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ATA Files for Chapter 11 Reorganization
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beech1900kid
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ATA files for Ch. 11 bankruptcy
Airline reports $940 million in deb
By Matt Andrejczak, CBS.MarketWatch.com
Last Update: 5:31 PM ET Oct. 26, 2004
SAN FRANCISCO (CBS.MW) -- ATA Holdings Corp., parent of ATA Airlines, filed for Chapter 11 bankruptcy protection late Tuesday
The low-fare carrier listed its total assets at $745.1 million and its debt at $940.5 million, according to its filing in the U.S. Bankruptcy Court for the Southern District of Indiana.
Ahead of the filing, shares of Indianapolis, Ind.-based ATA tumbled 36 percent to 93 cents. The stock was halted in after-hours trading
ATA, the nation's 10th largest airline, joins US Airways Group and United Airlines parent UAL Corp. in Chapter 11 bankruptcy. Delta Air Lines has threatened to file for bankruptcy if cannot drastically cut operating costs. New low-fare carrier Independence Air might also run into difficulties early next year, analysts say.
Late Monday ATA appointed Gilbert Viets chief restructuring officer, while David Wing returned as chief financial officer after leaving the company in June. For the six months ended June 30, ATA (ATAH: news, chart, profile) posted a loss of $90 million, or $7.38 a share. The airline has been stung by fuel costs, lower U.S. ticket prices resulting from competition, and weaker revenue from its military/charter business.
ATA last week said its financial condition has worsened since it first warned of its precarious state in mid-August. It also announced plans to cut 220 jobs, or 3 percent of its work force.
It's unlikely the airline will have sufficient funds to meet cash obligations in the first quarter of 2005, according to its quarterly filing with the Securities and Exchange Commission.
AIRLINENUT.COM
Airline reports $940 million in deb
By Matt Andrejczak, CBS.MarketWatch.com
Last Update: 5:31 PM ET Oct. 26, 2004
SAN FRANCISCO (CBS.MW) -- ATA Holdings Corp., parent of ATA Airlines, filed for Chapter 11 bankruptcy protection late Tuesday
The low-fare carrier listed its total assets at $745.1 million and its debt at $940.5 million, according to its filing in the U.S. Bankruptcy Court for the Southern District of Indiana.
Ahead of the filing, shares of Indianapolis, Ind.-based ATA tumbled 36 percent to 93 cents. The stock was halted in after-hours trading
ATA, the nation's 10th largest airline, joins US Airways Group and United Airlines parent UAL Corp. in Chapter 11 bankruptcy. Delta Air Lines has threatened to file for bankruptcy if cannot drastically cut operating costs. New low-fare carrier Independence Air might also run into difficulties early next year, analysts say.
Late Monday ATA appointed Gilbert Viets chief restructuring officer, while David Wing returned as chief financial officer after leaving the company in June. For the six months ended June 30, ATA (ATAH: news, chart, profile) posted a loss of $90 million, or $7.38 a share. The airline has been stung by fuel costs, lower U.S. ticket prices resulting from competition, and weaker revenue from its military/charter business.
ATA last week said its financial condition has worsened since it first warned of its precarious state in mid-August. It also announced plans to cut 220 jobs, or 3 percent of its work force.
It's unlikely the airline will have sufficient funds to meet cash obligations in the first quarter of 2005, according to its quarterly filing with the Securities and Exchange Commission.
AIRLINENUT.COM
Race Pilot
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ATA Holdings Corp. Files for Chapter 11 Reorganization
Tuesday October 26, 6:06 pm ET * Maintains flight schedule, operations, customer service and travel rewards programs * Enters agreement with AirTran Airways, Inc. to operate and acquire routes at Chicago Midway, Ronald Reagan Washington National and LaGuardia Airports * Indianapolis to remain ATA's headquarters and primary hub * ATSB allows use of cash collateral in advance of securing debtor-in- possession (DIP) financing
INDIANAPOLIS, Oct. 26 /PRNewswire-FirstCall/ -- ATA Holdings Corp., (Nasdaq: ATAH - News), the nation's 10th largest passenger carrier, today announced that it and certain subsidiaries, including ATA Airlines, Inc., have filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Indiana. <LI>(Logo: http://www.newscom.com/cgi-bin/prnh/20030929/ATAHLOGO-b )
ATA emphasized that it continues business as usual. The airline stands by its customer commitments, honoring tickets, upholding its full flight schedule, in-flight services and frequent flyer reward programs.
