Saddest day I've had in a while:-(
to go to AirTran for $87 mil.
* IIND to remain TZ
*Hawaii service unchanged
to maintain operations
We love you ATA
Here is Mickelson's letter to us:
> Today marks a milestone for ATA as we begin our transformation into a
> refocused, streamlined and profitable airline. The steps we are taking
> will help assure our future for our employees, customers and the cities we
> Our parent company, ATA Holdings Corp. and certain subsidiaries, including
> ATA Airlines, Inc., have filed for relief under Chapter 11. This means we
> intend to restructure our debt and to continue business as usual. We will
> stand by our customer commitments, honoring tickets, upholding our full
> schedule, in-flight services and frequent flyer reward programs.
> Along with the filing, we have reached an agreement with AirTran Airways,
> Inc in which AirTran will assume our flight operations, gates lease, and
> routes in Chicago Midway Airport as well as arrival and departure slots at
> LaGuardia Airport and Ronald Reagan Washington National Airport. The
> agreement, which needs the City of Chicago's approval, will take effect
> later this year or early next year, and is to be finalized over the next
> several days.
> We are in continuing discussions with potential third-party lenders to
> procure Debtor-In-Possession (DIP) financing. Meanwhile, the ATSB has
> agreed to allow us continued use of our cash collateral, which, combined
> with the Company's projected cash flow from operations, should be
> sufficient to fund the needs of ATA and our operating subsidiaries until
> we reach an agreement for DIP financing.
> Our agreement with AirTran is key to our transformation
> By re-structuring and partnering with AirTran, we intend to re-create ATA
> as a formidable low-cost, albeit smaller competitor, capable of winning in
> today's airline industry for our customers, employees, creditors and other
> stakeholders. Together, ATA and AirTran will establish co-marketing
> programs and code share agreements across both carriers' flight networks.
> As part of the agreement, AirTran intends to outsource to us the servicing
> of Chicago flights and pay us service fees over a specified transitional
> period. These transition arrangements will allow us a gradual, measured
> exit from Chicago, as well as provide the time and flexibility we need to
> develop and execute our reorganization plan and to optimize our fleet and
> plane sizes.
> Reorganizing to emerge a stronger airline
> Reorganizing will strengthen our business and competitive position, and
> give us the resources to emerge a stronger airline. Our plan entails
> optimizing our fleet and plane sizes and focusing on the most profitable
> cornerstones of its business: commercial flights routed through our
> Indianapolis hub, flights to Hawaii, military and some commercial charter
> service. We also intend to retain our Chicago Express connection service
> through Chicago Midway, as well as its Ambassadair Travel Club.
> Business as Usual
> We will continue operating business as usual while we reorganize and
> execute our arrangement with AirTran. As we transform, we will maintain
> our focus on serving customers with one of the youngest, most
> fuel-efficient fleets and providing value-based everyday, low fares and
> service that makes the travel experience easier and more affordable for
> all our business and leisure travelers. We will also continue to improve
> our services, such as retrofitting planes for business class service,
> which we expect to complete by early 2005.
> Chicago Midway is an important and valuable hub for ATA. We employ
> hundreds of highly qualified and dedicated employees - ramp agents, flight
> and cockpit crews, customer service agents, aircraft mechanics - that
> provide a high level of passenger service, safety and security to
> thousands of passengers every day.
> After the agreement with AirTran, Chicago Midway will continue to need
> hundreds of qualified and dedicated employees - ramp agents, flight and
> cockpit crews, customer service agents, aircraft mechanics. Our Midway
> employees are critical to the success of this transition and our
> collective future.
> Just as importantly, we are committed to Indianapolis, which will continue
> to serve as ATA's headquarters location and primary hub. Indianapolis has
> been a key source of our growth, and we will remain in the city we have
> called home since 1973.
> I know that you are all worried about the implications of this filing for
> you personally and your ability to do your job. Let me assure you that we
> are committed to paying employee salaries, wages and benefits without
> interruption and through the normal processes.
> In order for us to stand by our customer commitment to business as usual,
> I ask you to continue providing the same high level of passenger service,
> safety and security as well as operational excellence. I am counting on
> everyone to continue providing that high level of service and value that
> our customers expect and appreciate.
> What's Next
> Over the next few days we intend to finalize the details of our agreement
> with AirTran. In addition, as part of the reorganization we will continue
> to pursue necessary cost reductions across the company and implement a
> compelling plan of reorganization. ATA's operating costs are among the
> lowest in the industry but must continue to be addressed to achieve
> As part of this process, we will look at every element of our operations.
> Once we have completed further work on a solid plan of reorganization, we
> will submit it to our creditors and the court for approval.
> Keeping You Informed
> We will continue to communicate openly and regularly, and to share
> information as it becomes available. We have created a special section on
> EWS to keep you posted of the progress we make over the next few months.
> You can find the link on the home page, as well as a link to the special
> section of ATA.com. In addition, we will continue to post a new issue of
> Info Line each week on EWS. And I am personally committed to communicating
> directly with you as we move through this process.
> Again, let me say how much your unfaltering dedication and loyalty
> continues to impress me. Thank you for this commitment to ATA. Keep your
> heads up.
> GEORGE MIKELSONS
> Chairman & CEO
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