=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/08/17/f= inancial1547EDT0203.DTL --------------------------------------------------------------------- Tuesday, August 17, 2004 (AP) ATA filing warns airline could run out of cash in early 2005 (08-17) 12:47 PDT INDIANAPOLIS (AP) -- The parent company of low-cost carrier ATA Airlines has warned it likely will run out of cash in early 2005 and might sell some assets or restructure. ATA Holdings Inc. lost $90.7 million during the first half of this year while contending with soaring costs of jet fuel and declining business for its military charters, the Indianapolis-based company said in a filing Monday with the Securities and Exchange Commission. ATA, while continuing a full schedule of flights, is negotiating with its pilots and flight attendants unions to gain concessions and cost savings. "Under current operating assumptions and absent any changes to existing aircraft lease obligations, the company does not expect to have sufficient cash to meet its cash obligations in the first quarter of 2005," ATA Holdings Corp. said in its report to the SEC for the quarter ending June 30. As of June 30, ATA had $150 million in cash on hand, down from $186 million at the same time last year. ATA's cash flow problems have been compounded because the bank that processes the airline's MasterCard and Visa payments has started holding onto the entire amount charged by a passenger until the flight takes place, according to the company's filing. Previously, the company would receive a portion of the ticket purchase in advance. This change, ATA estimates, will cut the company's cash balance by $20 million. For the first half of 2004, ATA had $778.1 million in revenues, up 2.1 percent from the first six months of 2003. Total passengers increased by about 6 percent to 5.9 million. The company blamed its financial problems on rising fuel costs and heavy competition that has kept fares low. For the first half of 2004, the company spent $168.1 million on fuel and oil, a 17.4 percent increase from the same period in 2003. After laying off about 200 of its 8,000 workers, ATA has asked those sti= ll on the payroll for concessions. ATA pilots last month agreed to $43 million in contract concessions, but the company has come back to them this month to raise the idea of additional concessions, said Erik Engdahl, executive council chair for the Air Line Pilots Association unit at ATA. Flight attendants rejected $8.9 million in contract cuts. To boost revenue, the company is launching business-class seating this month. Also, the company said it might begin service to Europe next year. "Even with these potential initiatives, the company faces significant risks beyond its control that could affect its long-term viability," the company stated. On the Net ATA: www.ata.com ---------------------------------------------------------------------- Copyright 2004 AP