controlledburn
Member
- Joined
- Apr 27, 2004
- Posts
- 9
You have got to be S####### me!!!!!!!!!!!!!
In one month ATA successfully destroyed the only piece of the business that was making money for them. They took a highly efficient commuter that used to fly 100,000 passengers a month into an inefficient mess. They announced the closing of CEA ( know there is a rocket scientist for you ) which means the certificate is worth nothing once they stop flying. They could have possibly sold them off as an asset ... gosh, golly, gee aren't you bankrupt and don't you need MONEY!!!....In the last five years they (ATA) thwarted every effort to expand the regional even as late as October CEA had a deal for 13 Rj's that they nixed... And now guess what... they are going to retrench into MDW. Would you like some passenger feed? Sorry, you wrecked that..Good luck ATA you are going to need it. What happens if SWA decides to pull the plug on the codeshare? Another marathon session? Ahhh.. what's the use stick a fork in it it is done. Oh and by the way maybe layoff the marathon sessions I can't stand the news that comes out of them. Good luck to all the ATA crewmembers...
ATA's cash drain fueled scale-back
Ticket demand solid, but rivals' low fares on routes doomed
airline's Indianapolis expansion.
By Ted Evanoff
ted.evanoff@i...
January 30, 2005
ATA Airlines was selling loads of tickets when senior executives met
Jan. 20 in the West Washington Street headquarters near the airport.
What began as the routine weekly review of the bankrupt carrier's
finances soon turned to alarm. Selling tickets as low as $49 as it
tried to match prices with Northwest, Southwest and other major
carriers, ATA was bleeding cash.
ATA execs -- including chairman and founder J. George Mikelsons, co-
chief restructuring head John Denison, finance chief Gilbert Viets,
strategic planner Sean Frick and flight operations head John Graber -
- planned a meeting to consider the cash drain.
Out of that marathon session last weekend came the decision,
revealed Wednesday, to slash Indianapolis service and focus on
Chicago Midway.
"We looked forward and did not see Indianapolis being profitable,"
Frick said. "In our current cash position, we can't afford to lose
money waiting for a market to turn around."
ATA's retreat from Indianapolis International Airport hands its
rivals here an opportunity.
Northwest and Southwest both are expanding Indianapolis service and
could absorb most of the roughly $100 million in annual ticket
revenue that ATA will leave behind.
For ATA, the decision to regroup at Chicago gives it time to pare
costs and cut hundreds of jobs. It will refocus as a Midway-oriented
carrier, this time buoyed by a new business alliance with Southwest,
which is taking a 27.5 percent stake in ATA.
ATA will haul Southwest passengers on 11 Midway routes the Dallas
carrier does not fly now.
Called a code-share arrangement, the deal could pump $50 million a
year in revenue into ATA and finally make it profitable. ATA is
expected to report a 2004 loss of more than $120 million out of $1.4
billion revenue.
And if it's satisfactory to Southwest, ATA someday could code-share
to Hawaii on flights originating on the West Coast and haul
Southwest travelers to Europe by introducing regular ATA trans-
Atlantic flights from Midway.
"This is a very interesting strategy by Southwest," said aviation
analyst Bill Swelbar, president of Reston, Va.-based Eclat
Consulting. "It gives them access to important points they don't
have access to today."
Whether it will generate enough revenue to sustain ATA, however,
remains to be seen.
The new plan calls for scaling back Midway to 47 daily flights from
last year's peak of 98. Analysts estimate this could trim an
estimated $250 million a year from ATA's annual Midway operating
revenue, projected at $750 million in 2004.
Analysts say it would have been nearly impossible to make up the
Midway shortfall in Indianapolis even had ATA gone ahead with its
expansion here.
In a plan proposed in December as part of the effort to emerge from
bankruptcy, ATA aimed to triple flights from here to 54 by April.
It was this proposal that was ditched in the marathon meeting Jan.
23, when executives decided to pare Indianapolis service to four
flights. The announcement surprised few aviation analysts.
"Mikelsons may believe he owns Indianapolis," Swelbar said,
referring to the ATA founder, "but nobody owns anything."
ATA executives singled out Northwest, saying the Minneapolis-based
carrier's aggressive fares on a wave of new flights are a reason for
ATA's decision to scale back in Indianapolis.