With this move, ATA will develop a plan of reorganization to address its debt levels and other obligations, and to lower its cost structure even further, while operating in the normal course of business. The reorganization will allow the airline to restore and strengthen its competitiveness as a leading low cost carrier in the challenging industry environment, and to advance existing initiatives to improve its services, such as retrofitting planes for business class service.
"Excess capacity, extremely high fuel prices, which continue to escalate, and declining fares have necessitated that all airlines, including ATA, re- examine their business," said ATA Holdings' Chairman, President and Chief Executive Officer George Mikelsons. "As we transform, we maintain our focus on serving customers, while flying one of the youngest, most fuel-efficient fleets among the major carriers. ATA will continue to provide value-based everyday, low fares and service that makes the travel experience easier and more affordable for all our business and leisure travelers."
Agreement with AirTran Airways, Inc.
ATA reported that, in conjunction with the filing, the airline has reached an agreement with AirTran Airways, Inc. (NYSE: AAI - News) in which AirTran will pay ATA $87.6 million to assume ATA's flight operations, gates lease, and routes in Chicago Midway Airport, as well as arrival and departure slots at LaGuardia Airport and Ronald Reagan Washington National Airport. The agreement, which is subject to approval by the City of Chicago and the Bankruptcy Court, will take effect later this year or early next year, and is to be finalized over the next several days.
ATA is in continuing discussions with potential third-party lenders to procure Debtor-In-Possession (DIP) financing. Meanwhile, the Air Transportation Stabilization Board (ATSB) has agreed to allow ATA's continued use of its cash collateral, which, combined with the Company's projected cash flow from operations, should be sufficient to fund the needs of ATA and its operating subsidiaries until the Company reaches an agreement for DIP financing.
"Our arrangement with AirTran will grow the travel options we offer customers, and is a key component of our transformation into a refocused, streamlined and profitable airline," continued Mikelsons. "We remain committed to serving Midway customers during this transition, while also having the significant support of one of the strongest low cost carriers."
AirTran and ATA intend to establish co-marketing programs and code share agreements for flights operating into and out of Chicago Midway. There is a transition plan in place for AirTran to outsource to ATA servicing of Chicago flights over a specified period. The transition arrangements with AirTran will allow ATA a gradual, measured exit from Chicago, as well as provide ATA time and flexibility to develop and execute its reorganization plan.
ATA passengers holding existing reservations for flights to and from Chicago Midway will be serviced seamlessly under their originally issued tickets, without the need for rebooking. Participants in ATA and AirTran frequent flyer programs will accrue and redeem miles on both airlines' networks.
Reorganizing to Emerge a Stronger Airline
Mikelsons also broadly outlined the key points of ATA's reorganization plan, which entails optimizing its fleet and plane sizes and focusing on the most profitable cornerstones of its business: commercial flights routed through its Indianapolis hub, flights to Hawaii, as well as military and some commercial charter service. ATA will continue to operate its Chicago Express connection service through Chicago Midway, as well as its Ambassadair Travel Club.
ATA also stressed its continued commitment to Indianapolis, which will remain the Company's headquarters and primary hub. Mikelsons continued, "Indianapolis has been a key source of our growth, and we will remain in the city we have called home since 1973."
To further ensure ATA's smooth operation, the Company has filed various first-day motions with the Bankruptcy Court that would allow it to, among other operations, continue timely payments to fuel vendors, employees and other service providers, as well as to assume clearinghouse and interline contracts.
Mikelsons added, "We have begun taking the difficult steps to transform ATA into an airline that is positioned to meet the needs of our customers today and for the future. Our agreements with AirTran, combined with ATSB's flexibility, will facilitate ATA's transformation into a formidable low-fare competitor, capable of winning in today's airline industry environment for our customers, employees, creditors, and other stakeholders."
