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ATA To File Prepackaged Bankruptcy?  
User currently offlineTOLtommy From United States of America, joined Dec 2003, 3308 posts, RR: 5
Posted (10 years 1 month 4 weeks 10 hours ago) and read 10451 times:

From www.commercialaviationtoday.com:

The Financial Times reports that Indianapolis-based ATA Airlines is expected to file for bankruptcy protection as early as today, with AirTran, America West and Hawaiian Airlines among the carriers lining up to acquire parts of the company's assets.

According to the report, AirTran is in discussions with ATA about acquiring the company's assets at Chicago's Midway Airport, where ATA operates its biggest low-fare base. AirTran also reportedly is interested in ATA's young Boeing 737-800s, and could file its own reorganization plan along with ATA, in a "pre-packaged bankruptcy."

AirTran also reportedly has been talking with Hawaiian Airlines, which is interested in ATA's 757-operated Hawaiian routes. These also have attracted the interest of America West, which was rumored earlier to have been interested in ATA's Midway assets as well.

AirTran and America West are both scheduled to file their third quarter financial results on Wednesday.

----------------------------------------------------------------------
Interesting... What would a prepackaged CH11 filing do for AirTran? Would it allow them to get out of the contracts they have with Boeing? Would it give them cost reductions to fight Delta at ATL if they file? Help me out here, I'm trying to see how they need to file bankruptcy!

42 replies: All unread, showing first 25:
 
User currently offlineSHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 16
Reply 1, posted (10 years 1 month 4 weeks 10 hours ago) and read 10330 times:

TOL-ATA would be filing the prepackaged bankruptcy, not AirTran...


Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
User currently offlineAzjubilee From United States of America, joined Apr 2000, 4026 posts, RR: 27
Reply 2, posted (10 years 1 month 4 weeks 10 hours ago) and read 10310 times:

WHERE does it day Air Tran wouold file bankruptcy? ATA is the one with the problems... Air Tran, America West and Hawaiian are said to be ready to cherry pick the assetts ATA has.


AZJ


User currently offlineTOLtommy From United States of America, joined Dec 2003, 3308 posts, RR: 5
Reply 3, posted (10 years 1 month 4 weeks 10 hours ago) and read 10267 times:

Read it again folks, I'm not reading this wrong....

"AirTran also reportedly is interested in ATA's young Boeing 737-800s, and could file its own reorganization plan along with ATA"

Could file it's OWN plan.... Along with ATA....


User currently offlineGeg2rap From United States of America, joined Sep 2003, 853 posts, RR: 0
Reply 4, posted (10 years 1 month 4 weeks 10 hours ago) and read 10235 times:

this is one way to get around the union seniority arguement AWA/ata were rumored to be having

User currently offlineAlphascan From United States of America, joined Nov 2003, 937 posts, RR: 13
Reply 5, posted (10 years 1 month 4 weeks 10 hours ago) and read 10181 times:

Good catch Tommy. I missed it the first time through.


"To he who only has a hammer in his toolbelt, every problem looks like a nail."
User currently offlineSHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 16
Reply 6, posted (10 years 1 month 4 weeks 10 hours ago) and read 10128 times:

What are they going to do then?

Airtran: Northern Georgia District Court of the United States, I would like to file Chapter 11...

Judge: Accepted, what do you plan to do now in bankruptcy?

Airtran: Emerge, we just wanted to be in bankruptcy for the day so we could tell ATA's employees to go find a new job...

Am I missing something here?



Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
User currently offlineQuickmover From United States of America, joined Mar 2004, 2502 posts, RR: 0
Reply 7, posted (10 years 1 month 4 weeks 10 hours ago) and read 10048 times:

Wow! I didn't see that TOLtommy. Do you suppose that what they mean is a plan to renegotiate the leases?

User currently offlineTOLtommy From United States of America, joined Dec 2003, 3308 posts, RR: 5
Reply 8, posted (10 years 1 month 4 weeks 10 hours ago) and read 10041 times:

That's what I'm trying to figure out. I don't understand WHY a CH11 filing is needed, unless it gives them a way out of some obligations. I think it has to do with their Boeing contracts more that not taking ATA employees. After all, if they take the 738's they'll need crews immediately, right? Wouldn't they want to reduce their existing 737 order with Boeing if they take ATA's planes? Isn't AirTran's contract with Boeing heavily in Boeing's favor?

