. It's gonna get interesting!

 

[ForgedBlade]

This has been a great place to work and hopefully will continue to be. We are all keeping our fingers crossed. The flying here has been fantastic and the wealth of experience here is amazing. What a great group of people to work with, I wouldn't have traded this for anything! It's going to be an interesting ride!

 

[Guppiedriver]

Tuesday, October 26, 2004

Dear Fellow Employees,

Recent media speculation has centered on America West and our potential interest in ATA Holdings Corp. Today, ATA announced it has filed Chapter 11, and while we haven’t reviewed their filing in great detail, we are now able to publicly discuss our interest in ATA. Because we will be confirming publicly that we have an interest in ATA, we wanted to communicate that point directly with our employees so that you hear it from the company first. Although we remain interested in exploring ways in which we might purchase ATA’s assets through the Chapter 11 process, we are non-committal at this point.

Our interest in ATA stems from our belief that a combined America West/ATA could create a stronger, more formidable low-cost carrier. Given what we know of ATA’s current situation, we also believe a potential America West proposal may ultimately be more desirable and have a more positive outcome for ATA’s creditors and employees than other offers they may receive. We will continue to explore our options and potentially propose our own offer through the bankruptcy process at the appropriate time, but it is critical employees understand, we will not present a plan that jeopardizes the future of America West and our employees, customers or shareholders. We have all worked too hard in transforming our airline into a successful low-cost carrier and we won’t pursue opportunities that might undo that progress.

With ATA’s Chapter 11 filing, any final agreement or transaction will be subject to a number of approvals, including the Airline Transportation Stabilization Board (ATSB), various creditor committees, and ultimately, the bankruptcy court. Over the next several weeks and months we anticipate other interested parties may come forward through the court process and we will continue to update you as we determine the best course for America West. Employees should use the following channels to stay informed of our progress:

Third Quarter State of the Airline Webcast, Wednesday, Oct. 27 at the Flight Center (click here for details on how to attend, listen live via the Internet or to listen to the replay, which will be up through Nov. 27),
AWA Employee Information Hotline (480/693-4487 or 888/292-5087),
www.awaCompass.com, the America West password-protected intranet for employees.

This is a tumultuous time for our industry. While growth is important for our future, we will only pursue opportunities that are ultimately positive for America West. Thanks to all of you, we have succeeded when others thought we would fail. We still have a lot of work ahead of us to become the nation’s premier low-cost carrier, and I thank you for the great work you do each day to help us achieve that goal.

Doug

 

[Cactus73]

NY times is coming out with an article on Wednesday saying that the AAI deal is far from a done deal.

AWA announced its plans to bid against AAI and other airlines have also expressed interest.

This seems like a big poker game. AAI just laid their cards on the table for all to see. There is nothing in the deal for the creditors or employees. This is not going to be popular with the court.

Judging from Parker's above letter, this thing may get very heated in the coming weeks.

 

[reepicheep]

I would like to hear from some Cactus pilots on this issue.

I am interviewing with them next week and I must say, if this merger or asset purchase comes to pass I may have to re-evaluate my enthusiasm for America West. Nothing against the ATA pilots, but mergers are death. I've got to believe that money could be better spent paying down debt or bolstering the balance sheet in some way. Didn't they learn anything from the abortive CMH excersize?
Any thoughts?

 

[Cactus73]

I would like to hear from some Cactus pilots on this issue.

I am interviewing with them next week and I must say, if this merger or asset purchase comes to pass I may have to re-evaluate my enthusiasm for America West. Nothing against the ATA pilots, but mergers are death. I've got to believe that money could be better spent paying down debt or bolstering the balance sheet in some way. Didn't they learn anything from the abortive CMH excersize?
Any thoughts?

I have to agree mergers are a mess. This whole thing scares the crap out of me. Money could definitely be better spent paying down debt or bettering the balance sheet. The problem is we don't have the cash to do this. We just lost $40+ million and will lose more by the end of the year. This will deplete our cash reserves even more. Not good.

That being said, we (AWA) have to plan long term and can't think only three months down the line. In the past few years, LCC's have gone out and placed substantial new aircraft orders. Currently, AWA is larger than jetBlue and Air Tran combined. This will not be true in another year or two. So what does AWA do? Do we sit back and get run over by these media darlings or do we take action to secure our turf and find some new turf before it's taken by our comptetitors? Our CEO Doug Parker seems to think that we need to protect our turf.
Since we have an order for 22 Airbus and are gate limited in PHX and LAS, we have to find some new turf. AWA has always wanted to go East. CMH was a failure. But MDW should not be compared to CMH. Chicago is quite a bit larger than CMH. ATA would enable us to go East and get ETOPS for new routes to HNL and South America.
The problem is that mergers are messy and expensive. ATA would be no exception. But I think Parker feels that the short term cost is worth the long term gain.

If you lose your enthusiasm for America West because of this I'm not sure what to say. We still have some of the lowest costs in the business. Have two hubs in the fastest growing U.S. cities. But I do understand your merger concerns because they concern me too. Come to the interview and ask them questions. Not sure where you currently work or what your options are, but I would bet AWA is a better place.

Hope my ramblimg thoughts here helped!

 

[reepicheep]

Thanks for the info....I currently work for US Airways so of course America West is still a better option. Just remember though, east is least; west is best.