Interesting ATA article

[General Lee]

UM#1,

There are many ways to show losses. One time charges, for example, are a great way to "get rid of all the bad" when times are bad, and then out of nowhere---you have huge profits. That is how management pressures employees----show the bad, cut the wages, then show a profit, and then grant bonuses to management. One of my good friends who went to the Wharton Business School pointed that out to me. We actually offered to go through negotiations---and we didn't have to until 2005. We sat down and management only wanted to extract pay from our contract--even though the other groups have no union or contract. Management was looking to gut an expensive contract that was negotiated fairly. We know times aren't great right now, but our view was "everyone--including management--should share in the cost cuts." Management didn't like this at all---and we left negotiations. If Delta really needed the cash or wanted to improve their balance sheet right now--they would have accepted. If we, the pilots, gave an immediate 10%---apparently that would have saved Delta about $180 million in the first year, which would probably help that supposed $200 million loss projected by them next quarter. If everyone gave 10%, we might show better results and help the stock for you--the investor. Why would management say no to the possiblity of $270 million from us--(15% cuts)? Maybe they just wanted to take advantage of the "bleak" situation? We negotiated fairly this contract. We don't mind helping when times are tough, but we would like to have it back when times are good.



Flyboeingjets,

I apologize. I can see how my posting two articles with bad news might be seen as rubbing it "in your face." I initially read them and was stunned because I really wasn't aware of the problems.

Bye Bye--General Lee

 

[UM#1]

General Lee,
I see now, thanks for taking the time to explain, not being on the "inside" of things you only have to go by what articles and such you can get your hands on. Keep us updated, I enjoy reading your posts.

 

[VampyreGTX]

ATA increasing service at MDW

ATA to increase Midway flights

By Robert Manor
Tribune staff reporter
Published July 29, 2003

While industry giants such as like American Airlines and United Airlines are cutting flights, ATA Airlines announced Monday that it will increase its weekly departures from Midway Airport to 568 from 513 by the end of the year.

The airline is adding flights in 12 markets, including Boston, Newark, Philadelphia, San Francisco and Ft. Myers, Fla. The carrier will also will increase flight frequencies to Las Vegas, Denver and San Juan, Puerto Rico, as well as and will add new seasonal service to Ixtapa/Zihuatanejo, Mexico.

The additional routes will solidify ATA's place as the largest carrier at Midway. The airline claims about 44 percent of Midway's business and 10 percent of all of Chicago's air travel.

"Like most of the low-fare carriers, their numbers have been steadily increasing," said Monique Bond, spokeswoman for the Chicago Department of Aviation.

Industry analysts say airlines such as like ATA, JetBlue Airways and Southwest Airlines are taking routes abandoned by the larger air carriers. While all carriers have been hurt by the Sept. 11 attacks and the weak economy, the smaller low-cost airlines have found a way to keep growing.

ATA started out serving tourist destinations such as like Florida and Mexico, and leisure travel remains its main business. But the flights added Monday include commercial centers such as like Boston and Philadelphia.

John Pincavage, an aerospace analyst with Pincavage & Associates, said ATA is trying to lure business travelers, not just recreational passengers.

"They are adding more service to attract a broader spectrum of travelers," Pincavage said. "It's going to be interesting to see how that works."

Monday's additions continue ATA's has been growth ing at Midway for years. The airline says it has more than doubled the number of flights in the past five years. And its new fleet and low fares have helped it win business travelers.

Rick Larsen, vice president of marketing, estimates that 40 percent of ATA's passengers are now traveling on business.

"The business traveler understands that we serve more than just leisure markets," Larsen said. "We are serving 40 markets out of Midway."

ATA began in 1972 as a charter operation with no fixed schedule. Its customers were recreational travelers on inexpensive junkets.

In 1981, it won certification as a common- air carrier. In 1992, the Indianapolis company began scheduled service out of Midway, which now accounts for the bulk of its flights.

