storminpilot
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http://www.indystar.com/articles/7/201155-2707-092.html
Southwest enters bidding for bankrupt ATA
Dallas-based airline in battle with AirTran Airways for Indianapolis-based firm's prized gates at Chicago's Midway Airport.
By Ted Evanoff
[email protected]
December 10, 2004
ATA Airlines moved closer to surviving bankruptcy and staying in business as a smaller regional carrier when a bidding battle emerged Friday for its prized gates at Chicago Midway between Southwest Airlines and AirTran Airways.
No other carrier came through with a buyout offer for all of ATA by the deadline Friday. That opens the way for ATA chairman and founder J. George Mikelsons' proposal to shed more than 1,000 pilots and flight attendants and regroup as a regional line using some cash from a Midway gate sale.
Southwest and AirTran could get into a bidding match over the Chicago hub Monday in Indianapolis when ATA and its creditors review the bids in preparation for making a recommendation by Thursday to the U.S. bankruptcy court.
A lawyer for 7,700-employee ATA, founded in Indianapolis in 1972 as a charter service with a single Boeing 727, expressed the strongest optimism heard from the nation's No. 10 airline since it filed for bankruptcy protection Oct. 26.
"The tide is going to turn. This is the beginning of the turnaround," said Stephen Claffey, ATA's attorney since 1980 and a member of the Baker & Daniels law firm in Indianapolis.
Southwest and AirTran earlier had revealed they would make a pitch for the Midway gates and publicly confirmed Friday they had submitted offers. Apparently no bid came in from a third carrier, although ATA officials earlier had said one might be made.
However, Baker & Daniels hadn't sorted their electronic mail late Friday afternoon for any offers -- the bid deadline was 4 p.m. Friday -- and there was a possibility of an unopened bid. Claffey said other lawyers working on the ATA matter were in Jeffersonville, Ind., on business unrelated to ATA, putting them out of position to check bids sent to their e-mail addresses. He said the bid packages sent out to prospective bidders contained an incorrect e-mail address for him.
Officials familiar with the process said other potential bidders include Hawaiian Airlines of Honolulu for ATA's Pacific routes, WestJet of Calgary, Alberta, for an undisclosed number of gates at Midway and New York LaGuardia, and Wexford Management LLC of Greenwich, Conn., for Chicago Express, a subsidiary of ATA parent ATA Holdings Corp.
Wexford controls Indianapolis-based Republic Airways, operator of regional jets shuttling passengers to hubs of several major carriers. Wexford and WestJet declined comment. Hawaiian Airlines had no comment.
Southwest filed a $100 million offer for six of ATA's 14 Chicago gates. AirTran Airways earlier offered $89.3 million for the 14 gates and slots at New York LaGuardia and Reagan Washington.
Lawyers for ATA and its creditors plan to read the bid details Saturday and Sunday and question bidders on Monday and, if necessary, Tuesday. U.S. Bankruptcy Judge Basil Lorch III is expected to pick one of the offers on Thursday.
"We do have room to negotiate but details will be worked out on Monday," said Southwest spokeswoman Whitney Eichinger.
Southwest's offer breaks down to more than $50 million for the six gates and less than $50 million in cash to ATA plus a deal that would enable travelers to buy one ticket and fly on ATA and Southwest. That deal, known as code-sharing, would apply to less than 10 routes out of Midway, where Southwest is currently the dominant carrier with more than 19 gates.
Under the AirTran proposal, ATA's 300-seat Boeing 757 's could fly to AirTran hubs at Baltimore and Atlanta and return to Indianapolis, or travel on ATA's current long-haul routes to the Caribbean, Mexico, Hawaii and California.
"We are confident that our offer is superior in that it provides the most cash for ATA and there's network-wide code-sharing benefits and greater opportunities for growth for ATA," said Kevin Healy, AirTran vice president for planning.
ATA's Claffey said he hadn't seen the Southwest bid package, but he noted a potential code-sharing arrangement could benefit ATA by steering more travelers to its planes.
"It could turn out to be an opportunity for ATA if Southwest is interested," Claffey said "It's my understanding they are the strongest airline in the country."
