ATA Financial Situation

[storminpilot]

http://biz.yahoo.com/djus/031013/1714000562_1.html

Dow Jones Business News == ATA Holdings/Extension: Still Short Of Needed 85%

Monday October 13, 5:14 pm ET

INDIANAPOLIS (Dow Jones)--ATA Holdings Corp. extended the exchange offer until Oct. 24 to holders of $175 million of notes due 2004 and $125 million of notes due 2005.

As of Friday, the Indianapolis parent of American Trans Air (NasdaqNM:ATAH - News) had received assent from holders representing 16.5% of the 10.5%, 2004 senior notes and 23.5% of the 9.625%, 2005 senior notes. The company said it might extend the offer again, given the miminum acceptance requirement is 85% of each series.

The deal is also subject to approval by the Air Transportation Stabilization Board.

ATA Holdings warned in mid-August that it could be forced to file for bankruptcy protection if it didn't win relief from creditors and lessors.

In late August, ATA Holdings launched the offer to exchange newly issued 11% senior notes due 2009 and 10.125% senior notes due 2010 for the notes due 2004 and 2005, respectively. Also, the holders will receive $60 for $1,000 in 2004 notes and $40 for $1,000 notes in 2005 notes. ATA had extended the offer to Oct. 10 from Sept.12.

The note restructuring is also critical to ATA's preliminary agreements to delay aircraft leases payments due June 30, 2003, and March 31, 2005, and defer certain aircraft delivery.

As of June 30, the low-fare carrier had $186.0 million in cash and cash equivalents and $323.1 million in current liabilities.

Shares of ATA closed Monday at $8.00, up 41 cents, or 5.4%

 

[jettypeguy]

No worries mate, nice profits this quarter, bonds will go thru....

From the inside;

Bond Exchange Offer
On August 29, the company launched an exchange offer on its 2004 and 2005 unsecured notes. This offer was extended for two weeks on September 26 and will be extended for an additional two weeks today. According to the latest extension, our offer will now remain open through Friday, October 24.

The terms of the company's offer are to exchange existing and outstanding notes maturing in 2004 and 2005 for new notes that would mature in 2009 and 2010. In addition to the change in maturity dates, the company has offered an increase in the coupon rate of interest and has offered to pay a small amount of principal as of the closing date of the exchange.

We have received a lot of questions from employees as to why the company extended its exchange offer. You should not read too much into our extensions of the offer. Securities transactions like this are usually extended multiple times. Our bond owners do need time to consider the offer that we made. We expect that there will be some negotiations with bond owners and that this will take some time. We are hopeful that we will arrive at a transaction on the bonds that will be good for the company.

 

[storminpilot]

Only time will tell if you have the right info. But extensions can only go on for so long.

 

[jettypeguy]

Only time will tell if you have the right info. But extensions can only go on for so long.

Not quite sure what youre trying to get at, do you hold some grudge against ATA and wish for its demise. My "Info" is something from the inside to which you don't have access to, Therefore I thought I'd give you a taste of how we on the inside feel about this issue. This bond issue is not new news to those of us who work at ATA, in fact it is the last of many goals to sustaining our future, all the others we have achieved (i.e profitablity,lowest CASM's in industry,cutting costs,increasing flying/service,etc). As far as the extensions this is actually normal in these type situations. Some of the voting members/bond owners would like to see those nice 3rd quarter profits/results-forward looking statements before committing and getting on board. Plus ole' George is one tough, but good negotiator, thats why we were the first and one of the only to get the NTSB loan,etc and will be able to make this work like all the other goals. 85% should be on board by the end of the month thus completing the deal. I hope it's not that you don't like us and you're just sharing the news release you found with all of us, cause we gonna be around for awhile....

 

[CREOBED17]

jettypeguy,
slightly off the financial topic for a second - i was just curious if you think ATA will expand into new domestic markets anytime the near future or if they are strictly increasing aircraft utilization for current routes only. thanks.

 

[General Lee]

They stated today that they were starting daily SEA-HNL on 757-200s on FEB 20th, 2004 I believe. That should give NW and Hawaiian some good competition.


Bye bye--General Lee

 

[jettypeguy]

jettypeguy,
slightly off the financial topic for a second - i was just curious if you think ATA will expand into new domestic markets anytime the near future or if they are strictly increasing aircraft utilization for current routes only. thanks.

mainly a/c utilization for the present time. although Sea-HNL as the General pointed out is a new route. There is some Trans-con routes going into effect soon (mainly out of EWR I believe to the west coast), there are a few destinations out of Indy over the next few months but I believe only one is a "new" florida destination, the rest adding frequency. Rumor wise, SFO is still in Negotiations, even heard it might be our next base, West coast to Hawaii on the 737 will probably happen someday soon, wish I could give you more info regarding that particular topic but I just don't know fact from rumor. www.ata.com is probably the best source of info as the pilots are always the last to know...

