Kelley School of Business Presentation
ATA Holdings Corp.
Sean Frick
Director,
Financial Analysis & Strategic Planning
February 3, 2003
Northwest’s Non-Stop North American Routes
Legacy Hub and Spoke
Carriers
Next Generation Low
Fare Carriers
American Trans Air
Cost Advantage Allows ATA To Offer Lower Fares
Q4 2003 Airline Unit Cost (Cents per Available Seat Mile)
14
12.9
12.5
12
8.3
8.1
7.5
8
9.8
9.7
9.1
9.3
7.6
6.9
5.9
6
4
2
irw
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ica
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on
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A
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Cost per ASM (cents)
10
10.7
10.2
5
American Trans Air
ATA Outperforms Industry
Q3 2003 ATA Performance vs. Major Airlines
30%
27.6%
23.8%
25%
22.9%
21.5%
21.1%
18.6%
17.0%
14.1%
15%
12.1%
11.4%
10%
6.8%
5%
ir
wa
ys
el
ta
U
S
A
D
d
ni
te
U
ic
an
A
m
er
ie
r
Fr
on
t
es
or
th
w
N
So
ut
hw
es
t
t
l
on
tin
en
ta
la
sk
a
Source: Company Press Releases
C
m
er
A
A
W
es
t
TA
0%
A
EBITDAR Margin
20%
6
American Trans Air
• ATA’s fleet was one of the
oldest in the industry
Rapid Fleet Modernization will Improve Cost Structure
• With the new aircraft order,
ATA’s fleet is becoming the
most modern in the industry
Industry Fleet Age
20
18.8
18
17.2
16
Aircraft Deliveries
14
12
10.8
10.7
10.3
10
9.2
9.1
9.1
8.9
8
7.0
5.5
6
4
2.4
2
Un
it e
d
wa
ys
US
Ai
r
sk
a
Co
nt
in
en
ta
AT
l
AT
A
(
A
9/
30
(S
ch
/0
3)
ed
ul
ed
Se
rv
ice
)
Source: Other airlines’ data from “U.S. Airlines Fleet Report” Deutsche Bank. October 1, 2003
Al
a
W
Am
er
ica
er
Am
So
ut
hw
es
t
es
t
n
ica
ta
De
l
(1
2/
31
/0
0)
AT
A
No
r
th
w
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t
0
7
American Trans Air
History of ATA
1973
J. George Mikelsons founds Ambassadair Travel Club
in Indianapolis
1978
Deregulation of U.S. Airlines
1981
ATA begins Charter service, total revenues of $30.5M
1986
ATA begins Scheduled service, total revenues of $185M
1993
ATA completes initial public offering on the NASDAQ
1999
Revenues exceed $1.1B, making ATA the 11th US major airline
2000
ATA completes transaction for 50 new fully financed aircraft
2001
ATA begins successfully implementing new fleet and opens
new Midway Terminal
2002
ATA opens new international terminal in Midway
2003
ATA earns first annual profit since 9-11
2004
ATA successfully restructures its debt and lease obligations
8
American Trans Air
ATA Company Profile
• 30th Year of Business
• Leading Market Share in Scheduled and Charter
Service
- # 1 Airline at Chicago-Midway and Indianapolis
- # 1 US Charter Airline
- # 1 Military Passenger Airline
• Re-fleeting to new 737 and 757 aircraft
- Youngest scheduled service fleet of any major airline
• Affordable Fare and Low-Cost Business Strategy
• 10th Largest Major Airline in the US
- $1.5B in Revenue in 2003
9
American Trans Air
• ATA’s revenue diversity has
benefited its performance since
the 9/11 terrorist attacks
ATA’s Revenue Sources
2003 Airline Capacity
100%
Military
16%
Other
10%
Indianapolis
Available Seat Miles
80%
Charter
5%
13%
Hawaii
13%
60%
40%
79%
Scheduled
Service
20%
64%
Chicago
Midway
0%
2003 ASMs
ASMs by Gateway
10
American Trans Air
• ATA leads the majors in
scheduled service passenger
growth for the past 5 years
Scheduled Service Growth Leads Industry Majors
5 Year Passenger Growth
140%
131%
120%
Percentage Growth
100%
80%
60%
40%
39%
15%
20%
12%
0%
-4%
-20%
-5%
-13%
-17%
-21%
-26%
Enplaned Passengers – 2003 (12 Months ended July) versus 1998 (12 Months ended July)
irw
ay
s
ni
te
d
U
S
A
U
