ATA posts LOSS

[ataopsdave]

ATA just poseted a 10.5 million loss for the quarter.

 

[ATA737CAPT]

actually, it's a 26 million dollar loss.

 

[ataopsdave]

sorry i apologize

 

[737 Pylt]

Loss is a Loss

Either way, this is some serious sh1t!

If a discount carrier like ATA can not make any money, then this industry is in some seriously bad trouble. Problem is every time one carrier tries to raise its fares (like AA recently) others are reluctant to follow suit.
737
things that make you go hmmmmm........................

 

[N905TW]

We have been told lately how bad things are, and I honestly expected worse than this... although this is certainly bad enough!!!

I sure hope that our seemingly rudderless ship finds its direction before all the cash is gone, this IS the summer travel season after all, where we are supposed to be making the money..... There is so much potential here, if we could just get our #$@#! together....

The company losing $$ in the busy summer quarters... this looks so familiar.. where have I seen this before.....

 

[H25BCPTN]

NWA is putting a hurt to ATA.

 

[TWA Dude]

NWA is a "legacy" carrier, ATA should be putting the hurt on them! Good luck, guys.

 

[ATA737CAPT]

NWA has not even started to compete with ATA. Their service increses out of IND don't start until Oct. With their costs compared to ours and the fact that the people if Indy are pretty loyal to ATA, I don't see them as a problem.

 

[FarginDooshbahg]

NWA is putting a hurt to ATA.

Caution. Genius at work.

 

[H25BCPTN]

Sorry I must have gotten bad information from Indy ground when I asked about the extra NWA airplanes on the ground. Indy said they have seen more flights with more flights on the way.


Must be a touchy area for you guys.

 

[ATA73Pilot]

Under current operating assumptions and absent any changes to existing aircraft lease obligations, the Company does not expect to have sufficient cash to meet its cash obligations in the first quarter of 2005.

As of September 30, 2004, the Company is required to meet an earnings before interest, taxes, depreciation, amortization and aircraft rent ("EBITDAR") to fixed charges ratio covenant under its secured term loan, which is partially guaranteed by the Air Transportation Stabilization Board ("ATSB"), and its mortgage note payable agreements. In addition, certain of the Company's other loan agreements have cross-default provisions that may be triggered if the Company fails to meet this ratio. These covenants were negotiated based on future projections that did not anticipate an on-going weak revenue environment and increasing fuel costs.

Based on current financial projections, the Company is uncertain of its ability to satisfy this covenant. If the Company is unable to meet this financial covenant, it would be in default under these agreements, and the lenders would have the right to accelerate the maturity date of the loan and exercise other remedies against the Company.

The Company intends to discuss its financial position with the ATSB and other lenders to seek to obtain any necessary waivers of these covenants. However, the Company can provide no assurances as to its success in obtaining a waiver or revision of these covenants. In addition, the Company cannot provide assurance that it will not be required to make pre-payments under the loans in order to revise the covenants, which could negatively impact the Company's cash outlook.

The Company has not identified alternate sources of funding to meet cash requirements should an acceleration of the maturity date occur due to the current economic and capital environment.

.....

 

[mt2]

Where's the beef?

Oh come on now JEF, the Company has identified additional sources of funding and it is US. Again.

mt2

 

[njcapt]

Not from this irritated First Officer.

The concession stand is CLOSED.

 

[N905TW]

http://www.theindychannel.com/money/3658655/detail.html

TheIndyChannel.com -- ATA Warns Of Possible Cash Shortage In '05

Indy-Based Company Reports $26M Second-Quarter Loss

POSTED: 8:53 PM EST August 16, 2004
UPDATED: 8:55 PM EST August 16, 2004



INDIANAPOLIS -- Indianapolis-based ATA Airlines on Monday reported a
$26 million loss for 2004's second quarter and warned it might not
have enough cash to meet its obligations early next year.

The airline said that although its number of customers has risen
over the last year, other factors -- including aggressive airline
price wars, fewer military charter flights, and a 27.8 percent jump
in the cost of jet fuel -- have overcome the revenue increase.

In a filing with the Securities and Exchange Commission, ATA said it
expects to meet its cash obligations in 2004, but it might have
trouble doing so in 2005's first quarter.

"Under current operating assumptions and absent any changes to
existing aircraft lease obligations, the company does not expect to
have sufficient cash to meet its cash obligations in the first
quarter of 2005," the filing said.

ATA, which previously said it doesn't expect to turn a profit in
2004, recently has taken steps to cut costs. This summer, it
eliminated 320 jobs and ordered all its departments to cut expenses
by 10 percent.

The airline employs more than 7,000 people. More than 3,000 of them
are in Indianapolis, RTV6 reported.

"ATA Airlines is dealing with many of the same challenges currently
affecting other airlines, including record fuel costs and an anemic
revenue environment," ATA said Monday in a news release. "Management
and employees are working diligently to return the company to
profitability."

