ATA's code-share deal with Southwest aids both

Paul

Veteran
Nov 15, 2005
1,102
0
ATA Airlines' new alliance with Southwest Airlines produced an estimated $30 million last year for the Indianapolis carrier, said ATA chief John Denison.

In a complex arrangement, ATA shed half its fleet and gave up the busy Chicago Midway hub in return for Southwest code-share rights and $87 million in loans and loan guarantees. Southwest since has forgiven $20 million of the debt.

Code-sharing means passengers on select routes can get off Southwest's airplanes and board ATA aircraft going to cities not serviced by the Dallas airline. Their baggage is switched automatically to the other airplanes.

While the $30 million isn't a fortune, it is a cash cushion that could reach $40 million this year. And it steers travelers to ATA, whose financial problems last year essentially forced the sale of its Midway hub to Southwest.

ATA came out of bankruptcy last week. But the question remains: How will it do deprived of its only hub?
Pretty fair, said Denison. "I expect to grow that business,'' Denison said of the Southwest alliance. "There should be planes added to the fleet as we move forward, I hope.''

Long Midway's leading airline, ATA decided the hub was unprofitable as jet fuel costs soared and rivals drove down ticket prices.

IndyStar