ATA Reports Second Quarter

INDIANAPOLIS—(BUSINESS WIRE)—July 29, 2003—ATA Holdings Corp. (Nasdaq:ATAH) (the “Company”), parent company of ATA Airlines, Inc., today reported a second quarter income available to common shareholders of $40.8 million, or $3.47 per share (basic) and $2.68 per share (diluted), compared with a loss available to common shareholders of $57.9 million, or $4.92 per share (basic and diluted) in the second quarter of 2002. The 2003 income available to common shareholders for this period included $37.2 million, or $3.16 per share (basic) and $2.42 per share (diluted), received under the Emergency Wartime Supplemental Appropriations Act of 2003 (“Supplemental Act”). The Company ended the 2003 second quarter with $186.0 million in unrestricted cash.
Total operating revenues for the second quarter of 2003 were $388.1 million, a 21.8 percent increase compared with 2002. Scheduled service revenues increased 23.8 percent to $278.0 million. Total charter service revenues increased 28.3 percent to $94.6 million. Total operating expenses decreased 12.1 percent to $332.2 million, including the receipt of funds under the Supplemental Act.
The Company decreased its cost per available seat mile (CASM) by 30.4 percent to 6.19 cents in the second quarter of 2003 compared to 8.89 cents in the second quarter of 2002. As indicated in the table below, excluding the effects of U.S. Government funds and aircraft impairments and retirements, CASM declined 15.3 percent to 6.88 cents in the second quarter of 2003 compared to 8.12 cents in 2002.

System-wide revenue passenger miles (RPMs) increased 21.1 percent to 3.78 billion, and available seat miles (ASMs) increased 26.4 percent to 5.37 billion compared with 2002. Consolidated revenue per available seat mile (RASM) was 7.23 cents in the second quarter of 2003, down 3.6 percent compared with 2002.
For ATA`s scheduled service, RPMs increased 26.6 percent to 3.19 billion, ASMs increased 26.6 percent to 4.17 billion, and the passenger load factor of 76.5 percent was unchanged compared with 2002. Scheduled service yield declined 2.1 percent to 8.71 cents and RASM decreased 2.2 percent to 6.66 cents.
George Mikelsons, Chairman, Chief Executive Officer and President, said, “I am pleased to announce that the efforts put forth by the entire ATA team over the last several months were rewarded in the second quarter by profitable results. The public has strongly endorsed ATA`s product: new aircraft with comfortable seating, advanced seat assignment and a reliable, customer-friendly operation. In fact, about 1,000 people every day continue to enroll in ATA`s Anniversary Travel Awards customer loyalty program introduced in October 2002. But, in this industry-wide weak revenue environment, a good product alone doesn`t guarantee a profit. It was therefore critical that we reduce our CASM to a level below seven cents, which I established as a second quarter goal for the Company. I am exceedingly proud of all ATA employees for their accomplishments in returning the Company to profitability during this quarter.”
“We are very pleased with the low-cost financial performance of the Company in the second quarter,” said David M. Wing, Executive Vice President and Chief Financial Officer. “The low CASM accomplished during the period was a result of several important factors. The airline increased its average daily utilization of narrow-body aircraft by 15.4 percent, and wide-body aircraft by 57.5 percent, in the second quarter of 2003 as compared to 2002, and enjoyed significant operating expense improvements in 2003 as a result of the introduction of the Company`s new fleet of Boeing 737-800 and 757-300 aircraft. And, our Company has been successfully focused on implementing cost-efficiencies across every area of the Company in order to reduce unit costs in a period of significant capacity growth for ATA.”


For the first six months of 2003, total operating revenues increased 17.4 percent to $761.8 million as compared to the first six months of 2002. Scheduled services revenues increased 20.8 percent to $522.8 million, and charter service revenues increased 21.3 percent to $206.9 million. Total operating expenses increased 0.9 percent to $704.3 million. This includes a $37.2 million decrease to 2003 operating expenses due to funds received under the Supplemental Act.
The Company had income available to common shareholders of $29.5 million, or $2.50 per share (basic) and $1.97 per share (diluted), compared with a loss available to common shareholders of $56.4 million, or $4.84 per share (basic and diluted) in the prior year. At June 30, 2003, the Company had a shareholders` deficit of $90.5 million.
ÊÊÊÊSystem-wide RPMs increased 16.2 percent to 7.16 billion, and ASMs increased 24.5 percent to 10.65 billion compared with 2002. Consolidated RASM was 7.15 cents for the first six months of 2003, down 5.8 percent compared with 2002.
For ATA`s scheduled service, RPMs increased 24.9 percent to 5.88 billion, ASMs increased 27.0 percent to 8.02 billion, and the passenger load factor of 73.3 percent decreased 1.2 points compared with 2002. Scheduled service yield declined 3.3 percent to 8.90 cents, and RASM decreased 4.8 percent to 6.52 cents.


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