Monday's filing with the SEC also warned that ATA might not meet the
cash balance requirements of a federally backed loan granted in
2002. If it does not do so by Sept. 30, the government and other
lenders could declare the company to be in default.

"The company is uncertain of its ability to satisfy this covenant,"
the filing said.

The airline has said it hopes an expanded schedule and the
introduction of business class seating will lead it to profitability
next year.

 

[Jeff Helgeson]

Choppin' up the furniture in the summer make for a very cold winter!

We have been told lately how bad things are, and I honestly expected worse than this... although this is certainly bad enough!!!

I sure hope that our seemingly rudderless ship finds its direction before all the cash is gone, this IS the summer travel season after all, where we are supposed to be making the money..... There is so much potential here, if we could just get our #$@#! together....

The company losing $$ in the busy summer quarters... this looks so familiar.. where have I seen this before.....

Ah yes, the good ole days. I miss them, I wish you the best of luck!

 

[ATA73Pilot]

ATA's cash flow problems have been compounded because the bank that processes the airline's MasterCard and Visa payments has started holding onto the entire amount charged by a passenger until the flight takes place, according to the company's filing. Previously, the company would receive a portion of the ticket purchase in advance.

This change, ATA estimates, will cut the company's cash balance by $20 million.

 

[AA717driver]

Ditto. Too many of my ex-TWA homies over there that shouldn't have to go through this again.

TC
IND

 

[TriJet]

I sure hope that our seemingly rudderless ship finds its direction before all the cash is gone

errr....same goes for the rest of 'em.

 

[ATA73Pilot]

A bankruptcy would be a huge blow to George Mikelsons, ATA's Latvian founder, who still holds a majority of the airline and whose equity could be worthless in the event of a filing.

To avert this, he is focusing on revenue improvements, such as launching business class seating this month, and considering moving into transatlantic markets. - FT.com

 

[350DRIVER]

A bankruptcy would be a huge blow to George Mikelsons, ATA's Latvian founder, who still holds a majority of the airline and whose equity could be worthless in the event of a filing.

To avert this, he is focusing on revenue improvements, such as launching business class seating this month, and considering moving into transatlantic markets. - FT.com

I just wonder how successful he could/will be if he launches into what seems to be an already oversaturated transatlantic market?. I don't think this is the answer to his "domestic" problems that he is currently being faced with.

Best of luck to all you guys over there.

3 5 0

 

[ATA73Pilot]

ATA's Biz Plan is from the dartboard school of management.

Throw a bunch of darts and hope that one hits the target.

Without outside intervention, ATA is quickly going to be added to the list of those illustrious airlines before us that failed to meet the needs of a changing marketplace.

The worst part, if ATA manages to get around this looming financial crisis, there is still the bond issue to contend with in a few years.

 

[MLBWINGBORN]

Ive seen on another board that ATAs operations at MDW are for sale..

Anybody else hear this one?

Mike

 

[lowecur]

Ive seen on another board that ATAs operations at MDW are for sale..

Anybody else hear this one?

Mike

It's really the only viable asset they have. Since WN already has 19 gates, it makes you wonder if they would be interested. As much as they say they aren't interested, B6 could definitely use the 14 gates. Also, the Chicago Airport System could have the taxpayers buy the gates. It would put them in control, and they could use the gates to help the situation at ORD. It's certainly would be a good stopgap until the situation at ORD was resolved by enlarging the airport.

It would be interesting to see what the ATA business plan would be if they decided to do this.

 

[tz800ca]

For Sale

Ive seen on another board that ATAs operations at MDW are for sale..

Anybody else hear this one?

Mike

ATA has been for sale since inception, if the price is right. George has had the opportunity to sell several times and apparently could not come to an agreement because of control and/or money. I bet he wishes he would of sold to AAI when he had the chance years ago.

 

[N905TW]

Ive seen on another board that ATAs operations at MDW are for sale..

Anybody else hear this one?

If MDW is indeed for sale, what exactly would be left? IND-RSW? LAX-CUN?

I really dont think George's plan is to shrink the airline back into its former Charter self, but I haven't seen this other rumor you are speaking of........

However, what about a sale/leaseback of the MDW gates and facilities to the City of Chicago? That would generate cash quickly, yet ATA still retains the long term use of the MDW gates, hangars, the south ramp ChicagoExpress ramp and hangars, etc.

I have no idea if we even "own" all of the facilities now though....... but maybe thats where that "rumor" came from....... just a thought..... anyone else have an idea?

 

[ATA73Pilot]

I did hear through a management source that an unknown number of gates in MDW were up for sale.

Take it with the appropriate grain of salt.

 

[lowecur]

I did hear through a management source that an unknown number of gates in MDW were up for sale.

Take it with the appropriate grain of salt.

Holly Hedgeman has said her sources confirm that, but it fell through last week. Boeing was trying to broker a deal between either WN or FL to buy the MDW operation. It would give WN a monopoly at MDW, and I believe the city would find this counterproductive. I know most airport mgt people are skiddish about having one airline control too many gates in this environment. I believe these gates are leased by exclusive use to TZ, and they would have the right to sell these lease agreements. I think the city should buy back the exclusive use leases, and use them to off-set the situation at ORD.