elt
a
D
a
m
er
ic
aW
es
t
N
or
th
w
es
t
Co
nt
in
en
ta
l
A
m
er
ic
an
las
k
A
Source: Form 41 data
A
es
t
ut
hw
So
A
TA
-40%
11
American Trans Air
ATA is the #1 Carrier in Chicago-Midway and Indianapolis
ATA and Southwest Market Share
Indianapolis Enplanements Share
55.00%
25.00%
Oct03
3
Jul0
3
Apr
-0
3
Ja n0
Oct02
2
Jul0
2
Apr
-0
2
Ja n0
Oct01
20.00%
1
US Airways
12%
American
10%
ATA
Southwest
30.00%
Jul0
Northwest
12%
35.00%
1
Southwest
11%
40.00%
Apr
-0
Delta
13%
45.00%
1
United
10%
Ja n0
ATA
21%
Midway Market Share - Enplanements
50.00%
Others
11%
12
American Trans Air
•
•
•
•
ATA’s Scheduled Service Product
Curbside check-in
E-ticketing self service check-in
Online boarding pass print-out capability
Electronic Gate Readers
•
•
•
•
Advanced Seat Assignment
Comfortable leather seating
Minimum 32” seat pitch
25% increased capacity in new overhead bin
design
• 100% fresh air circulation (B737-800)
• Quiet in-cabin experience
• Improved quality of in-flight entertainment
– PAVE program to show targeted short spots
based on aircraft routing
– Recent full-length movies on longer flights
updated monthly
13
American Trans Air
Strategic Planning Profile
FINANCE
MARKETING
Pro Forma
Financials
Market
Analysis
Strategic Planning
- Functions as special projects /
internal consulting group
- Opportunity to work
with other departments
- Direct Exposure to upperlevel management on
Presentations,
Financial Releases,
Industry
critical projects
- Team Oriented
Process
Diagrams,
Labor
Negotiations
Comparisons
INVESTOR
OPERATIONS
RELATIONS
14
American Trans Air
Strategic Planning Process
Research
Analysis/
Modeling
Understanding
Communication
• Internet
• Economic modeling
• Group sessions
• Simplify
• Libraries
• Regression
• Brainstorming
• Encapsulate
• Proprietary
databases
• Risk Adjustment
• Hypothesis testing
• Present
• Excel
• Trade press
• Access
• SEC information
15
American Trans Air
Career Path
Vice President
MBA / Law School
Manager
Sr. Strategic Planner
Strategic Planner
Financial Analyst
Director
Staff Management
– Strategic Planning
– Finance
– Marketing
– IS
Staff
or
Clerical
Operations Management
– Maintenance
– Flight Operations
– Airport Services
– Customer Services
16
American Trans Air
ATA Kelley School of Business Alumni
Ken Wolff
Former CFO and Executive Vice President
Jack Schultz
Director, Accounting
Sean Frick
Director, Financial Analysis & Strategic Planning
Peter Tamulonis
Manager, Operations Productivity and Analysis
Ryan Poeppelman
Manager, Stations
17
American Trans Air
Creation
• Developed according
to GAAP
ATA’s “Five” Year Business Plan
Input
• Begin with aircraft
• Historical unit
• Regression Analysis
utilization, revenue, and
performed to determine expenses applied to
cost and balance sheet
create income statement
drivers
• Income statement
• Historical data from
flows into balance sheet
1997 to present input
and cash flow
into model and updated statements
monthly
• Adjust for unique
• Formatting and
transactions and
printing macros
management input
Output
Uses
• Detailed Financial
Statements (Income
Statement, Balance
Sheet, Statement of
Cash Flows, etc.)
• Special Projects
(Aircraft Acquisition
Deal, Privatization,
Government Loan
Application)
• Detailed Operating
Statistics (Departures,
Passengers, Seat Miles,
etc.)
• Supporting the
Management Decision
Making Process (Asset
Allocation, Cost
Control, Liquidity
Analysis)
• Meaningful Metrics
and Ratios (RASM,
CASM, EBITDAR,
Debt to Equity, etc.)
• Debt covenants
• Valuable source for
historical information
18
ATA Airlines, Inc.