ATA Holdings Corp. (Nasdaq:ATAH), parent company of ATA (American Trans Air, Inc.), today reported a third quarter loss available to common shareholders of $61.0 million, or $5.18 per share (basic and diluted). This compares with income available to common shareholders of $13,000, or $0.00 per share (basic and diluted) in the third quarter of 2001. On a proforma basis, excluding the fleet charges and U.S. Government grant revenue, the Company`s loss available to common shareholders was $30.1 million, or $2.56 per share (basic and diluted) in the third quarter of 2002. This compares with a loss available to common shareholders excluding fleet charges and U.S. Government grant revenue of $24.0 million, or $2.09 per share (basic and diluted) in the third quarter of 2001.
Total operating revenues for the third quarter of 2002 were $317.3 million, a 1.3 percent decrease compared with the same quarter in 2001. Scheduled service revenues increased 11.1 percent to $231.6 million. Charter service revenues decreased 27.2 percent to $68.2 million. Total operating expenses, excluding fleet charges and the U.S. Government grant, increased 0.2 percent to $342.6 million.
“The results for the third quarter are disappointing but not unexpected. The pricing environment is the most difficult I have seen in more than thirty years in the business,” said George Mikelsons, ATA Chairman and CEO. “This quarter we initiated numerous cost-savings measures including the indefinite extension of an across-the-board pay freeze for non-contract employees and additional reductions to our workforce.”
“We do not know when the revenues will recover, but we are taking the steps necessary to reduce our cost per available seat mile for 2003 to not exceed the actual revenue per seat mile that we experienced in 2002,” explained Mikelsons. “At the same time we are continuing our efforts to establish the ATA brand in consumers` minds: affordable fares, new aircraft with leather seats, and on-time flights.”
“In the coming weeks, ATA expects to meet the conditions set by the Air Transportation Stabilization Board (ATSB) and fund a term loan, which is supported by the $148.5 million federal loan guarantee,” said Ken Wolff, CFO and Executive Vice President. “The proceeds of this loan will provide us liquidity to pursue our tough but achievable business plan.”
ATA`s third quarter earnings are impacted by several fleet charges. As reported last week, ATA wrote down its investment in a joint venture with Boeing (BATA), set up to remarket Boeing 727`s. The charge adjusted the book value to the current estimate of fair market value for the used aircraft. ATA has also taken an additional charge to its Lockheed L-1011 fleets during this quarter. The total impact of these non-cash charges was $34.3 million.
System-wide revenue passenger miles (RPMs) decreased 0.7 percent to 3.24 billion, and available seat miles (ASMs) increased 5.2 percent to 4.49 billion compared with 2001. Total revenue per available seat mile (RASM) was 7.06 cents in the third quarter of 2002, down 6.1 percent compared with 2001, and total cost per available seat mile (CASM) was 8.39 cents in the third quarter of 2002, an increase of 13.1 percent as compared with 2001. Mainline CASM, excluding fleet charges and the U.S. Government grant, was 7.23 cents, a decrease of 3.5 percent.
For ATA`s scheduled service, RPMs increased 17.5 percent to 2.74 billion, ASMs increased 21.7 percent to 3.63 billion, and passenger load factor decreased 2.7 points to 75.4 percent compared with 2001. Scheduled service yield declined 5.5 percent to 8.46 cents and RASM decreased 8.7 percent to 6.38 cents.
For ATA`s charter service, ASMs decreased 33.4 percent to 859.5 million; and block hours flown decreased 24.1 percent to 8,063 compared with 2001. Charter RASM increased 9.2 percent to 7.93 cents.
The Company`s unit fuel costs declined 25.8 percent in the third quarter compared with the same period last year as fuel prices declined 8.2 percent. ATA continues to be pleased with the efficiency of its new fleet of Boeing 737 and Boeing 757 aircraft.
For the first nine months of 2002, total operating revenues decreased 6.0 percent to $966.4 million. Scheduled service revenues increased 1.3 percent to $664.4 million and charter service revenues decreased 18.4 percent to $238.7 million. Total operating expenses, excluding fleet charges and the U.S. Government grant, decreased 2.1 percent to $1.01 billion.
The Company had a loss available to common shareholders of $117.4 million, or $10.04 per share (basic and diluted), compared with a loss available to common shareholders of $0.5 million, or $0.05 per share (basic and diluted) in the year prior. On a proforma basis, excluding the fleet charges and U.S. Government grant revenue, the Company`s loss available to common shareholders was $60.4 million, or $5.17 per share (basic and diluted) for the first nine months of 2002, compared with a loss available to common shareholders of $15.9 million or $1.39 per share (basic and diluted) for the first nine months of 2001.
System-wide RPMs increased 1.1 percent to 9.40 billion, and ASMs increased 3.7 percent to 13.05 billion for the first nine months of 2002. For ATA Holdings Corp., total RASM decreased 9.3 percent to 7.41 cents, and total CASM increased 2.7 percent to 8.24 cents. Mainline CASM, excluding fleet charges and the U.S. Government grant was 7.15 cents, a decrease of 4.2 percent.
For ATA`s scheduled service, RPMs increased 9.6 percent to 7.44 billion, ASMs increased 13.6 percent to 9.94 billion, and passenger load factor decreased 2.8 points to 74.8 percent. Scheduled service yield declined 7.6 percent to 8.93 cents and RASM decreased 10.8 percent to 6.68 cents. For ATA`s charter service, ASMs decreased 19.0 percent to 3.09 billion; and block hours decreased 10.4 percent to 29,681. Charter RASM increased 0.7 percent to 7.71 cents.
Summary of Recent Events:— ATA lowered its maximum, one-way domestic fares to $299, which allows last-minute travelers to purchase the best fare available. The airline also lowered administrative change fees and relaxed its stand-by policy— ATA launched its 30th Anniversary celebration with a year-long promotion that includes a new Travel Awards Program so loyal customers who fly ATA frequently earn free travel— The Air Transportation Stabilization Board (ATSB) announced that ATA was conditionally approved for the $148.5 million loan guarantee— During the quarter, ATA added one new Boeing 737-800 and two new Boeing 757-300`s to its fleet— The U.S. Government announced that ATA received the largest share of the new fiscal year`s military passenger contract— ATA announced the return of the airline`s founder, George Mikelsons as the Company`s Chief Executive Officer— Chicago Express, ATA`s commuter airline, started new air service to Cedar Rapids, Iowa; Lexington, Kentucky; and Flint, Michigan— ATA launched new nonstop scheduled air service from Indianapolis to Phoenix and New York (LaGuardia).