Northwest plans to triple nonstop flights from Indianapolis to 49 by
April, which would make it the leading Indianapolis carrier.
"Our expansion in Indianapolis has always been about Northwest and
our customers. It was never about other carriers," said Northwest
spokesman Kurt Ebenhoch, noting the airline announced the
Indianapolis expansion two years ago as part of a so-called
Heartland plan adding 100 flights in 25 Midwestern cities.
ATA had about $150 million in Indianapolis ticket revenue last year,
projected analyst Adam Zirkin of RBC Capital Markets of New York.
That's the lion's share of the $560 million Indianapolis airline
market.
But ATA was hard-pressed to generate profits on Indianapolis flights
against fare-slashing rivals able to endure losses longer, analysts
say.
"Indianapolis is like Kansas City and Colorado Springs," said Elise
Eberwein, a vice president of America West in Tempe, Ariz. "These
second-tier markets can't support any more than 10 flights" daily by
one airline's big jets.
Active competition
Even as ATA reached a decision last November to ramp up service,
Northwest was adding low-fare flights, low-fare line AirTran was on
the way, and discount carriers Southwest, America West, Independence
and Frontier already were in Indianapolis.
On Friday, ATA employees gathered for an explanation of what has
gone wrong here.
According to employees who attended one session with Graber and
Douglas Yakola, senior vice president for customers and ground
operations, the problem became clear at the meetings that began Jan.
22.
ATA investor relations specialist Roxanne Butler generally confirmed
the employees' account.
While executives had been satisfied by the volume of tickets sold,
Denison, a retired Southwest executive who became ATA's co-chief
restructuring officer this month, asked at the weekend
meeting, "What do you sell the seats for?" and raised the question
of profits, the employees said.
Looking at the sales and operating cost figures, the executives
concluded ATA was bleeding cash in Indianapolis, but selling triple
the number of tickets in Chicago that they had expected.
Three days later, ATA announced the Indianapolis expansion was being
scrapped and the jets redeployed to Chicago, where more flights are
being added on some routes, including to New York's LaGuardia.
Call Star reporter Ted Evanoff at (317) 444-6019.
In one month ATA successfully destroyed the only piece of the business that was making money for them. They took a highly efficient commuter that used to fly 100,000 passengers a month into an inefficient mess. They announced the closing of CEA ( know there is a rocket scientist for you ) which means the certificate is worth nothing once they stop flying. They could have possibly sold them off as an asset ... gosh, golly, gee aren't you bankrupt and don't you need MONEY!!!....In the last five years they (ATA) thwarted every effort to expand the regional even as late as October CEA had a deal for 13 Rj's that they nixed... And now guess what... they are going to retrench into MDW. Would you like some passenger feed? Sorry, you wrecked that..Good luck ATA you are going to need it. What happens if SWA decides to pull the plug on the codeshare? Another marathon session? Ahhh.. what's the use stick a fork in it it is done. Oh and by the way maybe layoff the marathon sessions I can't stand the news that comes out of them. Good luck to all the ATA crewmembers...
ATA's cash drain fueled scale-back
Ticket demand solid, but rivals' low fares on routes doomed
airline's Indianapolis expansion.
By Ted Evanoff
ted.evanoff@i...
January 30, 2005
ATA Airlines was selling loads of tickets when senior executives met
Jan. 20 in the West Washington Street headquarters near the airport.
What began as the routine weekly review of the bankrupt carrier's
finances soon turned to alarm. Selling tickets as low as $49 as it
tried to match prices with Northwest, Southwest and other major
carriers, ATA was bleeding cash.
ATA execs -- including chairman and founder J. George Mikelsons, co-
chief restructuring head John Denison, finance chief Gilbert Viets,
strategic planner Sean Frick and flight operations head John Graber -
- planned a meeting to consider the cash drain.
Out of that marathon session last weekend came the decision,
revealed Wednesday, to slash Indianapolis service and focus on
Chicago Midway.
"We looked forward and did not see Indianapolis being profitable,"
Frick said. "In our current cash position, we can't afford to lose
money waiting for a market to turn around."
ATA's retreat from Indianapolis International Airport hands its
rivals here an opportunity.