ATA is not immune to the downturn in the airline industry. The company lost nearly $11 million in the first quarter of this year. It is scheduled to report its second-quarter earnings Tuesday.

But industry observers say ATA and the other low-fare carriers should are going to return to profitability faster than the bigger airlines.

Frank Werner, associate professor of finance at Fordham University Business School, said ATA can operate its planes more cheaply than full-service carriers such as like American.

One way to measure cost is the expense of flying one seat one mile.

"ATA's cost is only 7.4 cents," Werner said. "The major [airlines] are running around 11 or 12 cents."

A difference of 4 cents may not sound like much. But multiply that by the number of seats on a plane, and the multiply that by the thousands of miles a the plane flies each day, and it grows to a large sum.

Werner said ATA is able to keep costs down in part because its fleet has an average age of just 2.2 years.

"That's a very young fleet, which translates into a very efficient fleet," Werner said. "There is less to break down."

ATA says that because its aircraft have new, and efficient engines, they consume up to 35 percent less fuel than older planes.

Even ATA's legacy of serving vacation travelers contributes to its low cost, industry observers say. Because the airline had to compete on the basis of low fares, it was always forced to look for economies in its business.

"If you build your business on the leisure traveler, you build cost-saving in from the get go," said Nicolas Owens, aerospace analyst at Morningstar.


Copyright © 2003, Chicago Tribune

 

[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.

General Lee,

This was my post. I said "infamous" because you are well known, not because I dislike you. You are fun to read on occasion. I said Delta horn blowing because.......well you are. There is nothing wrong with that (to some it gets tiresome; they'll get over it).

Slug,

Yeah, I toot the Delta horn, and I am proud of it. But, I am sick and tired of LCC guys thinking everything is rosy. For ATA, it really isn't. Delta gets bashed all of the time, and I was just pointing out that others struggle too. And, it really seems that you think highly of yourself.

For your info, I spent 20 crappy months at UAL. That was my opinion. So if I'm happy being an LCC guy then that's my right. I don't think as highly of myself as you do of yourself. I'm a -737 driver who now likes my job, so back off loser.

Just an observation

That's all it was General, an observation about credit of a quote.

Slug

happy and no longer furloughed

 

[General Lee]

Slug,

"So back off loser."----Come on dude, don't resort to name calling. I thought your post to me originally was alittle snotty and I was calling you on it. It sure didn't seem like you were praising my efforts. I was just defending myself and my actions to a couple of other posts--and the reason I started this thread was because I didn't know ATA had a credit problem. Then I said most of our airlines, including mine, are having problems---even ATA which is a LCC. Next thing you know I am a punching bag.

As far as being furloughed, I am not, and I have always been a big advocate of trying to help Delta's furloughs and other airlines' furloughs as well. I am glad you are on with a stable company and hope you do not forget about the unfortunate people still out there on furlough. Enjoy your day.

Bye Bye--General Lee

 

[FlyBoeingJets]

Flyboeingjets,

I apologize. I can see how my posting two articles with bad news might be seen as rubbing it "in your face." I initially read them and was stunned because I really wasn't aware of the problems.

Bye Bye--General Lee

General,

No need to apologize. In fact, I should be the one apologizing. You caught me at a bad time. I had just read the articles about ATA earlier in the day. I also thought everyone knew about our situation. Added to that the problem is worse than I thought.

I would really hate for the great folks I fly with (who have their whole lives invested in ATA) to lose everything. I know the same is true at USAir, TWA, and UAL.

 

[MDP727]

Mister FlyBoeing, apparently you work for ATA. I do too. Don't role over on our vested interest so easily. Just for everyones sake lets state some unknown facts about are place of employment. There is continuously a state of ambiguity amongst the public, the media, and our fellow pilots.

