ATA Holdings Corp. appears to have averted another financial crisis, reaching a tentative agreement with its pilots last week to extend concessions another four months.
The Indianapolis airline warned in previous court filings that it was "at the risk of shutdown and liquidation" if U.S. Bankruptcy Court failed to mandate an extension of concessions.
Whether the warning was posturing-or a sign of an even more precarious financial situation-is hard to decipher amid ATA's Chapter 11 reorganization.
The proposed pact with pilots appears to save ATA $4.5 million per month, based on the airline's projection of what would happen if concessions were lifted.
ATA's 1,000 flight-deck crew members represented by the Air Line Pilots Association agreed last March to a 20-percent pay cut and a reduction in what the airline contributed to their pension savings. That was just one of a couple of previous givebacks pilots have agreed to make to keep ATA alive.
ATA posted a first-quarter operating loss of nearly $43 million. Its cash levels have fallen to $101.5 million, from $139.6 million at the end of December. It is relying largely on a bailout from Southwest Airlines, which is providing $117 million that includes cash from selling the Dallas airline most of its Chicago Midway Airport gates.