ATA To Offload Chicago Express Subsidiary

February 7, 2005

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ATA Airlines on Monday said it has put its Chicago Express regional airline up for sale as part of its effort to reorganize under bankruptcy protection.

ATA said the move is part of a recent decision to change its route network.

Chicago Express, which operates as ATA Connection, offers a feeder service connecting Midway Airport and Indianapolis to various small- and medium-sized cities. It has a work force of 600.

Some of the regional airline's most valuable assets are its federal operating certificates, but it also has a fleet of 16 Saab aircraft, two of which are owned and the rest are leased, Indianapolis, Indiana-based ATA said.

"A stand-alone application for a new certificate could take up to two years before approval by the federal government," ATA Vice President and Chief Restructuring Officer Sean Frick said in a statement.

"We believe there is substantial value for a buyer to begin air transportation service with this existing operation," he added.

ATA, which filed for Chapter 11 bankruptcy protection in October, is looking for ways to cut costs and raise money after being hit by soaring fuel prices and competition.

The airline accepted a USD$117 million bid in December from Southwest Airlines for some assets, including the lease rights to six of ATA's 14 gates at Chicago's Midway Airport.

(Reuters)