User currently offlineQuickmover From United States of America, joined Mar 2004, 2502 posts, RR: 0
Reply 9, posted (10 years 1 month 4 weeks 10 hours ago) and read 9969 times:

I thought they got a pretty good deal on the 737s or at least that's what they said on the conference calls. Could it be that with Delta going ch11 at some point soon, that they are getting a jump on any advatage that they would have?

User currently offlineMariner From New Zealand, joined Nov 2001, 25693 posts, RR: 85
Reply 10, posted (10 years 1 month 4 weeks 10 hours ago) and read 9951 times:
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TOLTommy:

You are correct - that is what it says.

I suspect that it is just very badly worded. I suspect that it means that AirTran would file their rescue plan with the bk court at the time of ATA's bk filing.

I think it would be quite difficult for AirTran to persuade a judge to let them enter Chapter 11.

But, you never know.

cheers

mariner



aeternum nauta
User currently offlineUa777222 From United States of America, joined Dec 2003, 3348 posts, RR: 11
Reply 11, posted (10 years 1 month 4 weeks 10 hours ago) and read 9934 times:

Doesn't some of their if not all of their 737 a/c have winglets? Isn't this the reason that AirTran opted not to get them on their 737's b/c of gate space at some airports? Or are they going to take what 738's that they have that are leased so that they can open new routes until the 737's from Boeing are produced.......

I'm gussing, and only gussing, that with AirTran's filing for BK is so that they an avoid any negotions between unions and other groups hindering the fleet merger and crew aquirement. Wouldn't AirTran have to go through the lease/bank comany to aquire these a/c?

Thanks again.

UA777222

What's AirTrans Airline Code? Writing it out is too much time.

Thanks again!



"It wasn't raining when Noah built the ark."
User currently offlineCALPilot From United States of America, joined Oct 1999, 999 posts, RR: 13
Reply 12, posted (10 years 1 month 4 weeks 10 hours ago) and read 9904 times:

Bad catch Tommy!

Gee people figure it out... What they are refering to is Airtran coming into court with a reorganization plan for ATA. (period!) Airtran with all of there cash, would most likely be the one providing the DIP financing for whatever remains of ATA to operate in, or exit from Chap.11.

This would beat America West to the punch and cut them out of the picture?


User currently offlineGr8SlvrFlt From United States of America, joined Jan 2002, 1609 posts, RR: 10
Reply 13, posted (10 years 1 month 4 weeks 10 hours ago) and read 9906 times:

I agree. Either it's worded incorrectly or it means AirTran might file as a participant in the ATA bankruptcy. I believe AirTran's assets far exceeds it's liabilities as this point, making a bankruptcy of it's own impossible.

User currently offlineRoseFlyer From United States of America, joined Feb 2004, 9817 posts, RR: 52
Reply 14, posted (10 years 1 month 4 weeks 10 hours ago) and read 9878 times:

While trying to make sense of this, a prepackaged CH11 filing does not mean that Airtran would file for bankruptcy. They would put in a filing that would acquire assets from ATA. They would need to do a CH 11 filing if ATA doesn't liquidate because assets do not come up for sale in Ch 11. If Airtran filed a prepackaged chapter 11 bankruptcy they would not have to pay any taxes on the assets they acquire from ATA for six years. Basically they could do a CH 11 filing and as long as they assure creditors that payments will continue to be made, they can exit in 61 days or less and get a huge tax break. If Airtran does it correctly neither their stock nor bonds issued would be affected.

I highly doubt that any of this would happen, but if you correctly it can really give Airtran a financial advantage. A short term prepackaged (meaning all lessors agree and arrangements are made) filing could let them steal the ATA assets while not having to pay ATA's enourmous lease rates. It is a huge risk, but could be very good. By filing an injunction they are not necessarily filing for bankruptcy themselves, but rather using ATA's bankruptcy to get the lease rates down on the plane, and get an incredibly low lease rate while not affecting their own credit.

(sorry if I misunderstand but that is what I have interpreted it as, I am just an economics major, and not an attorney so I might be completely wrong)

edited for grammer


[Edited 2004-10-25 17:15:51]

[Edited 2004-10-25 17:34:44]


If you have never designed an airplane part before, let the real designers do the work!
User currently offlineQuickmover From United States of America, joined Mar 2004, 2502 posts, RR: 0
Reply 15, posted (10 years 1 month 4 weeks 10 hours ago) and read 9871 times:

From the yahoo ATAH message board linking a FT article. They are talking about a wet lease deal on the 737s. Take it for what it's worth.



