blueridge71
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Atlantic Coast Airlines To Exit Delta Connection Program
Dulles, VA, (April 6, 2004) – Atlantic Coast Airlines Holdings, Inc. (ACA) (Nasdaq: ACAI) today announced it has received formal notification from Delta Air Lines that it will end its fee-per-departure agreement with ACA by invoking its right under the Delta Connection Agreement to terminate without cause upon 180 days notice. ACA has served in partnership with Delta since August 2000, and currently operates a fleet of 30 Fairchild Dornier 328JET aircraft from Delta’s hubs in Cincinnati and Boston.
In order to prepare for the transition of ACA out of the Delta program, Delta also announced that effective July 2004, it will consolidate the entire ACA/Delta Connection operation in Cincinnati by moving the 10 328JET aircraft currently flown by ACA at Delta’s Boston hub to Cincinnati, as well as discontinuing ACA flights from New York.
ACA/Independence Air Chairman and Chief Executive Officer Kerry Skeen said, “We had anticipated Delta’s decision for some time and understand their reasons for ending our code share relationship. Under the terms of our agreement, we now have the right to require Delta to assume the leases on some or all of the 30 328JETs used in the Delta program. We plan to use at least some of the time we have during the notice period to review and evaluate our options for the 328JETs before finalizing any decisions. If we ultimately elect to require Delta to assume some or all of the leases, we would anticipate developing a transition plan similar to the one we just completed with United.”
He added, “Our decision to become an independent low-fare airline means that our focus going forward will not be on fee-per-departure relationships that rely on other companies’ brands and business models. We believe that this decision by Delta will significantly simplify our overall operation and allow us to focus 100% of our management and employee attention on our new Independence Air service. The benefit to our customers is that the entire company can now be based solely on providing excellent low-fare service under our own Independence Air brand from Washington and Northern Virginia to destinations across America.”
Low-fare airline Independence Air will serve Washington Dulles International Airport with a schedule of over 300 daily departures this summer—making it the largest low-fare hub in America. Inaugural service on Independence Air is scheduled for June 16, 2004.
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Atlantic Coast Airlines To Exit Delta Connection Program
Page 2 of 2
Under the terms of ACA’s Delta Connection Agreement, if Delta terminates without cause, ACA has the right during the 180-day notification period to require Delta to assume the leases on some or all of the 30 328JET aircraft used in the company’s Delta Connection operation. While the obligations on these aircraft leases would be assigned to Delta, ACA may not be able to extinguish its obligations under the leases unless Delta or its assignee meet certain financial conditions at the time Delta becomes obligated to assume the leases. Delta currently does not meet those financial conditions.
Dulles, VA, (April 6, 2004) – Atlantic Coast Airlines Holdings, Inc. (ACA) (Nasdaq: ACAI) today announced it has received formal notification from Delta Air Lines that it will end its fee-per-departure agreement with ACA by invoking its right under the Delta Connection Agreement to terminate without cause upon 180 days notice. ACA has served in partnership with Delta since August 2000, and currently operates a fleet of 30 Fairchild Dornier 328JET aircraft from Delta’s hubs in Cincinnati and Boston.
In order to prepare for the transition of ACA out of the Delta program, Delta also announced that effective July 2004, it will consolidate the entire ACA/Delta Connection operation in Cincinnati by moving the 10 328JET aircraft currently flown by ACA at Delta’s Boston hub to Cincinnati, as well as discontinuing ACA flights from New York.
ACA/Independence Air Chairman and Chief Executive Officer Kerry Skeen said, “We had anticipated Delta’s decision for some time and understand their reasons for ending our code share relationship. Under the terms of our agreement, we now have the right to require Delta to assume the leases on some or all of the 30 328JETs used in the Delta program. We plan to use at least some of the time we have during the notice period to review and evaluate our options for the 328JETs before finalizing any decisions. If we ultimately elect to require Delta to assume some or all of the leases, we would anticipate developing a transition plan similar to the one we just completed with United.”
He added, “Our decision to become an independent low-fare airline means that our focus going forward will not be on fee-per-departure relationships that rely on other companies’ brands and business models. We believe that this decision by Delta will significantly simplify our overall operation and allow us to focus 100% of our management and employee attention on our new Independence Air service. The benefit to our customers is that the entire company can now be based solely on providing excellent low-fare service under our own Independence Air brand from Washington and Northern Virginia to destinations across America.”
Low-fare airline Independence Air will serve Washington Dulles International Airport with a schedule of over 300 daily departures this summer—making it the largest low-fare hub in America. Inaugural service on Independence Air is scheduled for June 16, 2004.
(-more-)
Atlantic Coast Airlines To Exit Delta Connection Program
Page 2 of 2
Under the terms of ACA’s Delta Connection Agreement, if Delta terminates without cause, ACA has the right during the 180-day notification period to require Delta to assume the leases on some or all of the 30 328JET aircraft used in the company’s Delta Connection operation. While the obligations on these aircraft leases would be assigned to Delta, ACA may not be able to extinguish its obligations under the leases unless Delta or its assignee meet certain financial conditions at the time Delta becomes obligated to assume the leases. Delta currently does not meet those financial conditions.
