Atlantic Coast Pushes Ahead With Plans to Become Low-Cost Carrier

Updated from 12:14 p.m. EDT

Atlantic Coast Airlines (ACAI Quote) has picked an appropriate name for the low-cost service it plans to morph into next year: Independence Air.

The name was announced on Wednesday at the carrier's Washington D.C. hub, and it's fitting because ACA needs to fight off an unsolicited takeover bid by Mesa Airlines (MESA Quote) in order to turn itself into a low-cost airline. The announcement follows news late Tuesday that ACA plans to purchase up to 25 Airbus planes, which will be the backbone of Independence's service.

"We are very excited that Independence Air at Washington Dulles will create America's largest low-fare hub in terms of total departures -- in the fifth-largest air travel market in the U.S.," said Kerry Skeen, ACA chairman and CEO, in a statement.

But Independence's success is not assured. For the past six weeks, ACA has been waging a bitter battle against Mesa over the future of the company. On Oct. 6, Mesa announced a hostile takeover bid for ACA, and over the last six weeks, the war of words has intensified, with both companies suing each other and government officials calling for an investigation into the takeover bid.

While the courts sort out the lawsuits, ACA shareholders of record as of Oct. 23 will actually determine the fate of ACA, deciding whether or not to replace ACA's board with one that may be friendlier to Mesa's offer. But with ACA talking up Independence, shareholders will have more to consider when weighing Mesa's bid against ACA's low-cost plan, which was announced on July 28.

"In July, we announced our move forward with the low-fare carrier and then after consideration of the unsolicited Mesa offer, our board reaffirmed those plans. The offer was rejected and we continue to move forward," said Rick DeLisi, ACA spokesperson. "This announcement is another major step forward following in the order and sequence all along."