 

[jettypeguy]

Only time will tell if you have the right info. But extensions can only go on for so long.

I TOLD YA SO!!!


Chicago Tribune Article

From The Front Page of Today's Chicago Tribune Business Section

ATA nears deal on hefty debt

Founded as a charter business, ATA Airlines abandoned its cautious ways and embarked on an ambitious expansion that landed the Indianapolis-based carrier near bankruptcy



By Melissa Allison
Tribune staff reporter
Published January 29, 2004

ATA could step away from the brink of bankruptcy on Friday, avoiding the dubious distinction of becoming the first major low-cost airline to file for Chapter 11 protection.

For months, ATA Airlines has warned that high lease and bond payments due this year might lead to a financial meltdown.

If a deal with bondholders is completed on Friday as expected, ATA will have the breathing room it needs to continue building strength in the 40-some markets it serves. ATA is the largest carrier, based on passengers, at Chicago's Midway International Airport.

A former charter carrier that became a leisure-destination airline in the 1990s, Indianapolis-based ATA has painted crisp corporate logos over the palm trees on its airplanes' tails.

The new look signals the carrier's interest and success in adding business travelers to its passenger mix, which helped it boost operating revenue by 19 percent in the first nine months of 2003.

ATA had appeared healthy, an expanding airline that in 2002 surpassed Southwest Airlines as Midway's largest carrier. But like many airlines before it, ATA made a crucial mistake in an unforgiving industry.

At first, ATA's growth strategy seemed prudent. The airline needed new airplanes to attract more business travelers and to cut maintenance costs. The company agreed to make a large portion of its lease payments early for dozens of new planes, a move that lowered its overall leasing costs.

But in the cyclical airline business, downturns can occur suddenly.

ATA signed its airplane deals about a year before the attacks of Sept. 11, 2001, which sent the airline industry into a financial tailspin and left ATA unable to make its substantial debt payments over the next couple years.

Last year, Moody's Investors Service downgraded ATA's rating into a range that indicates a high possibility of default.

"It's the only low-cost carrier that says it has a financial circumstance that could put it into bankruptcy," said Moody's airline analyst Richard Bittenbender.

Now, ATA's bondholders hold the key to its future. Unless they agree to new terms before $300 million in bond payments come due in 2004 and 2005, ATA could go bankrupt.

The carrier reached an agreement last summer with Boeing Co. and two other lessors to reduce its lease payments by nearly $150 million in the short term.

But that deal is contingent upon ATA renegotiating terms with its bondholders, something it has been working to do since August.

"It's taken longer than I thought," said David Wing, ATA's chief financial officer.

ATA announced Monday that it expects to sign a final deal with bondholders on Friday that would push back the majority of its bond payments to 2009 and 2010, which would satisfy the lessors' demands.

George Mikelsons, the 66-year-old Latvian emigre who built ATA from nothing and owns 70 percent of the company, believes the airline grew too quickly during the tenure of former Chief Executive John Tague, now an executive at United Airlines.

"We at least tripled and probably quadrupled the number of new markets we went into," Mikelsons said.

In earlier days, as a leisure airline that grew out of a charter service, ATA had been cautious and low key, entering new markets at a slower pace and waiting until one became profitable before entering another, Mikelsons said.

"That's my cheap immigrant mentality," Mikelsons said with a laugh.

Tague was CEO of ATA from 1997 to 2002. He resigned after Mikelsons tried to narrow his responsibilities.

Tague declined to be interviewed for this article.

Mikelsons remained chairman while Tague ran ATA, and now he is back in the chief executive's seat, with no plans on leaving. He wants to ensure that the airline, which he launched as a one-man charter operation in 1973, is run properly.

"I see the next four to five years as a wonderful opportunity to really put ATA on the map by more effectively, efficiently and profitably serving existing markets," Mikelsons said.

U.S. destinations range from Boston, New York and Philadelphia to Miami, San Francisco and Maui. In 2002, ATA added flights from Chicago to Mexico, giving Midway its first international routes in 40 years. About 43 percent of ATA's employees are in Chicago.

Like many low-cost carriers, ATA has performed far better during the past two years than its mainline competitors.

Its costs are among the lowest in the industry. And its growing revenue--helped by new airplanes, new markets and successful advertising--contributed to net income of $40 million in the first nine months of 2003, a time when many airlines were posting losses.

ATA received a bump from its decadeslong military charter business during those months, when almost 20 percent of its $1.1 billion in operating revenue came from flying troops to the Middle East.

Experts praise ATA for updating its fleet despite the heavy cost.

"It's a much better travel experience, which greatly increased their patronage and success in attracting business travelers," said Aaron Gellman, a professor at the Transportation Center in the Kellogg School of Management at Northwestern University.