ATA has been in buisness for 31 years
We have the longest reigning CEO of any airline
We have brand new equipment
We are the only airline to receive the FAA diamond award 2 years in a row
We have the best safety record
We dispatch aircraft to more destinations annually than any US airline
Boeing and GE Capital have more money invested in ATA than any airline
Our CASM is at 6.1% the lowest in the buisness
Two years ago we signed an Alpa contract with the largest pay increase ever awarded to an Alpa carrier putting us within 5-7% if not higher than other carriers including AA
We have the best vacation plan of any major
We have only furloughed pilots once for a brief period due to restructuring
We generated enough revenue to attain major airline status with the smallest fleet and minimal advertising
We are the only carrier to compete with our friends at SWA at a major hub and continue to enplane more passengers than they
Our relationship with our commuter is outstanding unlike the other carriers ie...Delta-Comair
Our working relationship with management is outstanding
We fly with the best bunch of pilots out there, we don't belittle other guys because of who they work for

I can go on and on. I don't toot my horn, I'm just proud of who I work for and with. Nothings forever guys not at AA, UAL, DELTA, and even ATA. It was only a few years ago that DAL was slated for purchase by CAL.
Mr. Lee thanks for pointing out our debt position. Maybe DAL should model some of our buisness plan, Songs long factor hovers around 70%, not a viable figure in todays market. Our aircraft leases were front loaded, unlike other carriers, ie...JB, in anticipation of increasing revenues, nobody expected 9/11. Now they just need to be restructured. We were one of the few carriers approved for the stabilization loan, this wouldn't have happened without a sound buisness plan. Our ballon payments didn't suddenely appear overnight, this was all on the table.
I wish you all the best! I hope all you furloughed guys get back to work soon.

 

[DH106]

MDP727,

Well said. Your post is, by far, the most intelligent briefing in this discussion.

I was recently hired by ATA, after being furloughed for one and one-half years, and I must add one note to your list: ATA has not only treated me better than any other company I've worked for, but I've been amazed at what a great place this is to work at.

As you stated, comparisons to JB's financing arrangements are "apples and oranges." I feel confident that the restructuring of our debt will take-place swiftly and efficiently. Unlike many companies, I feel our leadership will act with trueleadership, to expand and develop this airline futher. This is something I never saw at any other airline I've worked for.

I can't say any more... you've said it all!

 

[General Lee]

MDP727,

Well, I think it is great that you love your airline. I think you guys have some nice new airplanes and a good game plan, but those articles that I posted didn't paint such a rosy picture. When you stated that the Song flights have only a 70% load factor---you must remember that it really isn't high season yet for the Florida flights(when the snow starts falling---the loads will be 100%), and the TV's etc haven't even been installed yet, which will bring passengers back eventually again and again. We also have a frequent flyer program with CO and NW that will give us another edge. I think it is great that you guys have a great relationship with Chicago Express. But, that would turn sour if they got 70 seat RJ's and you started parking your 738's for some reason---like not being able to pay off next years debt. As soon as some of your routes were taken, that love relationship you have would evaporate. You did get a very good contract---even better than AA's---which was impressive. You said you have the best vacation plan. Well, our Capts can sell back their unused vacation (and the INTL guys don't need it--they have 19 days off a month)--and a friend of mine got a check for $68,000--all extra pay due to selling back 180 hrs of vactaion---just for the last year. Not bad. But I do agree, you guys run a good ship over there. I hope it all works out for you. And yes, I hope our furloughs also come back soon. Apparently they might be bringing 9 more 737-200's out of the desert soon, so maybe that will help.

Bye Bye--General Lee

 

[njcapt]

When you stated that the Song flights have only a 70% load factor---you must remember that it really isn't high season yet for the Florida flights(when the snow starts falling---the loads will be 100%)...

Funny... our Florida flights are running around 85- 95% load factors this summer. What's wrong with the operations at Song? Brand confusion?

 

[TriStar_drvr]

Warning! Warning! Warning!

I have far exceeded the recommended maximum beer allowance for posting on an internet bulletin board!

