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Southwest Airlines Announces Additional Plans for Chicago Midway AirportFriday December 10, 8:00 am ET
Bid Submitted for Six ATA Gates
DALLAS, Dec. 10 /PRNewswire-FirstCall/ -- Later today, Southwest Airlines will formally submit its bid in the federal bankruptcy court of Indianapolis for certain ATA Airlines, Inc. (ATA) assets, including a commitment to connect and exchange passengers with ATA, and various financing agreements. Total cash consideration and financing in the ATA bid will exceed $100 million.
Southwest's bid includes the acquisition of six Chicago Midway Airport gates currently under lease to ATA. The addition of these six gates increases Southwest's capacity by 32 percent, supporting further expansion plans.
As part of the bid, Southwest is willing to enter into a code share agreement with ATA, covering certain flights from Chicago Midway to approximately nine ATA domestic nonstop destinations. The code share, which will commence next year, could generate additional annual revenue in the $25 to $50 million range for each airline. Southwest estimates its annual traffic would grow, overall, approximately one percent as a result of the proposed code share.
"We are very excited about the opportunity to grow further at Chicago Midway Airport, by acquiring necessary airport gates and by code sharing with ATA," said Gary Kelly, CEO of Southwest. "This proposal is certainly good news for air travelers, as we continue to expand our flights and low fares from the new and improved Midway Airport. We believe the proposal is good for Southwest and the City of Chicago. Finally, we believe our bid provides a superior reorganization opportunity for ATA and its stakeholders compared to the bid from AirTran Airways."
Under the federal bankruptcy court's supervision, an auction will take place next week along with hearings to determine the disposition of ATA's assets and liabilities. Due to the competitive nature of the airline industry and the bidding process, no further details will be made available until the final bid is awarded.
Southwest Airlines (NYSE: LUV - News), which serves 60 airports in 31 states, has the strongest balance sheet in the airline industry. It is the only airline that has been consistently profitable, even in the aftermath of Sept. 11, 2001, and has been profitable for 54 consecutive quarters and annually since 1973. Southwest currently offers 145 daily flights out of Chicago Midway, and had previously announced the addition of 25 more flights to begin before mid-year 2005. Southwest currently employs more than 2,500 people in Chicago and has a pilot base, flight attendant base, maintenance facility, provisioning facility, people department, marketing office, and reservations center in Chicago. Chicago Midway is currently the fourth largest operation on the Southwest route system, and by mid-year 2005 it will be the airline's third largest point of operation with the addition of new flights announced earlier.
This news release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements. Additional information concerning the factors which could cause actual results to differ materially from the forward-looking statements is contained in the Company's periodic filings with the Securities and Exchange Commission, including without limitation, the Company's Annual Report on Form 10-K for the year ended 2003. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release.
Bid Submitted for Six ATA Gates
DALLAS, Dec. 10 /PRNewswire-FirstCall/ -- Later today, Southwest Airlines will formally submit its bid in the federal bankruptcy court of Indianapolis for certain ATA Airlines, Inc. (ATA) assets, including a commitment to connect and exchange passengers with ATA, and various financing agreements. Total cash consideration and financing in the ATA bid will exceed $100 million.
Southwest's bid includes the acquisition of six Chicago Midway Airport gates currently under lease to ATA. The addition of these six gates increases Southwest's capacity by 32 percent, supporting further expansion plans.
As part of the bid, Southwest is willing to enter into a code share agreement with ATA, covering certain flights from Chicago Midway to approximately nine ATA domestic nonstop destinations. The code share, which will commence next year, could generate additional annual revenue in the $25 to $50 million range for each airline. Southwest estimates its annual traffic would grow, overall, approximately one percent as a result of the proposed code share.
"We are very excited about the opportunity to grow further at Chicago Midway Airport, by acquiring necessary airport gates and by code sharing with ATA," said Gary Kelly, CEO of Southwest. "This proposal is certainly good news for air travelers, as we continue to expand our flights and low fares from the new and improved Midway Airport. We believe the proposal is good for Southwest and the City of Chicago. Finally, we believe our bid provides a superior reorganization opportunity for ATA and its stakeholders compared to the bid from AirTran Airways."
Under the federal bankruptcy court's supervision, an auction will take place next week along with hearings to determine the disposition of ATA's assets and liabilities. Due to the competitive nature of the airline industry and the bidding process, no further details will be made available until the final bid is awarded.
Southwest Airlines (NYSE: LUV - News), which serves 60 airports in 31 states, has the strongest balance sheet in the airline industry. It is the only airline that has been consistently profitable, even in the aftermath of Sept. 11, 2001, and has been profitable for 54 consecutive quarters and annually since 1973. Southwest currently offers 145 daily flights out of Chicago Midway, and had previously announced the addition of 25 more flights to begin before mid-year 2005. Southwest currently employs more than 2,500 people in Chicago and has a pilot base, flight attendant base, maintenance facility, provisioning facility, people department, marketing office, and reservations center in Chicago. Chicago Midway is currently the fourth largest operation on the Southwest route system, and by mid-year 2005 it will be the airline's third largest point of operation with the addition of new flights announced earlier.
This news release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements. Additional information concerning the factors which could cause actual results to differ materially from the forward-looking statements is contained in the Company's periodic filings with the Securities and Exchange Commission, including without limitation, the Company's Annual Report on Form 10-K for the year ended 2003. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release.