"Financial Times

US low-cost carrier on verge of bankruptcy
By Caroline Daniel in London
Published: October 25 2004 00:02

The problems facing even low-cost carriers in the US are set to be underlined this week with the bankruptcy of ATA, which could come as soon as Monday, and a warning from Independence Air on Wednesday about its deteriorating financial position.

According to a person familiar with the filing, ATA, the tenth largest airline in the US could file for bankruptcy on Monay in Indianapolis. Its financial distress has already attracted a number of interested parties who have been holding discussions in the last few weeks and over the weekend about the airline’s assets.

Discussions involving AirTran are currently the most advanced. It is interested in ATA’s operations at Midway airport in Chicago, and may seek to wet-lease its 737 Boeing aircraft. It could file a separate plan with the bankruptcy court, alongside the ATA filing.

AirTran has also been holding talks with Hawaiian Airlines, which is understood to be interested in taking over ATA’s Hawaiian routes, which use 757 aircraft and are based on the West Coast and Phoenix, according to someone familiar with the talks. "



User currently offlineUa777222 From United States of America, joined Dec 2003, 3348 posts, RR: 11
Reply 16, posted (10 years 1 month 4 weeks 10 hours ago) and read 9797 times:

Could it be that AirTran is trying to enter the ATA Bankruptcy stating to the courts that they are there as a key player in trying to get the airline out of bankruptcy but that with lack of current funds that AirTran (haha my @$$) has they can only afford so much for this much under these circumstances bla bla bla bla basically getting ATA's a/c and other assets for a very very low price of only 3 easy payments of $19.99....

Thanks again and it would be sweet if someone, with an aviation industry related background, could call this play baised on facts and whatnot, really intrested in this topic. Well, off to school but will post/view throughout the day! Sorry if I gave off the (13 year old armchair CEO BS...)

Thanks again.

UA777222



"It wasn't raining when Noah built the ark."
User currently offlineTOLtommy From United States of America, joined Dec 2003, 3308 posts, RR: 5
Reply 17, posted (10 years 1 month 4 weeks 9 hours ago) and read 9675 times:

I agree that it doesn't make sense, but it is what it is. I don't know what FL plans to claim as liabilities, and let's face it, the rising fuel costs and hurricanes didn't help them in the past few months. They may be in a position where a "prepackaged" bankruptcy filing makes sense. As long as they can show that they have more liaibilities than assets, it shouldn't be hard. And a prepackaged plan keeps outsiders from trying to prevent a reorg.

User currently offlineTOLtommy From United States of America, joined Dec 2003, 3308 posts, RR: 5
Reply 18, posted (10 years 1 month 4 weeks 9 hours ago) and read 9647 times:

I think Roseflyer has it figured out....

User currently offlineCALPilot From United States of America, joined Oct 1999, 999 posts, RR: 13
Reply 19, posted (10 years 1 month 4 weeks 9 hours ago) and read 9597 times:

Gee tommy can you read? Maybe you should not be allowed to vote?

Airtran is not the one filling, it's ATA. Airtran in someway, is bringing money to the table. How can you get that through your head?


User currently offlineAlphascan From United States of America, joined Nov 2003, 937 posts, RR: 13
Reply 20, posted (10 years 1 month 4 weeks 9 hours ago) and read 9419 times:

CALPilot;

Lighten up! Tommy was merely pointing out the poorly worded line in the article. It could be read to mean several things. It is not clear.




"To he who only has a hammer in his toolbelt, every problem looks like a nail."
User currently offlineAvek00 From United States of America, joined Oct 2004, 4417 posts, RR: 19
Reply 21, posted (10 years 1 month 4 weeks 9 hours ago) and read 9286 times:

The article was indeed badly worded - the point is that if AirTran and ATA come to an agreement, AirTran will file a Plan of Reorganization in the ATA bankruptcy case that will involve asset sales/lease assumptions from ATA to AirTran.




Live life to the fullest.
User currently offlineMidnightMike From United States of America, joined Mar 2003, 2892 posts, RR: 14
Reply 22, posted (10 years 1 month 4 weeks 9 hours ago) and read 9273 times:


Damn, subject of the posting screwed me up, I saw AirTran & I said what the hell......



