Ata

[MDP727]

What's everyones predictions for ATA?

 

[Heavy Set]

What's the latest info?

 

[FlyBoeingJets]

I know the CASM is just above JetBlue. But the planes are bigger and loads can vary.

Loans will be redone. We delayed new 737-800 deliveries and got some used 757s. I personally think its a smart move because lease rates on the 757 are not as firm as those on the popular 737NGs. Don't know the specifics though.

We just started picking up more military flying with the L1011 too. Every year we do less and less charter work (as a percentage of revenue). The L1011 fleet is down to 6.


Prediction?? We're going to be around for at least a few more years. If our business plan remains in style another 30 is possible.

 

[storminpilot]

Here is some new info about them

http://www.indystar.com/articles/3/095158-6313-031.html

ATA extends deadline for key debt exchange
Airline says it must restructure $500 million in payments or face possible reorganization.

By Chris O'Malley
[email protected]
November 22, 2003

ATA Holdings Corp. is nearing a dangerous cloud as it flies through a storm of debt that threatens to slam it into bankruptcy reorganization early next year if talks with debtors don't progress.

The nation's 10th-largest passenger airline said Friday that it again has extended a deadline for bondholders to exchange $300 million in debt for new notes. It's the key part of a plan to restructure more than $500 million in bond and lease payments due over the next two years.

Looming largest is $175 million in bond debt coming due in August.

But a smaller cloud of debt, a cash payment on aircraft leases of $170.9 million, is due much sooner -- in the first quarter.

The latter is potentially just as perilous. Indianapolis-based ATA noted in its most recent 10-Q filing with the Securities and Exchange Commission that failure to make bond or lease payments would trigger default.

"If the company fails to make scheduled payments under the aircraft operating leases, the lessors may repossess the aircraft subject to the leases, effectively shutting down its operations," ATA said.

ATA had launched a virtual refleeting before Sept. 11, 2001 -- ordering dozens of new aircraft. Many of the leases were front-loaded: ATA would make higher payments during the early years of the leases. The cash was to be available partly from a maintenance holiday it would enjoy on new planes. The new Boeing 737s also are more fuel- efficient.

But few could have foreseen Sept. 11 and the industry nosedive that followed.

Last August, ATA struck new terms with the aircraft lease companies. The plan will reduce to about $110 million of the $171 million in lease payments due in the first quarter, said David W. Wing, executive vice president and chief financial officer.

"These lease payments are made at different times throughout the first quarter, so there is no particular point in time during which they bunch up," Wing said this week.

As manageable as the new lease terms appear for ATA, that tentative deal is contingent on restructuring its bond debt.

ATA has extended its bond exchange offer several times as it negotiates with a "small group" of noteholders who appear to be crucial in wrapping up the plan to restructure $300 million in notes for new debt.

The latest extension is until Dec. 5. As of Friday, only $41 million in notes had been tendered by bondholders.

"The restructuring is proceeding according to our expectations," Wing said. "Multiple extensions of exchange are typical for these types of transactions."

What bondholders are demanding is unclear, and ATA officials won't comment. But the company could be facing considerable pressure.

"If I were a bondholder, I would be saying, 'Look, I know we had 9/11, but you guys weren't that profitable before,' " said George Farra, a principal of Woodley Farra Manion Portfolio Management Inc. in Indianapolis.

In cases where companies have such liquidity problems, it's not uncommon for bondholders to seek a management change or to exert more control over daily operations.

That could spark a firestorm, given that ATA founder and Chairman George Mikelsons has increased his influence in recent years. Mikelsons also owns 70 percent of ATA shares.

Mikelsons has as leverage, however, the prospect of bondholders getting even less of a return if they do not accept ATA's new terms. Bankruptcy reorganization is messy, and the extreme of liquidation is especially unpalatable. "There's a surplus of planes" in the market, Farra said.

ATA also has turned profitable. It earned $7.7 million in the third quarter -- its second straight quarterly gain. The carrier also expects a profit for the full year.

Call Star reporter Chris O'Malley at 1-317-444-6081.

 

[FlyBoeingJets]

I should read the Indy star more often.

'04 will be a very tough environment, even with a good economy, as Ted and Song get their low cost operations into full swing.

This industry will continue to limp along with players worried about being around the next year and others (JB, Airtran, Southwest) wondering how much to expand.

I wonder how much debt AA and Delta can accumulate before they suffer medium term problems?

 

[General Lee]

Flyboeingjets,

Most of the losses in this last quarter for Delta were attributed to the continued start up costs of SONG. (Besides the one time charge of 281 Capts retiring all at once---something that was a fluke) A bill was passed in the house yesterday (??) that allows the airlines to delay paying on their pension plans for up to two years, which will save Delta about $180 million next year alone. I know the debt maturities at Delta for 2005 are about $500 million, and that will be covered if we pilots give up some pay (and I think we will), a long with the others (the stews just got hammered---so they have given their part). I think the debt problem is huge one, but managable if you have the cash to service it---like paying off your monthly interest on your credit card. I don't know the cash situation at ATA, but Delta has $2.9 billion---with $2.7 billion in unrestricted cash. But, who likes being in debt? Maybe an improvement in the economy and eventual lower fuel prices (??) will help everyone down the road....

Bye Bye--General Lee

 

[capt_zman]

General,

Maybe I'm off base here, but delaying pension payments for 2 years sounds like they are robbing peter to pay paul. What happens in 2 years when they have make those payments?

Just wondering

 

[General Lee]

Capt_zman,

Well, if the economy gets better and gives you more time to get the needed cash, wouldn't you do that? There is no penalty here for getting two more years---that sounds like a good deal. I read a post of the Dalpa.net that American would save something like $240 million, Delta $180 million, and Northwest $210 million just next year alone. I am sure United will save a lot too. It's like calling one of those credit help lines---they give you more time to pay off your payments---and this is all thanks to Congress. Also, a lot of the pension plans have a lot of their money in certain stocks, and as the DOW rises, the pension shortfall DECREASES. This gives us more time to decrease the shortfall. As long as we don't have any major terrorist strikes on airplanes here in the States, I think things will get better for all of us.

Bye Bye--General Lee