American Trans Air opts for more scheduled flights
Associated Press
| Getting rid of palm trees • NAME: American Trans Air • HEADQUARTERS: Indianapolis • FOUNDED: 1973, by J. George Mikelsons, chairman and owner of 72 percent of the common stock of ATA's parent company. • SERVICE: Scheduled flights to 30 cities in the United States, Mexico and the Caribbean; charters worldwide, including to Hawai'i. • EMPLOYEES: 7,500+ (all Amtran operations) • REVENUE: $1.3 billion in year ended Dec. 31, 2000 (all Amtran operations) • STRATEGY: Adding more scheduled flights for business and leisure travelers and reducing the percentage of military and tourist charter flights. Also upgrading its fleet to more efficient aircraft. • QUOTE: "We're getting rid of the palm trees," said chief operating officer James Hlavacek, referring to a logo redesign to reflect a growing emphasis on business travelers. |
NEW YORK — Business travelers fly from Chicago to New York on a plane that looks like it comes straight from a tropical charter. A palm tree and shining sun adorn the tail, and the featured drink is a rum cocktail.
The pilot, fitted out in a bomber jacket, has flown the airline's planes to Kosovo and delivered U.N. peacekeepers to East Timor, and the carrier has been known to quickly scramble a plane to transport Kurdish dissidents to Guam or Somali refugees to New York.
What kind of airline is this?
American Trans Air, long a little-known charter carrier for troops, government missions and package tours, is moving increasingly into the more profitable business of scheduled passenger flights. It is building its presence in the United States, Mexico and the Caribbean by offering low fares and a nationwide route system centered at Chicago's Midway airport.
The airline does have some hurdles to get over: a fleet loaded with gas-guzzling aircraft, and a name that often brings a blank stare from the public.
"For an airline that's been around 28 years, no one's ever heard of us," said James Hlavacek, the airline's chief operating officer. Some travelers confuse American Trans Air with AirTran, the budget airline that merged with the old ValuJet. The name of ATA's parent company, Amtran Inc., does nothing to ease the confusion.
ATA hopes at least its fares will be memorable, especially for last-minute and midweek travel.
One recent day, its next-day fare for an economy-class round-trip ticket was $249.50 from Chicago to Los Angeles and $455 from New York to Phoenix. The Chicago-Los Angeles trip was $2,504 from Chicago O'Hare on American, and $696.00 from Midway on Southwest. The New York-Phoenix fare on American was $2,449.
ATA has run some scheduled flights since 1986, but has been known mainly for charters. During the Gulf War, it moved troops and equipment on 496 flights in and out of Saudi Arabia, Kuwait and other locations. Other destinations on military flights have included Bosnia and Macedonia.
The same pilots, and some of the same planes, are used for routine flights in the United States and foreign charters.
It also offers a variety of U.S. charters, and flights to Hawai'i. Pleasant Hawaiian Holidays, for instance, the largest provider of Hawai'i package tours, leases aircraft from American Trans Air to get customers to the Islands. ATA has 6 percent of all the air seats into Hawai'i.
The airline plans to maintain some of its charter business, including military assignments, but is moving rapidly toward more scheduled flights. Last year, 64 percent of flights were scheduled, compared to 8 percent in 1990. Hlavacek predicted the percentage will grow to 75 percent within three years.
Adding scheduled service and offering low fares hasn't been cheap for the airline. After making a profit in 1999, Amtran lost $15.7 million last year, largely attributable to the cost of fuel and maintenance for its aging fleet of 727s.
Those Boeing jets will be replaced by next year with 737s that are expected to save $200,000 apiece monthly. In an interview at New York's LaGuardia airport, Hvalacek said Amtran may turn a profit as soon as this year.
The airline also faces salary unrest among its more than 1,000 pilots. Steven Smith, a Boeing 757 captain who heads the ATA unit of the Air Line Pilots' Association, says some ATA captains make less than half than even co-pilots on major airlines.
Hlavacek, who says the average ATA captain is paid $90,000 to $100,000 a year, won't comment on Smith's comparative figures. He says that ATA is fair to its pilots and that their job opportunities are far more varied than those at other airlines. Smith, too, acknowledges that ATA crews like the challenges of worldwide missions to rarely visited locations.
The pilots "get sent out with a credit card, a checkbook, cash and a $45 million airplane and they say to bring it back and don't scratch the paint," said Smith, who recalled how he once traded a case of Coca-Cola to move up in the refueling line while on a mission to Latin America.
"The pilots here are head and shoulders above a lot of other pilots in terms of some of the flying we do," he added.
Ray Neidl, an analyst at ING Barings who follows ATA, credited the airline with an effective strategy based on the Midway hub, an upgraded fleet and more scheduled service.
ATA founder J. George Mikelsons owns 72 percent of the company's common stock. Last week, he made an offer to buy the remaining common shares for $67.5 million. He said taking the company private will let management focus on strategic goals.
