Interesting ATA article

[General Lee]

Associated Press
ATA Shares Drop on Debt Warning
Tuesday July 29, 12:31 pm ET
By Mark Jewell, AP Business Writer
ATA Shares Drop on Debt Warning Despite Profitable Quarter


INDIANAPOLIS (AP) -- Shares of ATA Holdings Corp. dropped roughly 19 percent Tuesday afternoon as the parent of American Trans Air warned it would not be able to meet loan obligations and was in talks with lenders to restructure debt.
ADVERTISEMENT


ATA said its outstanding debt stood at $507.8 million as of June 30, and its current cash balance of $186 million and future revenue are not expected to be sufficient to meet debt obligations next year.

ATA said it has been unable to secure additional long-term financing, and was in "preliminary" talks with lenders to restructure debt.

ATA also said it has hired banks to evaluate options for changing repayment terms on $175 million in bond payments due next year.

ATA's obligations for interest and principal owed on debt, aircraft leases and other agreements are $326.7 million this year, $549.2 million in 2004 and $506.9 million in 2005.

The financial warning came as ATA reported a $43.3 million second quarter profit, or $2.68 per share. That compared with a loss of $55.4 million, or $4.92 per share in the same period a year earlier.

ATA's second-quarter profit included a $37 million cash infusion from the federal government, which is temporarily paying carriers' airport security costs.

The company reported quarterly revenue of $388.1 million, compared with $318.5 million in the same period a year ago.

ATA shares were down $1.85 at $8.07 on the Nasdaq Stock Market in Tuesday afternoon trading.

For the first six months of the year, the company reported net income of $32.2 million, or $1.97 per share, compared with a loss of $53.5 million, or $4.94 per share, a year earlier.

www.ata.com



Not every LCC is doing as well as Jetblue.

Bye Bye--General Lee

 

[General Lee]

Credit crunch hits ATA Holdings stock
By August Cole, CBS.MarketWatch.com
Last Update: 3:51 PM ET July 29, 2003

SAN FRANCISCO (CBS.MW) -- Shares of ATA Holdings fell almost 20 percent Tuesday after the carrier announced it is unable to meet debt and lease obligations next year and can't get any long-term financing.


Indianapolis-based ATA Holdings (ATAH: news, chart, profile), which made the disclosure in its second-quarter earnings announcement, lost $1.62 to $8.30.

With $507.8 million in outstanding debt, the company has $549.2 million in payments due in 2004. The company had $186 million in cash at the end of the second quarter. It is exploring its next moves with Morgan Stanley and Citigroup.

"We feel very confident we can demonstrate to all of our constituencies that we have the ability to generate profit through the low-cost business model we have," CFO David Wing told CBS MarketWatch.

With a lower credit rating after a Moody's downgrade in April, the company can't refinance its debt in the capital markets.

The company has a more than 100 percent debt-to-equity ratio.

Including $37.1 million in federal assistance to help with security costs, the airline earned $2.68 a share, or $55.9 million, with revenue of $388.1 million in the quarter. Both charter- and scheduled-service revenue rose.

Last year, the carrier lost $4.92 a share, or $59.3 million, with revenue of $318.5 million.

Fuel costs rose 33 percent to $68 million while labor costs rose 7.8 percent to $98.9 million. Cost per available seat-mile fell 30 percent to 6.2 cents as the carrier flew newer, more efficient aircraft and changed its mix of wide-body and narrow jets.




There's another one. I am not trying to pee on their cornflakes, I am just showing that not every LCC is doing great. This industry hasn't been kind to a lot of us. The promise of lower fares and new airplanes sometimes doesn't help.

Bye Bye--General Lee

 

[spinup]

Whoa, I thought things where going well over there.

 

[LAZYB]

Whoa, I thought things where going well over there.

Don't ask, don't tell...

 

[bigsky]

I was wondering about that because although they seem to be heading in the right direction I had seen an article about 3 months ago that listed ATA as the airline with the most debt to asset ratio.

 

[ataopsdave]

i was reading our infoline and it just said that they were going to renegotiate the leases and it looked like boeing and all the other lessors were going to do that for us. other than that we made almost 40 million dollars this quarter.

 

[FlyBoeingJets]

Originally posted by Lavdumper


There's another one. I am not trying to pee on their cornflakes, I am just showing that not every LCC is doing great. This industry hasn't been kind to a lot of us. The promise of lower fares and new airplanes sometimes doesn't help.

Bye Bye--Lavdumper

Lavdumper,

You posted this because misery loves company. If you look a little closer you will see that ATA made money before the government handout---unlike Delta. While Delta is currently strong financially, that won't last long with the money you continue to lose and no plan in place to fix it (Song doesn't count).

On the bright side, I think you may be able to pull it together if you can get enough of the money grabbing senior Captains and management team out the door.

I truly wish you well in that endeavor.

 

[Slug]

Lavdumper?

I don't know about my eyesight, but I think my screen reads the infamous, Delta horn blowing General Lee as the poster of that quote. I'm not sure LDumper has even weighed in on this one. Just an observation.

 

[flyhard]

General Lee,

How many pilot's does Delta have furloughed? Just wondered because ATA has ZERO. Keep that in mind when your number comes up and you are trying to find that long lost ATA buddy to give you a recommendation for a job.

 

[UM#1]

This is not new news but is for those who dont know much about ATA. ATA had to publicly announce this along with the quarterly results that the debt is an issue regarding making the payments given the cash on hand. It sounds worse than it is, ATA actually has an advantage to restructuring and refinancing this debt. First, they are one of the few Major airlines making an operating and overall profit. (others that did post a profit this quarter only did thanks to the govt refund), Boeing, GE Capital, and ILFC are big investors in ATA, if the banks Ch7 ATA they would just park 50+ airplanes with the already 100's in the desert and not get anything for them at all, money is cheap right now, ATA is growing thus profits will increase even more thus proving to the banks that ATA is a viable entity in the LLC market and Airline industry as a whole, George has a legacy to maintain and he will do what is necessary to keep the place running, and if the banks will allow United to burn thru millions a day and over a billion a year and not Ch.7 them then there's definitely hope for someone who is making money.......