All You Wanted To Know About ATA and Chapter 11, And Then Some!!

[Captain Blue Sky]

Well here goes another airline, or should I say, so goes another US Domestic Airline...

ATA announced its Chapter 11 reorganization a few days ago. The surprising element was not so much the filing, but the sale of most of the gates at Chicago's Midway Airport to AirTran Airlines...

It appears that the corporate fathers of the company were hit by several occurences, one of which were the 4 hurricanes in Florida that resulted in a substantial reduction of cash inflow due to abbreviated schedules and station closings for weather... Florida is a very profitable market for ATA...

It appears that the plan now is to expand the IND operation significantly, making IND the primary hub for ATA. Reasons cited for the sale of gates at MDW is the high cost of leasing them from the City of Chicago and the lack of sustained profitability in the face of increasing airline capacity, falling air fares, and the extremely high cost of fuel...

The NEW agreement with AirTran, besides the sale of gates is the leased operation services for all of ATA's routes out of MDW. That means, ATA will operate AirTran flights in about 6 months time, through a special agreement and a codeshare arrangement with AirTran...

The codeshare arrangement is actually quite enticing. It will cause both companies, ATA and AirTran, the opportunity to market a total of 900 daily flights, rather than a mere 300 for ATA and 600 for AirTran...

So, this will likely have a very, very profound affect on the Domestic Airline Market, as this will boost AirTran's operation to the Number One ranking in the United States.

But, all is not finalized. The City of Chicago has already said they would resist the agreement with AirTran, citing a fear that ATA would experience a massive layoff of employees, once AirTran becomes entrenched...

So, over the next few weeks, time will tell how this latest airline saga plays out...

 

[dislvr75]

Thanks for sharing the info. That six month window is what I am concerned about though because we bought tickets to fly MDW - MCO in May of 2005. Although I fear for the jobs of those who currently work for ATA I also hope that Daley will approve the agreement so that ATA (dba Air Tran) will keep flying. I guess only time will tell, I will cetainly be paying CLOSE attention.

 

[inkkognito]

I have got my fingers crossed!
Last we heard, AirTran was pretty favorable on keeping the ATA employees...I sure hope so.
Captain Blue Sky, do you know how this would affect the frequent flyer program? I know nothing is finalized, but just wondering if you've heard anything. Would we remain under ATA's (my husband and I have been spoiled by Elite status and ATA's generous companion ticket policy) or would we have to start all over again with AirTran? And would ATA's planes be used?
Barb

 

[dislvr75]

Inkkognito, I know you asked captain blue sky but here's what I read.

If you go to ATA's website, and click on , "ATA restructuring", there is a letter from the president/CEO explaining their chapter 11 status. He makes mention toward the end of the letter that they plan to honor tickets, honor their frequent flyer program in keeping with their committment to customer service. They even reference the fact that they will continue to retrofit their airplanes for the new business class. (this is of course the move we've all been discussing because its changing everyone's seat assignments). SO it apears as if they are trying to keep ATA as is as best as possible, just owned by someone else. Hopefully this means you are in luck. Of course this also comes from the airline that ran promotional campaigns here in Chciago saying "We are here to stay". Hmmmm.....

Good luck to us all.

 

[inkkognito]

The "We're staying in Chicago" ads and sale are a running gag between my husband and I. Our joke is that now we're waiting for the "So long, suckers" sale!
Barb

 

[Captain Blue Sky]

Hi Barb!

You made me laugh!! Yes, the "So Long Suckers Sale" has taken several by surprise!

The Travel Awards Program that ATA has in place is supposed to remain fully intact if not expand and grow. In fact, if you follow along with other code share airlines, your miles earned should be able to be used on both ATA and AirTran.

This is a customary practice in the industry, and interchangeability is a very desireable thing!

I have not heard what is happening with our fleet. I do know, however, that AirTran is very interested in acquiring larger, longer flying aircraft. As there largest aircraft seats about 102, our B737-800s probably look very enticing to them.

The 757s have to remain, per the Department of Defense contract. Consequently, our 737s are truly up for grabs.

I think it is VERY SIGNIFICANT that Doug Parker, CEO of America West, has made a public announcement in Reuters stating that it would be in ATA's best interest to sign with them and not AirTran.

I am reading this as a perceived threat to many current U.S. domestic air carrier's health. It is a very, very good thing that other companies would not like the union of ATA & AirTran, particularly because together we would likely create a huge network of low-cost air routes.

So, I think there is definitely some positive spin on this whole affair...

And I believe that SkyChica and her B757 pilot husband, whom I am sure I know and have flown with, doesn't have too much to worry about.

 

[inkkognito]

Thanks for the info...glad to see that our miles should still be redeemable. We've been ready to go on a "flying frenzy" to use them up. I think we are due for something like 8-10 free companion tickets. I really, really hope to keep our Elite status, mainly for the pre-board. I wouldn't care about boarding early except that we often choose bulkhead exits, and we only bring carry-on, so getting overhead space is important to us. After a couple rounds of waiting for our luggage for an hour at Midway, we learned to be very streamlined packers, and I do not want to gate check!
Saw on your other thread that the 753s are going That's a shame...I loved those planes. 10D/E is "my" spot. And nothing beats the excitement of landing in one of those huge boats at Midway! For the last several trips, we've been on the 752s with the groovy blue seats that make Las Vegas casino carpets look dull...ugh. At least they have good exit rows...nothing too good on the 738s.
Barb

 

[danny1649]