Apparently the owner of TZ wants to go back to the charter business, and add on European trips. They are also a holding company and could take the airline to Chapter 11 or 7, and leave the holding company viable.

 

[mach zero]

Going back to a charter operation is not going to work either. Airfares are so frigging low right now, it's cheaper for the inclusive tour operators to have their customers fly themselves to a location than buy a charter flight. The government would be the only real dependable customer for charters but ATA only has 5 L-1011's operating right now and the government books widebodies first. ATA will definitely not be the last airline to go under if the industry does not raise fares.

 

[ataopsdave]

ATA Holdings could be headed for bankruptcy-analyst
Wednesday August 18, 3:40 pm ET
By Jui Chakravorty



NEW YORK, Aug 18 (Reuters) - ATA Holdings Corp. (NasdaqNM:ATAH - News), the parent of struggling ATA Airlines, faces a liquidity crisis that could push it into bankruptcy by early next year, an analyst said on Wednesday.

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var lrec_target="_top";var lrec_URL = new Array();lrec_URL[1] = "http://us.ard.yahoo.com/SIG=1261uvk5i/M=304845.5205623.6356706.1383221/D=fin/S=95410078:LREC/EXP=1092945471/A=2279397/R=0/id=flashurl/SIG=13j2c515m/*http://www.cybertrader.com/offer/offerdirect.asp?offer=YHOREFER&property=finance&area=news&url=/marketing/options";var link="javascript:LRECopenWindow(1)";var lrec_flashfile = 'http://us.a1.yimg.com/us.yimg.com/a/cy/cybertrader/options_300x250_072604.swf?clickTAG='+link+'';var lrec_altURL = "http://us.ard.yahoo.com/SIG=1261uvk5i/M=304845.5205623.6356706.1383221/D=fin/S=95410078:LREC/EXP=1092945471/A=2279397/R=1/id=altimgurl/SIG=13j2c515m/*http://www.cybertrader.com/offer/offerdirect.asp?offer=YHOREFER&property=finance&area=news&url=/marketing/options";var lrec_altimg = "http://us.a1.yimg.com/us.yimg.com/a/cy/cybertrader/options_300x250_072604.gif";var lrec_width = 300;var lrec_height = 250; on error resume next plugin = ( IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.6"))) ATA said earlier this week that barring changes to its aircraft lease agreements, it does not expect to have enough cash to meet those obligations in the first quarter of 2005.

The company also said its cash balance will fall by $20 million in this year's third quarter.

"There is a very high risk of bankruptcy at this point," Clark Orsky, a bond analyst for KDP Investment Advisors, said in an interview. "We do not think ATAH has enough liquidity to get past the first quarter of 2005 without substantial relief from its aircraft lessors."

In a statement issued on Wednesday, the airline said: "ATA Airlines is dealing with many of the same challenges currently affecting other airlines, including record fuel costs and an anemic revenue environment. Management and employees are working diligently to return the company to profitability."

Shares of ATA hit a 52-week low of $2.56 on Nasdaq on Wednesday before recovering to $2.88, up 4 cents, or 1.4 percent in late trading.

ATA, the No. 10 U.S. airline, said its cash flow problems have been compounded by increased holdbacks by its credit card processing bank. Those holdbacks will cut the company's cash balance by $20 million in the third quarter, it estimated.

Indianapolis-based ATA Holdings had $150 million in cash on June 30, down from $186 million a year earlier.

Orsky also said ATA will likely be unable to meet its Air Transportation Stabilization Board-backed loans in the third quarter, and will have to ask for waivers.

"While there is a precedent for ATSB granting waivers (as in the case of US Airways (NasdaqNM:UAIR - News)) that carrier was required to make substantial prepayments to obtain covenant relief," Orsky wrote in a note. "We do not believe that ATAH is in a position to make such prepayments."

ATA, the largest carrier at Chicago's Midway International Airport, has been cutting costs aggressively in the last year to cope with falling fares, soaring jet fuel prices and declining demand for its military charter flights.

ATA in May became the first low-cost carrier to ask its crews to postpone a pay raise. It asked its pilots and flight attendants to postpone scheduled pay raises in 2004 and 2005. The airline's pilots have agreed to $43 million in concessions over two years, but its flight attendants recently rejected a request for $8.9 million in pay givebacks.

The discount carrier in February closed a deal with bondholders that allowed it to exchange new notes and cash for $300 million of old debt, narrowly averting bankruptcy.

"They may come back to bondholders for some kind of concessions to try and stave off a bankruptcy this time," Orsky said. "They will do whatever they can to avoid a bankruptcy and that's just one more lever they can pull."

In an effort to fight the competition and increase revenue, ATA plans to launch business-class seating this month and said it might begin service to Europe next year. "That sounds great, but I don't think that's going to save the company," Orsky said

 

[lowecur]

testing