Call Star reporter Ted Evanoff at (317) 444-6019.
Southwest enters bidding for bankrupt ATA
Dallas-based airline in battle with AirTran Airways for Indianapolis-based firm's prized gates at Chicago's Midway Airport.
By Ted Evanoff
[email protected]
December 10, 2004
ATA Airlines moved closer to surviving bankruptcy and staying in business as a smaller regional carrier when a bidding battle emerged Friday for its prized gates at Chicago Midway between Southwest Airlines and AirTran Airways.
No other carrier came through with a buyout offer for all of ATA by the deadline Friday. That opens the way for ATA chairman and founder J. George Mikelsons' proposal to shed more than 1,000 pilots and flight attendants and regroup as a regional line using some cash from a Midway gate sale.
Southwest and AirTran could get into a bidding match over the Chicago hub Monday in Indianapolis when ATA and its creditors review the bids in preparation for making a recommendation by Thursday to the U.S. bankruptcy court.
A lawyer for 7,700-employee ATA, founded in Indianapolis in 1972 as a charter service with a single Boeing 727, expressed the strongest optimism heard from the nation's No. 10 airline since it filed for bankruptcy protection Oct. 26.
"The tide is going to turn. This is the beginning of the turnaround," said Stephen Claffey, ATA's attorney since 1980 and a member of the Baker & Daniels law firm in Indianapolis.
Southwest and AirTran earlier had revealed they would make a pitch for the Midway gates and publicly confirmed Friday they had submitted offers. Apparently no bid came in from a third carrier, although ATA officials earlier had said one might be made.
However, Baker & Daniels hadn't sorted their electronic mail late Friday afternoon for any offers -- the bid deadline was 4 p.m. Friday -- and there was a possibility of an unopened bid. Claffey said other lawyers working on the ATA matter were in Jeffersonville, Ind., on business unrelated to ATA, putting them out of position to check bids sent to their e-mail addresses. He said the bid packages sent out to prospective bidders contained an incorrect e-mail address for him.
Officials familiar with the process said other potential bidders include Hawaiian Airlines of Honolulu for ATA's Pacific routes, WestJet of Calgary, Alberta, for an undisclosed number of gates at Midway and New York LaGuardia, and Wexford Management LLC of Greenwich, Conn., for Chicago Express, a subsidiary of ATA parent ATA Holdings Corp.
Wexford controls Indianapolis-based Republic Airways, operator of regional jets shuttling passengers to hubs of several major carriers. Wexford and WestJet declined comment. Hawaiian Airlines had no comment.
Southwest filed a $100 million offer for six of ATA's 14 Chicago gates. AirTran Airways earlier offered $89.3 million for the 14 gates and slots at New York LaGuardia and Reagan Washington.
Lawyers for ATA and its creditors plan to read the bid details Saturday and Sunday and question bidders on Monday and, if necessary, Tuesday. U.S. Bankruptcy Judge Basil Lorch III is expected to pick one of the offers on Thursday.
"We do have room to negotiate but details will be worked out on Monday," said Southwest spokeswoman Whitney Eichinger.
Southwest's offer breaks down to more than $50 million for the six gates and less than $50 million in cash to ATA plus a deal that would enable travelers to buy one ticket and fly on ATA and Southwest. That deal, known as code-sharing, would apply to less than 10 routes out of Midway, where Southwest is currently the dominant carrier with more than 19 gates.
Under the AirTran proposal, ATA's 300-seat Boeing 757 's could fly to AirTran hubs at Baltimore and Atlanta and return to Indianapolis, or travel on ATA's current long-haul routes to the Caribbean, Mexico, Hawaii and California.
"We are confident that our offer is superior in that it provides the most cash for ATA and there's network-wide code-sharing benefits and greater opportunities for growth for ATA," said Kevin Healy, AirTran vice president for planning.
ATA's Claffey said he hadn't seen the Southwest bid package, but he noted a potential code-sharing arrangement could benefit ATA by steering more travelers to its planes.
"It could turn out to be an opportunity for ATA if Southwest is interested," Claffey said "It's my understanding they are the strongest airline in the country."
Call Star reporter Ted Evanoff at (317) 444-6019.
