Chicago Trib -- ATA Asset Prediction

[storminpilot]

http://www.chicagotribune.com/business/chi-0412120218dec12,1,1644959.storyhttp://www.chicagotribune.com/business/chi-412120218dec12,1,1644959.story

AMERICA WEST AIRLINES: Airline drops out of bidding for ATA's Midway gates

Written by William Sluis from staff and wire reports
Published December 12, 2004

America West Airlines dropped out of the bidding for the 14 gates at Midway Airport operated by financially troubled ATA Airlines, leaving only two carriers expected to vie for them.

AirTran Airways has a tentative deal worth about $90 million to purchase parts of ATA, including taking over most of its Midway operations. Southwest Airlines, which has 19 of Midway's 43 gates, is expected to make a rival offer for at least some of ATA's gates.

America West parent America West Holdings Corp. had indicated it might buy all of Indianapolis-based ATA, including assuming control of its Midway gates. But the Phoenix-based airline was unable to work out affordable lease terms with ATA's aircraft lessors.

A bankruptcy court in Indianapolis will look at sealed bids for part or all of ATA, which sought Chapter 11 protection in October. The airline and its creditors will review the offers, and the court could rule Thursday.

Ultimately, going ahead with efforts to acquire ATA did not make economic sense, said Doug Parker, America West's chairman and CEO.

"We have stated from the beginning of this process that we would not proceed with any transaction that would put undue risk on America West's employees, customers or stockholders," Parker said.

"While we believe there is some value in a combined America West/ATA operation, we do not believe the potential value justifies the anticipated cost," he said.

Watch for: The bankruptcy court to give AirTran most of the ATA assets it is seeking, but Southwest likely will pick up a half-dozen gates to extend its dominance at Midway.

 

[FlyBoeingJets]

http://www.chicagotribune.com/business/chi-0412120218dec12,1,1644959.story



Written by William Sluis from staff and wire reports
Published December 12, 2004

...Southwest Airlines, which has 19 of Midway's 43 gates, is expected to make a rival offer for at least some of ATA's gates...

Mr. Sluis is right on top of things. I guess he hasn't had the time to review Southwest's offer announced on Friday.

Airtran folks,

I'm thinking Airtran can still experience impressive growth at MDW with fewer than 14 gates. I'm thinking 9 or 10 would make a very good sized operation.

How is Airtran going to focus on DFW if they get 14 gates at MDW? Is Airtran giving up on making DFW a focus?

How many years did it take for SWA to get more than 10 gates at MDW?

 

[mnboyev]

Well... we all knew this would get interesting.. I heard a rumor that an ATA guy was already in class at AirTran.

I understand a merger would have been a much sweeter deal for the labor groups.

Looks like Southwest's bid is and attempt to mess up AirTrans plans? Cant blame em... good move.. The clock is ticking...

Is there any fortune tellers out there ?

 

[717capt]

We have been told by our upper management numerous times and they have even stated in public at airline conferences (Raymond James, etc..) that the proposal put forth in the bankruptcy court and with ATA is "all or nothing". I had Bob Farnaro (our president and COO) on our flight a few weeks back and he re-iterated to me the same thing. All or nothing. When I asked him just what that meant he went into details... All 14 gates at MDW not 8 or 9 but all 14... All 19 slots at LGA and 2 gates. All 8 slots at DCA and 1 gate. a codeshare with ATA from January till June of '05 and other smaller assets. He also said that ATA is leaving MDW regardless of what happens. (This of course was a few weeks ago when the Southwest proposal was not made public. Looks like their proposal would keep ATA at MDW). Anyway he stated that ATA is leaving MDW and if we do not get the "all or nothing" deal that we would still take an additional 2-3 gates on top our gate their and operate MDW as a focus city. This has already been announced in terms of new flights to Florida in January. These new flights have nothing to do with the ATA deal. Just adding flights.
I asked him if their was a plan B in case the proposal fell through. He said, and to no surprise by the way, that there was a plan B, C, D and E.
We are taking somewhere in the neighborhood of 25-30 airplanes next year. These numbers change of course depending on who you talk to, but we need somewhere to park them.
I asked him if plan B was the gates that would become available at DFW with Delta shutting down the hub. He said that DFW is not on the "radar screen" (what is it with airline executives, that they like using that metaphor so much?) for next year. That AA would put up a helatious fight and we just dont want to get into a pissing match with a much stronger and larger AA at DFW. Not at this time anyway.
He did take me into his confidence and told me what they are looking at as far as a plan "b" and "c" as far as hubs if MDW falls through.
Sorry that secret will remain between myself, my FO for that flight and Mr. Farnaro. Feel free to guess though.

On a personal note. I have had the pleasure of flying with quite a few number of new hires here at AirTran that had previously been at ATA. I can tell you all that there is not a finer group of professional and friendly people around. I wish lots of luck and prosperity to all the ATA folks. I sincerely, as well as my fellow employees at AirTran, hope that everything works out for you folks.

Best of luck