"Midway method"

Saturday, October 30, 2004

Midway method 
City hears ATA-AirTran plan; Southwest sees 'huge opportunity' 
By Mike Nolan
The Chicago (IL) Southtown


Executives from ATA Airlines and AirTran Airways have told Mayor Richard
Daley that many Chicago-based ATA workers will keep their jobs once the
airline transfers it operations at Midway Airport to AirTran.

Daley earlier this week said he wouldn't back any gate-swapping proposal at
Midway that didn't include some guarantee of job preservation.

On Tuesday, ATA's parent, Indianapolis-based ATA Holdings Corp., filed for
bankruptcy reorganization and announced a deal to transfer its gates and
routes at Midway to AirTran Holdings, the owner of AirTran Airways, for
$87.5 million.

ATA has 14 gates at Midway and 3,200 employees in Chicago.

The deal requires approval from a bankruptcy court judge and Chicago's
Department of Aviation, which owns the gates at Midway and leases space to
airlines.

Daley on Thursday met with officials from both airlines. At that meeting
they had given him "their good word" that there won't be wholesale layoffs
as a result of the asset transfer, Daley said Friday, according to Crain's
Chicago Business.

A spokeswoman for ATA said the airline had "no comment on anything that was
discussed privately" with the mayor.

An AirTran spokesman did not return calls seeking comment. 

In its deal with ATA, AirTran hadn't made any commitment to hiring ATA's
employees. However, an AirTran spokesman had said earlier this week the
company would "look very favorably" on those workers as it takes over ATA's
operations.

Orlando, Fla.-based AirTran has fewer than 50 employees in Chicago. It
shares a gate at Midway and has eight daily departures.

ATA's Chapter 11 filing has generated interest in the carrier's assets from
competitors including America West and Southwest Airlines.

America West - which has limited service from O'Hare International Airport -
may be interested in parts, or all, of ATA. 

ATA's misfortune opens up a "huge opportunity" for Southwest, Gary Kelly,
Southwest's chief executive, said Wednesday. During Southwest's annual media
day at its Dallas headquarters, Kelly said expanding Southwest's operations
at Midway is a "top priority."

A Southwest spokeswoman, Linda Rutherford, wouldn't say Friday whether the
airline has contacted the city's aviation department about the possibility
of expanding into new gates at Midway. Southwest now has 19 gates.

Prior to ATA's bankruptcy filing, Southwest had no formal plan in place to
beef up its presence at Midway, Rutherford said.

What form the expanded service will take has yet to be determined.

"At this point we have asked the schedule planning department (at Southwest)
to look at different scenarios," Rutherford said. "They will look at what
that (new) service might be and where it might go."

Kelly didn't rule out the possibility of Southwest adding new destinations
from Midway, but that the "emphasis is on how we can expand the current
route structure," Rutherford said.

Midway is Southwest's fourth-largest operation, behind Las Vegas, Phoenix,
Ariz., and Baltimore.

As of Sunday, Southwest will boost the number of flights out of Midway to
two California cities, Los Angeles and Oakland, and two Florida
destinations, Orlando and Tampa. That will give Southwest 145 daily
departures from Midway.

Southwest carries nearly 40 percent of Midway's passengers.

Including its commuter airline, ATA Connection, ATA has about 170 daily
departures from Midway. Combined, ATA and ATA Connection serve 44 percent of
Midway's customers, according to the aviation department.


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