I love ATA, but does it seem to be in the press too much these days with regard to debt repayment and cash crunches? This kind of frequent press makes it SOUND like it's teetering on the edge... What's the plan for a new hub? Will MDW be the only fortress hub for the time being? Can anyone figure out what the future plan would be? Can anyone update their financial position? Is the situation as dire as the overly-dramatic press makes it out to be?
Good luck to all those ATA people out there! Read the article below:
ATA Air Seeks More Time to Repay Debt
Friday January 30, 7:29 pm ET
By Mark Jewell, AP Business Writer
Parent Co. of ATA Airlines Finalizing Agreement With Bondholders to Give It Time to Repay Debt
INDIANAPOLIS (AP) -- The parent company of ATA Airlines Inc. reached agreement with bondholders Friday, buying itself more time to repay debt and ease a cash crunch that threatened to bankrupt the nation's 10th largest carrier.
ATA Holdings Corp. said it had met conditions for completing a bond exchange offer. The conditions included gaining satisfactory consent from bondholders and completing amendments for leasing Boeing 737s and 757s that ATA had ordered before the Sept. 11 attacks.
ATA also said it had won approval from the federal Air Transportation Stabilization Board, which guarantees loans to airlines.
The low-fare carrier had faced the prospect of paying off $300 million in debt over two years while making aircraft lease payments.
Friday's announcement "will certainly give ATA a lot of breathing room to recover from the last couple years of industry difficulties," said Richard Bittenbender, an airline analyst at Moody's Investors Service.
ATA shares closed up 41 cents, or 3.3 percent, at $12.84 on the Nasdaq Stock Market.
Indianapolis-based ATA said last summer that it could not meet debt obligations unless it won more time to repay bondholders. The airline warned of a possible Chapter 11 bankruptcy filing unless it secured new repayment terms.
Under the bond swap, ATA has more time to repay $175 million in bond notes originally due in August and $125 million in notes that were due next year. In exchange for stretching out the repayments, bondholders receive more favorable interest and cash consideration terms.
ATA made its initial bond exchange offer Aug. 29, but was forced to revise the terms and extend the offer's deadline several times after failing to win enough bondholder support.
In October, ATA reported a third-quarter profit of $6.6 million -- the carrier's second consecutive quarterly profit following four straight quarters of losses totaling $185 million. It is scheduled to announce fourth-quarter earnings Monday.
ATA is North America's largest operator of charter flights, including those for the military. It is the nation's 10th-largest carrier based on revenue passenger miles -- a measure of the number of paying customers who travel one mile.
The 30-year-old carrier operates hubs for its scheduled service at Chicago's Midway Airport and Indianapolis International Airport. It has 7,200 employees.
American Trans Air: www.ata.com
Good luck to all those ATA people out there! Read the article below:
ATA Air Seeks More Time to Repay Debt
Friday January 30, 7:29 pm ET
By Mark Jewell, AP Business Writer
Parent Co. of ATA Airlines Finalizing Agreement With Bondholders to Give It Time to Repay Debt
INDIANAPOLIS (AP) -- The parent company of ATA Airlines Inc. reached agreement with bondholders Friday, buying itself more time to repay debt and ease a cash crunch that threatened to bankrupt the nation's 10th largest carrier.
ATA Holdings Corp. said it had met conditions for completing a bond exchange offer. The conditions included gaining satisfactory consent from bondholders and completing amendments for leasing Boeing 737s and 757s that ATA had ordered before the Sept. 11 attacks.
ATA also said it had won approval from the federal Air Transportation Stabilization Board, which guarantees loans to airlines.
The low-fare carrier had faced the prospect of paying off $300 million in debt over two years while making aircraft lease payments.
Friday's announcement "will certainly give ATA a lot of breathing room to recover from the last couple years of industry difficulties," said Richard Bittenbender, an airline analyst at Moody's Investors Service.
ATA shares closed up 41 cents, or 3.3 percent, at $12.84 on the Nasdaq Stock Market.
Indianapolis-based ATA said last summer that it could not meet debt obligations unless it won more time to repay bondholders. The airline warned of a possible Chapter 11 bankruptcy filing unless it secured new repayment terms.
Under the bond swap, ATA has more time to repay $175 million in bond notes originally due in August and $125 million in notes that were due next year. In exchange for stretching out the repayments, bondholders receive more favorable interest and cash consideration terms.
ATA made its initial bond exchange offer Aug. 29, but was forced to revise the terms and extend the offer's deadline several times after failing to win enough bondholder support.
In October, ATA reported a third-quarter profit of $6.6 million -- the carrier's second consecutive quarterly profit following four straight quarters of losses totaling $185 million. It is scheduled to announce fourth-quarter earnings Monday.
ATA is North America's largest operator of charter flights, including those for the military. It is the nation's 10th-largest carrier based on revenue passenger miles -- a measure of the number of paying customers who travel one mile.
The 30-year-old carrier operates hubs for its scheduled service at Chicago's Midway Airport and Indianapolis International Airport. It has 7,200 employees.
American Trans Air: www.ata.com
