Skip to main content

ATA Air's Loss Widens

The carrier calls for worker wage concessions and adds a fuel surcharge to tickets.
  • Author:
  • Publish date:

ATA Holdings


Friday posted a wider first-quarter loss and asked its cockpit and cabin crews to defer raises until 2006 as it tries to cut costs.

The Indianapolis-based low-cost airline, formerly known as American Trans Air, reported a net loss of $64.7 million, or $5.47 a share, for the three months ended March 31, a six-fold increase from the same period last year, when it posted a net loss of $11.4 million, or 97 cents a share. No analyst earnings estimates were available.

ATA shares dropped 14 cents, or 1.8%, to $7.74.

Scroll to Continue

TheStreet Recommends

George Mickelsons, ATA chairman, chief executive and president, said the loss stemmed from rising fuel prices, a one-time charge related to the airline's debt and increased competition.

ATA, the 10th-largest airline in the country, had a $27.3 million charge on its bond exchange restructurings as the result of a

deal that allowed it to avert bankruptcy and prompted Deutsche Bank in February to upgrade its sell rating to hold.

The company said it was asking cockpit and cabin crews to postpone pay increases for the rest of the year and for 2005. Salaries grew to $107 million for the first quarter, a 14.2% increase from the same period in 2003, when they were $94.2 million.

The airline announced a $2 fuel charge on one one-way fares to offset rising fuel costs, which grew by $7.2 million, or 9.6%, in the quarter. Oil prices have been high for much of the year, and only on Thursday did they retreat from an eight-day price spike in futures contracts that came close to breaking $40 a barrel.

ATA estimated its April revenue will grow 6.3% from the same time a year earlier. The airline reported a 5.9% quarterly increase in revenue passenger miles from the same time a year ago, and said its available system miles, or total capacity, grew 5.6% for the quarter over the year-ago period.