ATA has faced significant financial and operational challenges stemming from the slowdown of the economy, the tragic events of September 11, 2001, pricing pressure, major increases in fuel costs, which have not yet abated, and losses of revenue and bookings in its important Florida market due to four hurricanes this summer. Changes in consumer behavior, particularly the reduction in business travel and the changes in business travel patterns, have led to a significant drop in revenues due, in part, to ATA's large aircraft. ATA determined that the Chapter 11 process offered the Company the most viable way to restructure its operations and finances to remain competitive.
About ATA Airlines
Now in its 31st year of operation, ATA (Nasdaq: ATAH - News) is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel- efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. For more information, visit the web site http://www.ata.com .
Tuesday October 26, 6:06 pm ET * Maintains flight schedule, operations, customer service and travel rewards programs * Enters agreement with AirTran Airways, Inc. to operate and acquire routes at Chicago Midway, Ronald Reagan Washington National and LaGuardia Airports * Indianapolis to remain ATA's headquarters and primary hub * ATSB allows use of cash collateral in advance of securing debtor-in- possession (DIP) financing
INDIANAPOLIS, Oct. 26 /PRNewswire-FirstCall/ -- ATA Holdings Corp., (Nasdaq: ATAH - News), the nation's 10th largest passenger carrier, today announced that it and certain subsidiaries, including ATA Airlines, Inc., have filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Indiana. <LI>(Logo: http://www.newscom.com/cgi-bin/prnh/20030929/ATAHLOGO-b )
ATA emphasized that it continues business as usual. The airline stands by its customer commitments, honoring tickets, upholding its full flight schedule, in-flight services and frequent flyer reward programs.
With this move, ATA will develop a plan of reorganization to address its debt levels and other obligations, and to lower its cost structure even further, while operating in the normal course of business. The reorganization will allow the airline to restore and strengthen its competitiveness as a leading low cost carrier in the challenging industry environment, and to advance existing initiatives to improve its services, such as retrofitting planes for business class service.
"Excess capacity, extremely high fuel prices, which continue to escalate, and declining fares have necessitated that all airlines, including ATA, re- examine their business," said ATA Holdings' Chairman, President and Chief Executive Officer George Mikelsons. "As we transform, we maintain our focus on serving customers, while flying one of the youngest, most fuel-efficient fleets among the major carriers. ATA will continue to provide value-based everyday, low fares and service that makes the travel experience easier and more affordable for all our business and leisure travelers."
Agreement with AirTran Airways, Inc.
ATA reported that, in conjunction with the filing, the airline has reached an agreement with AirTran Airways, Inc. (NYSE: AAI - News) in which AirTran will pay ATA $87.6 million to assume ATA's flight operations, gates lease, and routes in Chicago Midway Airport, as well as arrival and departure slots at LaGuardia Airport and Ronald Reagan Washington National Airport. The agreement, which is subject to approval by the City of Chicago and the Bankruptcy Court, will take effect later this year or early next year, and is to be finalized over the next several days.
ATA is in continuing discussions with potential third-party lenders to procure Debtor-In-Possession (DIP) financing. Meanwhile, the Air Transportation Stabilization Board (ATSB) has agreed to allow ATA's continued use of its cash collateral, which, combined with the Company's projected cash flow from operations, should be sufficient to fund the needs of ATA and its operating subsidiaries until the Company reaches an agreement for DIP financing.
"Our arrangement with AirTran will grow the travel options we offer customers, and is a key component of our transformation into a refocused, streamlined and profitable airline," continued Mikelsons. "We remain committed to serving Midway customers during this transition, while also having the significant support of one of the strongest low cost carriers."
AirTran and ATA intend to establish co-marketing programs and code share agreements for flights operating into and out of Chicago Midway. There is a transition plan in place for AirTran to outsource to ATA servicing of Chicago flights over a specified period. The transition arrangements with AirTran will allow ATA a gradual, measured exit from Chicago, as well as provide ATA time and flexibility to develop and execute its reorganization plan.
ATA passengers holding existing reservations for flights to and from Chicago Midway will be serviced seamlessly under their originally issued tickets, without the need for rebooking. Participants in ATA and AirTran frequent flyer programs will accrue and redeem miles on both airlines' networks.
