Ata, What's Up?

[PHXLOST]

ATA is going down ($42 million loss in May and June)...what are your thoughts, what will SWA do?...Buy them out right?...Hawaii?

 

[orangeman]

Good Question,
I wonder though, was this an improvement over the previous year? Losses are entirely to common in this industry. I am sure some one on this board can supply more info. My understanding is that the codeshare has improved revenues for both Southwest and ATA. I would LUV to know how well this might have improved ATA's bottom line. I wish I had the time to look up this info now, but gotta go work tomorrow fairly early for me.
Yes I am a lurker. But only since WN F/A contract negotiations last year. I got tired of giving info that wasn't understood or even then Ignored.

🙂 😉

 

[corl737]

ATA is going down ($42 million loss in May and June)...what are your thoughts, what will SWA do?...Buy them out right?...Hawaii?

[post="286337"][/post]​

(Disclaimer: This is all "in my opinion" stuff. I'm not an insider so take it for what it's worth!)

To say that an airline is "going down" because of a paltry $42 million loss is ignoring history. How much has United lost? How about USAirways? American? Care for more examples? Besides, any good accountant could make even a highly profitable year look bad if they were trying to minimize taxes!

It takes time to reorganize and ATA has one of the brightest minds in the airline industry leading the way. It may not necessarily be pretty nor quick but I have faith in John Denison's ability. (Denison was formerly an Executive VP at SWA and came out of retirement to accept ATA's reorganization-CEO title.)

As for SWA's role: there are major issues to be resolved before the two carriers engage in any form of collusion. While SWA's unions have agreed that codesharing is good for the company's bottom line, anything that borders on the illusion of outsourcing will have to be carefully presented. SWA's entire record of profitability (over 10 years straight in the black) rests squarely on the exemplary relationship between the employees and management. Without the worker's wholehearted support, SWA will plummet into the category of "airline" and join the quagmire the other carriers currently endure.

The workforces probably could be philosophically integrated well and are already demonstrating the ability to work together at MDW but the additional aircraft types would hamper efficiency at a time that cost reduction is king. Thus, I see an outright buyout as unlikely. (Mergers don't always work because of all the baggage brought to the table by both parties.) Perhaps additional codesharing, especially if ATA takes on an expanded international route structure. (SWA from Lubbock to BWI, ATA on to LGW?) Still, combining ATA's vast experience in intercontinental and ETOPS operation with SWA's massive domestic structure is an intriguing thought!

 

[LoneStarMike]

Perhaps additional codesharing, especially if ATA takes on an expanded international route structure. (SWA from Lubbock to BWI, ATA on to LGW?)

[post="286612"][/post]​

Regarding codesharing, I wonder what would happen if the Wright Amendment were to be repealed. Would we see ATA move some or all of it's DFW operations to Love Field? Would they perhaps keep their existing DFW service but add additional new service at Love?

Would WN make DAL an ATA code-sharing city like they've done at MDW, PHX and LAS?

Maybe ATA could begin new nonstop service out of DAL to airports WN doesn't currently serve - places like BOS, LGA, EWR, MSP, DEN, SFO, HNL? etc. Southwest wouldn't see any benefit from Dallas customers booking those trips as they would be entirely on ATA, but Southwest would see some benefit from their customers in outlying cities flying WN into DAL and connecting to ATA.

Were ATA to do this it would lower their costs by operating some/all of the Dallas-Fort Worth service out of a less expensive airport.

It would also provide more competition at Love Field and chip away at WN's current 97% monopoly at DAL that some have expressed concerns about.

Looking 5 years down the road, they might be able to do the same type of thing in Seattle if they are successful in relocating to Boeing Field.

I think there are all types of creative things Southwest and ATA could come up with that would end up benefitting both carriers.

Question - Which airline has benefitted the most (financially speaking) from the WN/ATA codeshare? WN or ATA? My uneducated guess would be ATA, but I don't know and that's why I'm asking.

LoneStarMike

 

[swflyer]

Question - Which airline has benefitted the most (financially speaking) from the WN/ATA codeshare? WN or ATA? My uneducated guess would be ATA, but I don't know and that's why I'm asking.

LoneStarMike

[post="286820"][/post]​

Great question, Lone Star Mike, and btw great to see you here.

IMHO, ATA is in the lead for benefit from the deal.

Southwest gained gates and access to major cities I never thought we'd see on a routemap, while keeping another low fare carrier from increasing competitive presence in Chicago. Good offense and defense.

ATA was saved from extinction (the Airtran offer would have ended operations over time). ATA also increased it's network by more than 20 cities, allowing much more feed into it's larger 737-800's to the major cities it serves. To my thinking, people keeping jobs in this industry is an example of greater financial benefit.

I definitely feel it was a win/win, and I believe it was/is a good stretch to the SWA model.

Again, IMHO.

 

[WinslowFartsGASurkelMAN]

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