ATA Slashes Flight Schedule, Furloughs 1,500 Workers

INDIANAPOLIS--Sept. 18, 2001--ATA (American Trans Air, Inc.)(NASDAQ:AMTR)has announced plans to reduce its flight schedule by 20 percent, retire its entire fleet of 727-200s by next month, and furlough approximately 1,500 employees. ATA said the layoffs are system-wide and added that the company does not yet know how many Indiana workers may be affected.

America West Airlines (NYSE: AWA) also announced that it will reduce its flight schedule by approximately 20 percent and will eliminate approximately 2,000 positions.

ATA said its actions are a direct result of current and anticipated effects on the demand for air travel caused by last week's terrorist attacks in New York City and Washington, D.C., were put into place on Monday.

"The uncertainty of the U.S. economy and market had already weakened the airline industry," said John Tague, ATA President and CEO. "Last week's tragedy has accelerated dramatically this industry decline."

The Air Transport Association on Monday said the industry was seeking $24 billion in assistance, including $5 billion in direct aid. The attacks have suppressed demand for air travel so much that domestic flights are half full or less, some U.S. airlines have said. The ATA forecasts traffic could be down 25 to 65 percent for upcoming weeks and months as people who are afraid to fly simply cancel or postpone their trips.

"The airline industry is going to need an extraordinary effort from its employees, the business community and the government if it is to stabilize. It is imperative that the Federal Government takes significant and immediate decisive action to protect our nation's aviation system," he added.

"In my roughly 30 years in this business, I have never witnessed a situation of this magnitude," said George Mikelsons, ATA Chairman and founder. "Recovery will require extraordinary efforts by the employees of the industry and, importantly, the government. I am confident of both."

Keith Stucker, McDonald Investments analyst in Indianapolis, said as time goes on — and in the absence of any threats to air travel — passengers will become more confident about flying. He adds that as the industry consolidates further, other airlines stand to benefit. Specifically, Stucker points to news that Midway Airlines has ceased operations. That, Stucker says, should bode well for ATA, which has recently been courting the business traveler and expanding into the Chicago market.

ATA's flight schedule is being updated continuously and is available at its Web site, www.ata.com, through its reservations system, and through all travel agencies.

ATA is the nation's 10th largest airline based on passenger revenue miles.