Northwest and Southwest both are expanding Indianapolis service and
could absorb most of the roughly $100 million in annual ticket
revenue that ATA will leave behind.
For ATA, the decision to regroup at Chicago gives it time to pare
costs and cut hundreds of jobs. It will refocus as a Midway-oriented
carrier, this time buoyed by a new business alliance with Southwest,
which is taking a 27.5 percent stake in ATA.
ATA will haul Southwest passengers on 11 Midway routes the Dallas
carrier does not fly now.
Called a code-share arrangement, the deal could pump $50 million a
year in revenue into ATA and finally make it profitable. ATA is
expected to report a 2004 loss of more than $120 million out of $1.4
billion revenue.
And if it's satisfactory to Southwest, ATA someday could code-share
to Hawaii on flights originating on the West Coast and haul
Southwest travelers to Europe by introducing regular ATA trans-
Atlantic flights from Midway.
"This is a very interesting strategy by Southwest," said aviation
analyst Bill Swelbar, president of Reston, Va.-based Eclat
Consulting. "It gives them access to important points they don't
have access to today."
Whether it will generate enough revenue to sustain ATA, however,
remains to be seen.
The new plan calls for scaling back Midway to 47 daily flights from
last year's peak of 98. Analysts estimate this could trim an
estimated $250 million a year from ATA's annual Midway operating
revenue, projected at $750 million in 2004.
Analysts say it would have been nearly impossible to make up the
Midway shortfall in Indianapolis even had ATA gone ahead with its
expansion here.
In a plan proposed in December as part of the effort to emerge from
bankruptcy, ATA aimed to triple flights from here to 54 by April.
It was this proposal that was ditched in the marathon meeting Jan.
23, when executives decided to pare Indianapolis service to four
flights. The announcement surprised few aviation analysts.
"Mikelsons may believe he owns Indianapolis," Swelbar said,
referring to the ATA founder, "but nobody owns anything."
ATA executives singled out Northwest, saying the Minneapolis-based
carrier's aggressive fares on a wave of new flights are a reason for
ATA's decision to scale back in Indianapolis.
Northwest plans to triple nonstop flights from Indianapolis to 49 by
April, which would make it the leading Indianapolis carrier.
"Our expansion in Indianapolis has always been about Northwest and
our customers. It was never about other carriers," said Northwest
spokesman Kurt Ebenhoch, noting the airline announced the
Indianapolis expansion two years ago as part of a so-called
Heartland plan adding 100 flights in 25 Midwestern cities.
ATA had about $150 million in Indianapolis ticket revenue last year,
projected analyst Adam Zirkin of RBC Capital Markets of New York.
That's the lion's share of the $560 million Indianapolis airline
market.
But ATA was hard-pressed to generate profits on Indianapolis flights
against fare-slashing rivals able to endure losses longer, analysts
say.
"Indianapolis is like Kansas City and Colorado Springs," said Elise
Eberwein, a vice president of America West in Tempe, Ariz. "These
second-tier markets can't support any more than 10 flights" daily by
one airline's big jets.
Active competition
Even as ATA reached a decision last November to ramp up service,
Northwest was adding low-fare flights, low-fare line AirTran was on
the way, and discount carriers Southwest, America West, Independence
and Frontier already were in Indianapolis.
On Friday, ATA employees gathered for an explanation of what has
gone wrong here.
According to employees who attended one session with Graber and
Douglas Yakola, senior vice president for customers and ground
operations, the problem became clear at the meetings that began Jan.
22.
ATA investor relations specialist Roxanne Butler generally confirmed
the employees' account.
While executives had been satisfied by the volume of tickets sold,
Denison, a retired Southwest executive who became ATA's co-chief
restructuring officer this month, asked at the weekend
meeting, "What do you sell the seats for?" and raised the question
of profits, the employees said.
Looking at the sales and operating cost figures, the executives
concluded ATA was bleeding cash in Indianapolis, but selling triple
the number of tickets in Chicago that they had expected.
Three days later, ATA announced the Indianapolis expansion was being
scrapped and the jets redeployed to Chicago, where more flights are
being added on some routes, including to New York's LaGuardia.
Call Star reporter Ted Evanoff at (317) 444-6019.
