ATA in trouble?

[Delville]

Just got done talking to a friend of mine. He said that he heard ATA had just deferred some aircract deliveries and was in some kind of trouble with it's credit rating. I have not heard anything like this at all so I'm assuming it's some bad poop. Just want to make sure there's no truth to it.

 

[Newjetjockey]

From what I have heard they are not doing good. I had not heard of the deferred deliveries but I know they are unable to pay off their current debts. They are working with Boeing on refinancing I believe.

I think ATA is a good airline with a very low CASM. However, they operate mostly out of Chicago and face high competition (Southwest, AA, UAL.)

If they make it through this downturn I believe they will do well but I have not heard any good financial news lately. They did however turn a profit last quarter. I can't remember it that included the Govt money or not.

 

[ataopsdave]

the profit that ata posted did not include the money from the govt.

 

[General Lee]

ATA and Southwest provide direct competition from MDW to these cities: LAX, LAS, PHX, SEA, MCO, FLL, and IND. Other than those cities, the service doesn't really mix.

Bye Bye--General Lee

 

[UM#1]

This has already been discussed with all the facts, read the thread and you'll understand whats up with correct information not heresay from posters like Newjetjockey..

http://forums.flightinfo.com/showthread.php?threadid=20847

 

[MDP727]

ATA is in the process of renegotiating aircraft leases on all the new aircraft we have taken delivery of in the last three years. These aircraft were purchased and financed in a pre 9/11 market. Short term financing with front loaded ballon payments. No different than morgtaging a house for five years instead of thirty. The lessors don't want aircraft back they want compounded interest. There's already 600 aircraft parked in the desert now thanks to the economic times over the last couple of years. The last SEC filing stated the remaining aircraft deliveries have been purchased by a third party and released-long term back to ATA holdings. Perhaps an outside investor, the owner, GE, IFLAC, who knows. This is not uncommon. This was done to ensure delivery of the aircraft while conserving cash.
At the line pilot level our CASM is 6.1%. Our load factor last month was the second highest behind CAL. We have made a profit the last two quarters and will the third, the fourth will be tough for everyone. The company has stated they will continue to hire 8 every three weeks indefinetely. I don't know what more spin to give you.
We are a viable, thriving airline that's not going to just go away.
There's only a couple of airlines in great financial health right now. Hopefully all of us will experience a prospering future. The FAA not predicts the passenger loads to increase 4% a year for the next 15-20 years.

 

[32drvr]

Upfront!

I recently interviewed at ATA. The management pilots that briefed us before our interviews began raised this issue themselves, and discussed in detail the company's plans to restructure its debt. I must say, that's a first for me- being at an airline interview where the company actually highlights its biggest financial problem and discusses solutions! This was just one indication that the company would be upfront and classy about itself- many, many more indications followed during the course of the day. Sounds like folks I'd like to work for, and sure hope I get the chance.

'32

 

[Wiskey Driver]

Sounds a lot like posturing to me. If you want to get a better deal on aircraft leases, state that you are losing money and attempt to renegotiate.

All indications point to a bright future for ATA.

WD.

 

[George Zip]

Up Front...

The fact that ATA is facing some difficulties is not in the least bit news. The fact that there is a lot of work to do to survive and prosper is not news. What is news to me is that this is the first place I have worked where the management communicates clearly what they percieve the problems to be, what they intend to do about them, and what our true progress has been in acheiving the goals set out.

I'm sure many ATA pilots would not agree with me, but compared to where I have been before this is very refreshing. I did a lot of research on ATA before making the effort to get hired, as I had a secure (for the time being) job captaining 727's. Everything that is happening now at ATA was discussed and even pointed out by managment back then (last year), and they are now doing exactly what they said back then they were going to do about it.

I think our CEO is very honest with himself and us about our position, the industry, and his vision of our future. I won't extend that comment to contract negotiations - I wasn't here then and I know that may have been a very different story. They also seem to be willing to be frank about some of the dumb decisions in recent years that have had ill effects.

As pointed out above, the current liquidity issue is a result of living with pre 9/11 lease terms in a post 9/11 revenue environment. Our mgmt went to the lessors a long time ago about this and were essentially told "we're happy you are coming to us early about this.....we'll work with you but let's see how you do without changing the payments first" - this from our CFO at a briefing on the situation early this year.

At the end of the day, ATA made a real, honest-to-God profit last quarter, BEFORE the federal money. That combined with the low CASM, nationwide route structure, diversified operations (profitable regional, worldwide military charter, commercial charter) and nearly 30 straight years of profitability tell me there's a strong chance ATA will be one of the bright stars of the industry's future. I am confident that the current debt structure issues will be dealt with.

Zipper