Reorganizing to Emerge a Stronger Airline
Mikelsons also broadly outlined the key points of ATA's reorganization plan, which entails optimizing its fleet and plane sizes and focusing on the most profitable cornerstones of its business: commercial flights routed through its Indianapolis hub, flights to Hawaii, as well as military and some commercial charter service. ATA will continue to operate its Chicago Express connection service through Chicago Midway, as well as its Ambassadair Travel Club.
ATA also stressed its continued commitment to Indianapolis, which will remain the Company's headquarters and primary hub. Mikelsons continued, "Indianapolis has been a key source of our growth, and we will remain in the city we have called home since 1973."
To further ensure ATA's smooth operation, the Company has filed various first-day motions with the Bankruptcy Court that would allow it to, among other operations, continue timely payments to fuel vendors, employees and other service providers, as well as to assume clearinghouse and interline contracts.
Mikelsons added, "We have begun taking the difficult steps to transform ATA into an airline that is positioned to meet the needs of our customers today and for the future. Our agreements with AirTran, combined with ATSB's flexibility, will facilitate ATA's transformation into a formidable low-fare competitor, capable of winning in today's airline industry environment for our customers, employees, creditors, and other stakeholders."
ATA has faced significant financial and operational challenges stemming from the slowdown of the economy, the tragic events of September 11, 2001, pricing pressure, major increases in fuel costs, which have not yet abated, and losses of revenue and bookings in its important Florida market due to four hurricanes this summer. Changes in consumer behavior, particularly the reduction in business travel and the changes in business travel patterns, have led to a significant drop in revenues due, in part, to ATA's large aircraft. ATA determined that the Chapter 11 process offered the Company the most viable way to restructure its operations and finances to remain competitive.
About ATA Airlines
Now in its 31st year of operation, ATA (Nasdaq: ATAH - News) is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel- efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. For more information, visit the web site http://www.ata.com .
sunnysideup
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ATA reported that, in conjunction with the filing, the airline has reached an agreement with AirTran Airways, Inc. (NYSE: AAI - News) in which AirTran will pay ATA $87.6 million to assume ATA's flight operations, gates lease, and routes in Chicago Midway Airport, as well as arrival and departure slots at LaGuardia Airport and Ronald Reagan Washington National Airport. The agreement, which is subject to approval by the City of Chicago and the Bankruptcy Court, will take effect later this year or early next year, and is to be finalized over the next several days
Citrus Jockey
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AirTran Airways Agrees to Assume Chicago Midway Gates and Acquire Certain Other Assets of ATA Airlines
Tuesday October 26, 6:11 pm ET
ORLANDO, Fla., Oct. 26 /PRNewswire-FirstCall/ -- AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE: AAI - News), announced today that the airline has agreed, subject to certain conditions, to assume the Chicago Midway Airport gate leases and acquire certain other related assets including takeoff and landing slots at New York's LaGuardia and Washington's Ronald Reagan National airports of ATA Airlines, a unit of ATA Holdings Corp. (Nasdaq: ATAH - News), for approximately $87.5 million. ATA Holdings Corp., and certain of its subsidiaries, have filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Indiana.
[size=-2]ADVERTISEMENT[/size]
document.write( the agreement with ATA Airlines, AirTran Airways would assume ATA's leases on up to 14 gates at Chicago's Midway Airport, 19 time-controlled take-off and landing slots at New York's LaGuardia Airport and 8 such slots at Washington's Reagan National Airport. The deal must receive various approvals, including approval of the Bankruptcy Court in ATA's Chapter 11 proceeding. In the interim, ATA Airlines is to continue operating flights and business as usual at Chicago's Midway Airport.
AirTran Airways plans to introduce its fuel efficient, all new Boeing fleet on the routes from Chicago Midway, and intends to enter into a marketing agreement with ATA Airlines which is currently contemplated to include a code-share, frequent traveler program and other programs to benefit both carriers' customers. In conjunction with the code-share arrangement, the carriers, also intend to enter into an agreement to outsource certain flying during the transition of service from ATA Airlines to AirTran Airways at Chicago's Midway Airport.
