The Incredible Shrinking ATA

Remember when ATA was considered a “major” carrier with over $1b in annual revenue? It seems like so long ago now. They had a nice operation at Chicago/Midway and they had Indianapolis, Hawai’i, etc. Now, they’ve got just about nothing after announcing that they’re completely shutting down the remains of their Midway operation.

08_03_12 tzl1011It was only about 4 years ago or so that airlines started fighting over who would bring ATA out of bankruptcy. America West was interested in establishing a Chicago hub as was AirTran. But in the end Southwest won the race to help the airline out. They took just about everything ATA had and made the airline a puppet for entering congested airports, serving overwater destinations, and serving the international world. A codeshare was set up, and everything seemed to be ok.

They’ve been shrinking ever since. There were a handful of routes started up to try to feed Southwest. Routes like Houston/Hobby to New York/La Guardia failed miserably and disappeared. Denver came online, but when Southwest entered the market, ATA walked away. Late last year, ATA announced it would be pulling out of Washington/National and New York/La Guardia altogether. Apparently the Southwest name wasn’t enough to make the flights pan out.

But there was still hope for the airline to become the international feeder for Southwest. They had a nice and easy customs and border patrol facility at Midway that served places like Guadalajara. As of June 7, all of that will end as well.

What’s left? Almost nothing. They still have their 80 flights to Hawai’i per week:

Las Vegas – Honolulu (daily)
Los Angeles – Honolulu (twice daily)
Los Angeles – Maui (daily)

Oakland – Hilo (6 times a week)
Oakland – Honolulu (twice daily)
Oakland – Lihue (4 times a week)
Oakland – Maui (twice daily)

Phoenix – Honolulu (daily)
Phoenix – Maui (daily)

And that’s all that feeds Southwest. Presumably the problem of a 5 hour overwater flight is not something Southwest wants to tackle on its own yet, at least not with the aircraft they have, but you have to assume it’s coming eventually.

ATA is starting to do some Latin flying from Miami to Guatemala City and San Jose, Costa Rica (both daily), but that looks to be run in conjunction with USALatinSky, so it’s not really their own scheduled service (I think).

And that’s it. The rest of the airline has gone back to its charter routes, and that’s probably where all the focus will be in the future. You’ll still see ATA airplanes around, but it probably won’t be a on scheduled basis for the most part. I wouldn’t be surprised to see Hawai’i go away at some point as well, especially as fuel prices start to climb and charter flights look better and better on the bottom line.


17 Responses to The Incredible Shrinking ATA

  1. Jason H says:

    I don’t think SWA’s business model would work for a long over-water flight, regardless of the fares. With their lack of amenities I don’t think they would do well in the Hawai’i market. I for sure wouldn’t want to sit on a 737 for 5 hours with no food or entertainment.

    I think if ATA pulls out of Hawai’i, SWA is going to be forced to link up with one of the “rouge” carriers that are outside of alliances (SWA and Alaska or SWA and Hawaiian) to continue “serving” Hawai’i for their passengers.

  2. Courtney says:

    I have to disagree with you on this one, Jason. There are two types of pax that will be flying SWA/ATA to Hawai`i: frequent flyers and those leisure travelers who are fully aware of Southwest’s amenities. It’s all about expectations, and Southwest has set the expectation that they will give you transportation, a bag of peanuts, and a drink for a low price.

    Also don’t forget that the Hawai’i routes are not new for ATA. Quite the contrary, they have been the mainstay of ATA’s network for years. There is already a gaggle of passengers who have been flying ATA to the islands for quite some time, and it stands within reason that these routes are profitable as they’re about all that’s left. Besides, what better passenger to throw on ATA than a peanut-eatin’, low-fare-searchin’, no-entertainment-system-needin’ Southwest passenger?

  3. DRG says:

    I wonder what the impact has been on jobs and whether the folks responsible for running ATA back during the bankruptcy wish the company had gone with AirTran.

  4. CF says:

    You have a good point, Jason, and I’m starting to rethink my assertion a little. I mean, ETOPS requirements mean more fuel and more cost. It also means having a small subfleet which is something they won’t really want to do. If they can’t make the transcon flights work, what’s to say that more expensive Hawai’i flights will?

