The Indianapolis-based carrier that ended scheduled service here in January had a loss of $ 5.27 million in the second quarter, according to data compiled by the U.S. Department of Transportation.
Now privately owned, ATA Holdings Corp. lost $ 26.3 million during the second quarter in its domestic operations, according to DOT. But it earned $ 21 million in trans-Atlantic service, which includes flights to the Caribbean and military charters.
The data reflect ATA's first full quarter since coming out of bankruptcy last February. ATA emerged from its 16-month financial nightmare a considerably smaller carrier with new management. Chairman and CEO J. George Mikelsons, who founded ATA in the 1970s, retired.
ATA lost more than $ 450 million in 2005 much of that restructuring costs and has lost $ 1.5 billion since 2000.
Executives declined to confirm the results, which airlines report to the Federal Aviation Administration. They said the numbers are probably still tainted by extraordinary issues associated with its reorganization.
That being said, we are pleased with our performance vs. our business plan, said Subodh Karnik, executive vice president and chief operating officer.
The goal of the business plan is long-term survival, but also includes helping primary equity holder, New York-based Matlin Patterson Global Opportunities Partners, cash out with a profit.
Matlin has pumped $ 95 million into ATA. From the start, it's been expected that one way the investors would exit would be to sell shares of the new ATA to the public within the next few years. The company was delisted from NASDAQ last March and its old shares became worthless.
ATA, Spirit Airlines and Continental Airlines were the only airlines among the 21 the government tracks to report operating losses in the quarter.
The entire group reported a domestic operating profit margin of 7.9 percent in the second quarter the best performance since 2000.
ATA's improving financials follow the airline's cutting more than 4,800 jobs, over $ 85 million in payroll costs, and tens of millions of dollars in aircraft lease payments, moves that saved hundreds of millions of dollars.
ATA is now at roughly half the size it was 1-1/2 years ago.
Downsizing didn't end with ATA's emergence from Chapter 11 in February, however. Then, it had about 1,300 employees in Indianapolis; now, the number is barely 700.
There also have been schedule tweaks, but, net-net, we like to believe we've reached our trough, Karnik said.
Hitting bottom came by clipping the wings of marginally profitable and unprofitable routes, including those from Indianapolis and some at its Chicago Midway Airport hub. Most recently, in April, ATA axed Midway flights to Orlando and Fort Myers, Fla.
ATA also is being careful not to step on the toes of its code-sharing partner, Southwest Airlines. In late-2004, the Dallas carrier bought a half-dozen of ATA's gates at Midway for $ 30 million.
It also launched what was for Southwest an unprecedented code-sharing agreement, in which each carrier would fly to destinations the other didn't through a single set of tickets. For example, Southwest started selling trips to Hawaii that ATA flies from Los Angeles, with Southwest feeding passengers to L.A. for the last leg of the trip.
Southwest tie strengthened
Late last year, the two carriers renegotiated their code-sharing agreement for another seven years. Now, through ATA's Web site, passengers have full access to Southwest's reservation system. That gives ATA passengers access to flights by Southwest to and from cities ATA does not serve.
Do you satisfy the travel needs of most of the customers? Karnik asks. If you don't have scope, it doesn't matter what the [fare] prices are.
If its stable financial condition improves, the Indianapolis-based company might sell stock to the public within two years.
A partnership with ATA Airlines is providing Southwest with options it never had before.