NO URLS in signature
User currently offlineCATAvNews From Canada, joined Oct 2004, 20 posts, RR: 1
Reply 23, posted (10 years 1 month 4 weeks 7 hours ago) and read 7722 times:

OK -- Since I first published the article in question, I couldn't let this one go. It was perhaps not well written, but to clear up these questions, if AirTran files a reorganization plan, it will be FOR ATA, NOT AirTran.

I'm not attorney, but as I understand it, a pre-packaged bankruptcy is a way for a company to restructure with the consent of most of its stakeholders. In this case, AirTran would be filing a plan that would set-out whatever deal it reached with ATA management. I believe competing plans could be filed, however, as we see with Hawaiian Airlines' bankruptcy. So another airline could file a competiting plan and try to make the case that its plan presents a better option for creditors.

Daniel-Robert Gooch
Publisher of Commercial Aviation Today


User currently offlineSPREE34 From United States of America, joined Jun 2004, 2264 posts, RR: 9
Reply 24, posted (10 years 1 month 4 weeks 7 hours ago) and read 7644 times:

Let's see. ATA, I'll use the "T" from that one..........America West, just the "W", west sounds to local...........AirTran, the "A". But it's got to have a new name and livery................ I'VE GOT IT "TWA"
The new combined airline will be TWA TranWorldAir.(one word)Once the bankrupcy was was over, fast expansion could be done using retiring NW DC-9s, hiring the old TWA guys AA screwed. Imagine, non stop from PHX to Dubai, it would be real competition for that new Canadian World outfit.


Disclaimer: I am on prescription pain killers right now

www.TranWorldAir.com



I don't understand everything I don't know about this.
25 Dutchjet : A very confusing article indeed, while the article does make reference to an AirTran bankrputcy, it seems quite unlikely that AirTran would go though
26 N1120a : (Discussions involving AirTran are currently the most advanced. It is interested in ATA’s operations at Midway airport in Chicago, and may seek to w
27 Moose1226 : A source within CO, says that CO is iterested in ATA's 757-200/300's. They apparently have the same exit configuration and RB211 variant as CO's seven
28 NWAFA : NWA is also looking at getting more 757's. Not sure what type of engines are on ATA' (specifically, the -300's).
29 JAXpax : I think the most interesting possibility from this is a more direct war between Southwest and AirTran at Midway.
30 Isitsafenow : NWAFA.......I need an explaination. Last night on this site, I read that NW has 5 757's parked at Marana. The person who wrote the post even listed th
31 NWAFA : Only one of them will be parked, 4 are/have been pulled back in...NWA is thirlled with the performance of the 757-300. I was in a meeting with the com
32 Airtran737 : ATA uses the Rolls Royce engine on it's 757's
33 PHLBOS : Does anyone know what type of engines are on ATA's 757's (esp. the -300)? Not sure about TZ's 752s but their 753s, I believe are NOT PWs. According to
34 Quickmover : From the yahoo board http://trinity.ibj.com/newdaily2/html/daily_story_102504a.html MONDAY, OCT. 25, 2004 ATA could file bankruptcy this afternoon Fro
35 Frosty72 : What ever happens AirTran has always played their cards right. The recovery of Valu-Jet transiton to AirTran is the best example, and the sense to use
36 Avek00 : Actually, AirTran does have good reason to be worried if it is successful in picking up some or all of ATA. The integration costs of even a partial as
37 Ifly2eat : As of 4:30 EST on Monday the U.S. bankruptcy court in Indianapolis has NOT received any filings from ATA. Go back to playing flight sim boys and girls
38 AASTEW : Avek00, Hopefully, the unions at TZ and FL have some good seniority protection clauses in the union contracts. Here we go again! And now for all the f
39 BNE : The topic has been changed to mention ATA, looking further, then maybe Airtran might file, but that is highly unlikely, they had better not as I own 1
40 N1120a : I think that ATA could be FL's Morris Air. Much like WN did, they can get a bunch of planes and an instant presence in a good market, at a bargain pri
41 Post contains images BNE : Wow, a change of title sure stopped this thread in its tracks, , I made the change of title while at work so didn't really have time to look through t
42 PHLBOS : Edited to correct first paragraph. Two weeks ago, who would have thought that ATA might be filing for bankrupcy before DL? To my knowledge, DL hasn't
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