Besides its bond and lease payments, ATA has a $168 million loan due in late 2008 that is nearly 90 percent guaranteed by the Air Transportation Stabilization Board, which was formed to help airlines in the wake of Sept. 11.

To obtain the loan, ATA agreed to give the government a 12 percent stake in the airline.

Erik Engdahl, head of the pilots union at ATA, said the airline's growth into new markets--it has added 23 routes since Sept. 11, 2001, and boosted its workforce by 10 percent in the past year--gives it a competitive advantage as more passengers begin to fly.

"We're at a full run when the starting gun goes off," Engdahl said.

 

[atafan]

Tague declined to respond!

He's busy over at Ted.

Thank You John, and lots of luck on your future endeavors....

 

[propjob27]

Stormin, you're posting some OLD news

Here's the new news, stocks over $12

ATA Holdings Corp. Announces It Expects to Complete Exchange Offers for 10 1/2 Percent Notes Due 2004 and 9 5/8 Percent Notes Due 2005 on January 30, 2004 and Extends Exchange
January 26, 2004 7:39:00 PM ET


INDIANAPOLIS, Jan. 26 /PRNewswire-FirstCall/ -- ATA Holdings Corp. (the "Company") ATAH, the parent company of ATA Airlines, Inc. ("ATA"), today announced the extension of its offers to exchange (the "Exchange Offers"):

(Logo: http://www.newscom.com/cgi-bin/prnh/20030929/ATAHLOGO-b )

* newly issued Senior Notes due 2009 (the "2009 Notes") and cash consideration for any and all of the $175 million outstanding principal amount of its 10 1/2 percent Senior Notes due 2004 (the "2004 Notes"); and

* newly issued Senior Notes due 2010 (together with the 2009 Notes, the "New Notes") and cash consideration for any and all of the $125 million outstanding principal amount of its 9 5/8 percent Senior Notes due 2005 (the "2005 Notes" and, together with the 2004 Notes, the "Existing Notes").

As part of the Exchange Offers, the Company is also seeking solicitations of consents to amend the indentures under which the Existing Notes were issued. The Company has extended the expiration date of the Exchange Offers until 5 p.m., New York City Time, on January 29, 2004, unless further extended by the Company.

The Company expects to satisfy all conditions to the Exchange Offers and complete the Exchange Offers on January 30, 2004.

Completion of the Exchange Offers is subject to a number of conditions. Among these conditions is the condition (the "Minimum Tender Condition") that the Company receive valid tenders representing at least $255 million, or 85.0 percent, in aggregate principal amount of Existing Notes (without regard to series). As of January 26, 2004, $152,810,000 in aggregate principal amount of 2004 Notes and $104,995,000 in aggregate principal amount of 2005 Notes have been tendered in the Exchange Offers, for a total of $257,805,000, or 85.9 percent, in aggregate principal amount of Existing Notes tendered. A portion of the Existing Notes were tendered by holders of Existing Notes who entered into an agreement (the "Lock-Up Agreement") with the Company obligating them to tender their Existing Notes. The Lock-Up Agreement is subject to a number of conditions and other terms that, if triggered, would result in these holders having the right to withdraw their tenders. The Company expects that all of these conditions and other terms will be satisfied in accordance with the Lock-Up Agreement and that these holders therefore will not have withdrawal rights. Accordingly, the Minimum Tender Condition is expected to be satisfied.

The Exchange Offers are also subject to the condition that definitive amendments to several of ATA's aircraft operating leases be completed. The Company believes that these definitive amendments are complete and only need to be executed. The Company expects to execute these definitive amendments on or before the date the Exchange Offers are completed, thereby satisfying this condition.

The Exchange Offers are also conditioned on receiving the consent of the Air Transportation Stabilization Board (the "ATSB"). The Company believes it has reached an agreement in principle with the ATSB pursuant to which the ATSB will provide its consent to the Exchange Offers. The Company has been working with the ATSB and expects to receive their written consent as required by the Exchange Offers. Accordingly, the Company expects that it will not extend the expiration date of the Exchange Offers again and that it will complete the exchanges (including the cash payments) and consummate the other transactions contemplated by the Exchange Offers on Friday, January 30, 2004.

The Company can provide no assurance, however, that it will receive the consent of the ATSB or that the Exchange Offers will be completed on January 30 or at all. The Company will provide an update on the status of this consent and the Exchange Offers by means of a press release when the Company is able to do so. In the interim, holders of Existing Notes who have not tendered their Existing Notes in the Exchange Offers may still do so until 5 p.m., New York City Time, on January 29, 2004.

The Exchange Offers are being made pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"). The New Notes offered in the Exchange Offers have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws. This announcement is not an offer to exchange, a solicitation of an offer to exchange or a solicitation of tenders with respect to any 2004 Notes or 2005 Notes, nor is this an offer to sell or the solicitation of an offer to buy any New Notes in any state in which such offer, solicitation or sale would be unlawful.