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

But ACA, which hopes to launch Independence in mid-2004, can't do so until the situation with Mesa is resolved and its lingering contact issues with UAL(UALAQ Quote) unit United Airlines are sorted out. Back in late July, when ACA announced plans to become a low-cost carrier, ACA declined to renegotiate lower rates to its contract to fly out of Dulles for United, which is restructuring under Chapter 11 bankruptcy protection.

United has since signed a memorandum of understanding with Mesa to replace ACA out of Dulles -- but only if Mesa's takeover bid is successful.

Late Tuesday evening, ACA announced that it had agreements to buy 25 planes from Airbus' A320 family of aircraft, which are favored by low-cost carriers and have a smaller number of seats than the wide-body aircraft used by network carriers. All told, ACA said it will take 15 planes, 10 A319s, which seat 132 passengers, and five A320s, which seat 156. The company has an option to buy another 10 A319s.

But ACA did not reveal specifics surrounding the financing of those planes, which are valued at $1.4 billion, or what affect the purchase would have on its balance sheet or cash position, which was a major reason why Mesa was attracted to the carrier.

"Fifteen of them are being purchased through Airbus and then the other 10 are on leases with our lessor partners," said DeLisi. "We do not disclose the details of contracts and financing, which is standard in the industry."

Shares of ACA and Mesa rose in reaction to the news Wednesday afternoon. After losing more than 2% earlier in the session, ACA gained 8 cents, or 0.8%, to $10.13, while Mesa added 2 cents, or 0.2%, to $10.56.