"This proposal offers a great opportunity for both AirTran Airways and the City of Chicago as well as significantly aiding ATA in its reorganization," said Joe Leonard, chairman and chief executive officer of AirTran Airways.
"Adding a hub in Chicago is an important strategic expansion for AirTran Airways' growing network," stated Robert L. Fornaro, president and chief operating officer. "A Midwest hub complements AirTran Airways' strong East Coast network and will capitalize on a number of synergies in the cities we serve across the country. This addition will give AirTran Airways a true national presence. We look forward to increasing our service for the Chicago business and leisure travelers." AirTran Airways is one of America's largest low-fare airlines - with 6,000 friendly, professional Crew Members and operating over 500 flights a day to more than 40 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, the world's busiest airport by passenger volume, where it is the second largest carrier. AirTran Airways, a subsidiary of AirTran Holdings (NYSE: AAI - News), is the world's largest operator of the Boeing 717 and has America's youngest all-Boeing fleet. The airline recently added the Boeing 737-700 aircraft, one of the most fuel efficient and environmentally friendly aircraft flying today, to its fleet and looks to begin outfitting its planes with XM Satellite Radio this fall. For reservations or more information, visit http://www.airtran.com (America Online Keyword: AirTran).
Tuesday October 26, 6:11 pm ET
ORLANDO, Fla., Oct. 26 /PRNewswire-FirstCall/ -- AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE: AAI - News), announced today that the airline has agreed, subject to certain conditions, to assume the Chicago Midway Airport gate leases and acquire certain other related assets including takeoff and landing slots at New York's LaGuardia and Washington's Ronald Reagan National airports of ATA Airlines, a unit of ATA Holdings Corp. (Nasdaq: ATAH - News), for approximately $87.5 million. ATA Holdings Corp., and certain of its subsidiaries, have filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Indiana.
[size=-2]ADVERTISEMENT[/size]
document.write( the agreement with ATA Airlines, AirTran Airways would assume ATA's leases on up to 14 gates at Chicago's Midway Airport, 19 time-controlled take-off and landing slots at New York's LaGuardia Airport and 8 such slots at Washington's Reagan National Airport. The deal must receive various approvals, including approval of the Bankruptcy Court in ATA's Chapter 11 proceeding. In the interim, ATA Airlines is to continue operating flights and business as usual at Chicago's Midway Airport.
AirTran Airways plans to introduce its fuel efficient, all new Boeing fleet on the routes from Chicago Midway, and intends to enter into a marketing agreement with ATA Airlines which is currently contemplated to include a code-share, frequent traveler program and other programs to benefit both carriers' customers. In conjunction with the code-share arrangement, the carriers, also intend to enter into an agreement to outsource certain flying during the transition of service from ATA Airlines to AirTran Airways at Chicago's Midway Airport.
"This proposal offers a great opportunity for both AirTran Airways and the City of Chicago as well as significantly aiding ATA in its reorganization," said Joe Leonard, chairman and chief executive officer of AirTran Airways.
"Adding a hub in Chicago is an important strategic expansion for AirTran Airways' growing network," stated Robert L. Fornaro, president and chief operating officer. "A Midwest hub complements AirTran Airways' strong East Coast network and will capitalize on a number of synergies in the cities we serve across the country. This addition will give AirTran Airways a true national presence. We look forward to increasing our service for the Chicago business and leisure travelers." AirTran Airways is one of America's largest low-fare airlines - with 6,000 friendly, professional Crew Members and operating over 500 flights a day to more than 40 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, the world's busiest airport by passenger volume, where it is the second largest carrier. AirTran Airways, a subsidiary of AirTran Holdings (NYSE: AAI - News), is the world's largest operator of the Boeing 717 and has America's youngest all-Boeing fleet. The airline recently added the Boeing 737-700 aircraft, one of the most fuel efficient and environmentally friendly aircraft flying today, to its fleet and looks to begin outfitting its planes with XM Satellite Radio this fall. For reservations or more information, visit http://www.airtran.com (America Online Keyword: AirTran).
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