    There’s already a flatter fare structure in Hawai’i, so it’s not like they can bring much in the way of fare relief. It really may just end up being a frequent flier destination, in which case using someone else is ideal.

    Courtney – While ATA has been flying there for years, a lot of that was done for Pleasant Hawaiian (they even painted the planes that way). They lost that contract a couple years ago, so it’s definitely on shakier ground.

    Remember, these guys now own World and North American and they just canceled all of North American’s scheduled flying. I doubt they’ll hesitate to cancel Hawai’i if it stops making money.

  5. Trent880 says:

    They’ve already pulled out the Latin Sky’s nonsense from the schedule. I think it was in OAG for about a week, maybe two.

  6. Zach says:

    ATA’s demise is sad. Their MDW-LGA service was the most convenient CHI-NYC product around. Beyond that, aren’t they of the great survivors from the post-deregulation age that swallowed up carriers like Eastern and Branniff? I hope they’re able to survive, even as a Hawaii niche airline.

  7. Asad says:

    the last time I checked you couldn’t use the free tickets you got from southwest on the hawaii flights or any other flight that was on a ATA route. It always made those flights look less like southwest and more ATA which was a downer for me, the whole point of southwest is to get on the plane quickly, get there and get off, and it’s cheap. Remove those qualities and you see why no one was excited about the ATA routes.

  8. CF says:

    Actually, ATA’s roots stretch back to 1972. You can read a historical timeline on their website.

  9. CF says:

    Asad – You can use free tickets to go to Hawai’i but you have to use two coupons instead of one. I think the only appeal to Southwest travelers is that it adds new destinations where Southwest doesn’t fly. Other than that, I think you’re right.

  10. Mike says:

    Once Southwest figures out how much a Phoenix, LAX, or Burbank route to Honolulu would bring in, I’m sure they’ll go for it. If your 5 hr. figure is correct, the fuel costs and such shouldn’t be too bad and they should put asses in the seats quickly.

  11. Mike says:

    I’d like to know what kind of agreement Southwest has with ATA on the Hawaii routes. Like Asad said, I’m sure a lot of loyal Southwest customers try to stay away from those ATA flights.

  12. Jeff K says:

    I think they’re key to their re-bound should be to put the L-1011’s back on scheduled routes…but i can only hope…

    If they pull Hawaii that would hit the bottom line for me as they are consistently the cheapest by *far* on direct flights from the Bay Area. And it was a nice option to upgrade to Biz at the gate as it was priced reasonably.

    It has been kinda sad watching them shrink over all – even thou they basically shouldn’t have grown as fast as they did in the first place.

    Their old SJC-MDW-GRR route was a staple for me from 1999-2001 when visiting the parents…granted it was a cattle-car from SJC-MDW but the B1900 flight from MDW-GRR yaw’ing from the winds at 10000 feet all the way over Lake Michigan was a thrill ride I still miss.

  13. Jeff K says:

    one further note (beyond my bad grammar in the previous, half-asleep post…) is that I believe if they did allow SW customers to book award flights on ATA metal to Hawaii the traffic would explode (ie it’d be a Zoo). Of course ATA would struggle even further as it would just be a dumping ground for SW.

  14. Ana says:

    I felt so bad for ATA shutting down MDW which connects to LGA (to HOU), DCA, ONT, DFW, CUN, GDL,and OAK.To consider the profitability of its routing. Its like WN is eating all of TZ’s routing. TZ even lost control of their Florida flights! Codeshare agreement with WN affects a lot for TZ’s fight against bankruptcy. WN benefits a lot from this agreement.

  15. Susan says:

    Jeff K and Ana: The new CEO of ATA’s parent co., Global Aero Logistics, is John Denison. He’s the ex-CFO of Southwest Airlines and ex-CEO of ATA. His former positions @ Southwest should mean he works well with current Southwest CEO Gary Kelly, who was Southwest CFO after John Denison. A grand plan underway?

  16. Dorothy says:

    In a strange coincidence, I was checking out SW for flights to Hawaii yesterday — and got an error message saying that the route would be discontinued after 4/13/08 or somesuch. Foreshadowing ATA’s demise?

  17. Pingback: The Cranky Flier » An ATA Obituary

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