Great News for SWA and ATA

[T45Flyer]

Southwest CEO says ATA deal to generate $100 mln

NEW YORK, March 23 (Reuters) - Southwest Airlines Co. expects to reap $100 million in additional revenue from a code-sharing deal with ATA Holdings Corp.'s bankrupt ATA Airlines, Southwest's CEO said on Wednesday.

Gary Kelly made the estimate, which was more than double earlier estimates the low-cost airline had given for additional revenue of $25 million to $50 million, during a transportation conference sponsored by Goldman Sachs.

In addition to the code-sharing deal, the revenue will be generated by Southwest's addition of six new gates at Chicago's Midway Airport as well as the benefits to the airline of ATA's reducing service from the city, a Southwest spokeswoman said.



03/23/05 14:30 ET

 

[Jetjockey]

Look at that........thier investment paid off in 1 year. You got to admit, that was one swift deal they put together.

5 birds with 1 stone.

1) prevent AirTran from setting up camp in MDW.
2) gain 6 gates.
3) decrease competition by code-sharing with ATA
4) increase revenue by code-sharing
5) own 27% of a post- chapter 11 ATA

I wonder if an outright purchase of remaining assets will ever come to be? The increase from revenue alone would pay for the deal. A Southwest with international overwater capability would be every major airline's worst nightmare!

 

[furloughfodder]

A Southwest with international overwater capability would be every major airline's worst nightmare!

...and every passengers worst nightmare too!

 

[xanderman]

Southwest CEO says ATA deal to generate $100 mln

NEW YORK, March 23 (Reuters) - Southwest Airlines Co. expects to reap $100 million in additional revenue from a code-sharing deal with ATA Holdings Corp.'s bankrupt ATA Airlines, Southwest's CEO said on Wednesday.

Gary Kelly made the estimate, which was more than double earlier estimates the low-cost airline had given for additional revenue of $25 million to $50 million, during a transportation conference sponsored by Goldman Sachs.

In addition to the code-sharing deal, the revenue will be generated by Southwest's addition of six new gates at Chicago's Midway Airport as well as the benefits to the airline of ATA's reducing service from the city, a Southwest spokeswoman said.



03/23/05 14:30 ET

Where's the great news for ATA?!? All I see is SWA...

 

[Jetjockey]

they seem to come back, and by the revenue numbers.....i'd say they like what they get on SWA.

 

[SWA/FO]

Is that for the year? Or quarter?

I heard we are making $60,000 per day on the code share. But it must be more then that?

 

[skykid]

A Southwest with international overwater capability would be every major airline's worst nightmare!

Don't think so. That's when they get out of their element.

 

[HalinTexas]

Don't think so. That's when they get out of their element.

It's not about "their element." With a codeshare, they don't have to manage the operation. ATA will do that. ATA doesn't have to market anything, of course they never have, and that's been our problem.

The biggest problem will be reservations, PNR's and transfers. SWA employees don't know how to do this stuff, and there's not enough ATA people that know how to do it, either.

The next logical evolution for SWA is international/overwater ops. They're working on the overwater, but Int'l ops. and ETOPS are a different matter. It would cost them quite a bit more than $117M and years to do it, whereas, ATA gives them turnkey operations. Of course, this is secondary to locking up MDW and all the collateral benefits the codeshare brings.

If/when ATA emerges from Ch. 11, there will be growth in the codeshare. There will be growing pains, stumbles, and a few raw nerves along the way as well.

But then again, absolutely nothing could happen.

 

[Flash]

What about the SWA pref interviews? How many pilots of ATA who were laid off have received a job?


Oh wait, interviews don't equal hiring.

 

[acbarney]

3 that I know of (out of 32 eligible so far)

 

[skykid]

Halin,

No, you have taken it out of context. Jetjockey was talking about an outright purchase of remaining assets.

 

[Metro752]

Theres something about getting 737 classics and 767s

 

[FlyBoeingJets]

The biggest problem will be reservations, PNR's and transfers. SWA employees don't know how to do this stuff, and there's not enough ATA people that know how to do it, either. The next logical evolution for SWA is international/overwater ops. They're working on the overwater, but Int'l ops. and ETOPS are a different matter. It would cost them quite a bit more than $117M and years to do it, whereas, ATA gives them turnkey operations. Of course, this is secondary to locking up MDW and all the collateral benefits the codeshare brings.

I don't know if SWA management will do it, but I agree. The international stuff will start small and is risky. ATA already has the ability to make it happen and SWA would have to spend too much to go it alone. ATA will bear most of the risk during startup and both ATA and SWA can share in the success later.

 

[DX Rick]

they seem to come back, and by the revenue numbers.....i'd say they like what they get on SWA.

Like I say every time after I eat at McDonalds "I'm never going to eat that cr*p again"
It just happens to be the cheapest and most convenient.

 

[Cyclone]

plans to fly over water isn't necessarily due to international plans...don't think it will happen personally

I believe it's just cost savings...it will save a lot of fuel on a lot of flights...NE to FLA and SW to FLA...all go more direct

 

[seefive]

i know 1 friend who is in the SWA pool. ATA has continued to delay his furlough from the original feb date.

 

[HalinTexas]

More furloughed ATA pilots have gone to Trans Meridian (11, I think) than have been hired at SWA. I think more have gone to Airtran as well.

Furloughs are coming. It's just a matter of sorting out the displaced CA's.

 

[thebluto]

3 that I know of (out of 32 eligible so far)

I know of at least one ATA FO that went to FedEx. Where did the 32 number come from? Is that the # that have 1000 Turbine PIC?

 

[njcapt]

I know of at least one ATA FO that went to FedEx. Where did the 32 number come from? Is that the # that have 1000 Turbine PIC?

Those are the number of furloughed ATA pilots granted preferential interviews at SWA. They had to have 1000 PIC turbine to get the interview - just like everybody else. Also, out of 20 or so ATA Captains that have interviewed there in the past year, I am unaware of a single one who got hired. They received a lot of heat in the interview over the apparent 'desertion' of their troubled airline.