Friday said it will offer more than $100 million for certain assets of
ATA Airlines in a forthcoming bankruptcy court auction.
Southwest's bid includes the acquisition of six Chicago Midway Airport gates currently under lease to ATA. The low-cost leader said the acquisition would increase its capacity there by 32%, supporting further expansion plans.
On Thursday, another potential bidder,
, said it would not make a bid in the auction.
The only other carrier likely to make a bid is
, which had previously reached a $90 million deal to take over ATA's 14 Midway gates, along with hard-to-get time slots at New York's LaGuardia Airport and Ronald Reagan Washington National Airport. Under the deal, AirTran would rely upon ATA's Boeing 737-800 jets during a six-month transition period.
But by filing for bankruptcy protection in late October, Indianapolis-based ATA opened itself up to competing bids. The court will handle the auction next week along with hearings to determine the disposition of ATA's assets and liabilities.
Southwest's bid, which will be formally submitted later today, also includes financing agreements and a code share agreement with ATA, covering certain flights from Chicago Midway to approximately nine ATA domestic nonstop destinations.
"This proposal is certainly good news for air travelers, as we continue to expand our flights and low fares from the new and improved Midway Airport," Southwest said in a statement. "We believe the proposal is good for Southwest and the city of Chicago. Finally, we believe our bid provides a superior reorganization opportunity for ATA and its stakeholders compared to the bid from AirTran Airways."
Southwest shares fell 14 cents, or 0.9%, to $15.58. Air Tran fell 11 cents, or 1%, to $10.88.