Read the following at your own risk!

Well, I was going to post a reply to the published articles about ATA's financial situation, but MDP727 in his first post on this board did a pretty nice job. Anyway, without copying the whole article, here's a link to a piece from Reuter's that outlines ATA's plan:

http://biz.yahoo.com/rf/030729/airlines_ata_earns_3.html

Bottom Line: Is ATA profitable? Yes. Is ATA in Financial trouble? Yes. Is it terminal? I don't think so. I think investors would rather see us make a profit than liquidate the airline for pennies on the dollar.

If TWA could stay in business without earning a profit for ten years, then ATA should be able to survive for a while while earning a profit, while it restructures it debt.

As for newhires knowing this and making an informed decision? Yes they should be aware of this. But since many of the newhires at ATA are coming from the ranks of the unemployed, my guess is that most are willing to accept the risk that ATA may not be around when they reach retirement age. I think most pilots realize in today's post 9/11 world, that working for an airline is a crapshoot.

I will reiterate what MDP727 said. Working for ATA has been the most enjoyable job I've ever had. I will admit, and I'm sure that every ATA pilot will admit it too, that none of grew up dreaming of working for ATA. I wanted to fly for Piedmont (native Tarheel here). ATA has numerous Eastern, Pan Am, Braniff, and Midway pilots in its ranks. We all put in our apps to United, American Delta, and every other airline in the free world. Well, in my case none of those airlines bothered to respond. But ATA did respond, and for me, what a ride it's been. So what should I have done? Given up flying? Non of us aspired to this airline, but the longer we've been here, the prouder we are of what we've become. All we've done for the last 30 years is fly our airplanes all over the world without a single fatality. We're quite proud of that.

I could ramble on, but my beer glass is dry, and if you've read this much you're probably bored to death. I'm going to do as a Captain stated on the ATA pilot's bulletin board: I'm going to fly the airplane as safely as I can, and let mangaement manage. Unlike the mangement teams of other airlines, I trust ours to do the best job possible. It's all I can do.

Cheers,
Brad

 

[General Lee]

NJCapt,

You probably have been to our ATL hub, since you guys train at our facility in ATL on the 738 atleast, and maybe you have seen our 10 daily 767's to FLL--all full. Song is carrying more people than Delta Express, and come Winter it will fill up. How many total flights to Florida do you have from MDW? Here it is from the AUG OAG:
MDW-FLL-3, MDW--RSW--1, MDW-PIE--3, MDW--MIA--2, MDW--MCO--4, MDW-SRQ--maybe 1 daily--ex THURS, and we'll throw in MDW--SJU for laughs--5 weekly flights(No, San Juan isn't in Florida--I know that!!!). Man, you guys are a power house to FLA. We have 12 daily from ATL to MCO and 4 are 777's, 3 are 767-400's, and the rest are 767-300's with one RJ late at night.(For non revs) Now before you bash me about our business plan, we did post a $31million operating profit for June--which isn't bad. Song has many many more flights to FLA than you do, and I know you also fly there from INDY and California (SFO and LAX)---6 flights from INDY and 2 from California. That's huge. Song is a new brand, and it may take awhile, but Song has Delta's financial backing and that CO/NW codeshare also, and it will offer the same as Jetblue (TV's and even a personal Song list---with individual song lists created by each passenger) but out of all three NYC major airports. Also, this Winter it will have 36 757's. We'll see how it does----70% isn't initially bad for this new brand.

