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Monday, August 30, 2004

Briefs

  • Hard times are not limited to the legacy carriers. ATA Holdings [ATAH], the parent of ATA Airlines , a low-cost carrier, and Chicago Express, a regional carrier, has disclosed that it may run out of cash by early next year and that it might sell some assets to stay afloat. While the focus of the attention appears to on the mainline operations, little is being said about Chicago Express. Officials failed to return multiple calls from CRAN seeking comment. The holding company lost $90 million in the first six months of 2004. Despite refinancing $300 million in debt due this year and next, the company may not be able to make payments on a $178 million loan from the Air Transportation Stabilization Board. ATA expects to spend $20 million of its $150 million cash balance in the current quarter. ATA is reportedly negotiating with Southwest Airlines [LUV] to sell some of its gates at Chicago's Midway Airport, but ATA officials have emphasized that it is not abandoning Midway. The deal could also include some of the discount carrier's Boeing [BA] 737s. ATA accounts for 40 percent of the departures at Midway. Chicago Express feeds traffic to ATA in Chicago and Indianapolis with its fleet of 17 Saab 340s.
  • Republic Airways Holding [RJET] has converted four options to purchase Embraer [ERJ] 170s into firm orders for the 70-seat jet. Two Embraer 170s are to be delivered in December, which will be flown in the United Express program by either Chautauqua Airlines or Republic Airlines, both units of Republic Airways. The other two planes will be delivered next May and June. The deal has been valued at $100 million. With the newest order, Republic will have 22 new Embraer 170s in its fleet. It has options for an additional 22 planes. The planes are being configured into a three-class cabin.
  • SkyWest [SKYW] will pay a 3 cents-per-share dividend on Oct. 8 to those shareholders of record on Sept. 30. This marks the third straight quarter that SkyWest is paying a dividend of 3 cents. It raised the dividend payment from 2 cents in February.
  • In its first expansion beyond its home base, Independence Air [FLYi] will begin flights in October to Orlando using Bombardier [BBD] CRJ 200s from Knoxville, Tenn., and Columbia, S.C. Independence has been flying from Washington Dulles International Airport to both Knoxville and Columbia. It is anticipated that once Independence's fleet of Airbus 319s begin service in November that it will offer flights from Dulles to major Florida tourist destinations.
  • Delta Connection Academy has signed papers launching its fifth campus in September. The flight training school in conjunction with Sinclair Community College will offer flight instruction in a hangar at Dayton International Airport. Sinclair is the fourth college that Delta has formed an instructional partnership. The school is a unit of Delta Air Lines [DAL].
  • Embraer [ERJ] broke ground last week in Jacksonville, Fla., for its first U.S. assembly plant. The Brazilian firm will assemble its ERJ 145 models in the 71,000-square-foot facility. The planes will be built as part of a contract with Lockheed Martin [LMT] to build a new surveillance plane for the U.S. Army.
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