Tri-Stardriver,

I am glad you enjoy it. I have heard good things---I have a friend who is a 737-800 Capt over there and he likes it a lot. I like the winglets on the 737-800, and the stretched 757's are nice. Even your TV commercials are cool. It would be nice to have such a good feeling about management etc, but we are having trouble with ours as of late. They probably should take a look at your management--employee relations and take note. And, I used to jump on those L1011's from MCO to ATL all of the time, and they were really nice too.(very large cockpit)

Bye Bye--General Lee

 

[MDP727]

Mr. Lee comparing our airlines OAG schedule is apples and oranges. Two entirely seperate entities. You have a tremendous flight schedule to Fla and you should with all those airplanes and guys to fly'em. Your a brand name, a staple if you will, I accept that. I'm willing to fly for an airline that has only one flight a day to Fla to one destination. If that flight is full, always, all the time that's what's important to me.
For the record I'm not in concerence with tristar man on one thing. I say congrats to all that have been hired at the biggies. I never applied! My early aviation goal was DAL. During the last hiring boom I was a 727 captain at 28 yr old. DAL was hiring 1000 a year, ATA 60 a year. Being a couple credits short of a degree I wasn't a qualified applicant, point being, ATA still hires pilots.

 

[UM#1]

Wasn't Delta close to buying ATA a few years back?

 

[General Lee]

MDP,

That is impressive being a 727 Captain at 28. (I was only a 727FE at 31......) I did know some Delta Express 737-200 Capt's that were "boy wonders"---in their late 20's---and all I could say was , "Good for them." My point with the OAG was to show NJCAPT that he shouldn't compare ATA and their load factor to our Song, especially when we have mainline and all of its flights to FLA from ATL and CVG. I keep telling you that I like your operation and I hope it contiunes for a long time---the main point I was bringing up with these articles is that a lot of carriers are struggling right now, and hopefully things will rebound. I was not aware of the debt problems at ATA, and I thought some people----who might interview and want to know about them---might be interested. I know after all of this is over and we hopefully bring back the furloughs, maybe Delta will be hiring again. If you still want for some reason to go to DAL (and leave ATA--that may be risky)--get those extra credits done on the internet---I have talked to a lot of guys who have done that. I wish you luck wherever you fly.

FlyChicaga,

I know ATA is adding a lot of new flights---I think the SFO to EWR one is very interesting and gutsy(--I am sure they are just trying to connect all of the Hawaii flights into SFO and the East Coast--which is smart). We made announcements to add new flights today---2 extra 738's from ATL--OAK (to combat Jetblue) and 1 extra flight a day from ATL--SFO. A couple days a go they announced new 737-300 service from SLC to Steamboat Springs in December. That is great--for you and me. As far as Leo Mullin stating what will happen--Delta management said almost the same thing in 1994 (I read the exact statement--the industry has changed forever....) in mid contract talks. We didn't give in then---and we had a huge boom in 1996. We had billion $$$$ profits, and then 9-11 ruined the party, as well as the tech burst. You are right about the Gov't money helping us---but that was really paying us back for the money we spent on security which contributed to other quarterly losses in the past two years. We also made money on the sale of Worldspan, which helps. We eeked out a $184 million profit--which is not bad. Our cash on hand (unrestricted) went from $1.9 Billion to $2.8 Billion---and even though our debt is high, our liquidity is great. IF we were to lose $1 million a day with $2.8 billion on hand (we really have $3 billion in cash--2.8 is unrestricted)--we could go awhile---1000 million equals a billion as I remember it. Then our company states that we did have a $31 million operating profit in June, and July hasn't even been reported yet, but July 4th was a full weeked, and my flights have been pretty full lately. What I am trying to say is that we are cutting costs (not pilots costs--yet anyways), and have gotten leaner--16,000 jobs cut so far (1310 pilots unfortunately), and the business plan includes Song--which is the only LCC competition from a major so far. Delta just refinanced some of its debt due in 2005, and I am sure if we do give back 10-15% eventually along with the other employees, that the debt problems will be paid. Some of the debt problems could be solved quickly---but Delta keeps them around---like the building of huge new terminals in BOS, JFK, and the buying of $1 billion worth of RJs this year alone. Delta chose to do that, and now wants our help. But, we are the best looking major, and things hopefully will improve--for all of us.

Bye Bye--General Lee