ORLANDO, Fla., Oct. 26 /PRNewswire-FirstCall/ -- AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE:AAI) , announced today that the airline has agreed, subject to certain conditions, to assume the Chicago Midway Airport gate leases and acquire certain other related assets including takeoff and landing slots at New York's LaGuardia and Washington's Ronald Reagan National airports of ATA Airlines, a unit of ATA Holdings Corp. (NASDAQ:ATAH) , for approximately $87.5 million. ATA Holdings Corp., and certain of its subsidiaries, have filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Indiana.
Under the agreement with ATA Airlines, AirTran Airways would assume ATA's leases on up to 14 gates at Chicago's Midway Airport, 19 time-controlled take-off and landing slots at New York's LaGuardia Airport and 8 such slots at Washington's Reagan National Airport. The deal must receive various approvals, including approval of the Bankruptcy Court in ATA's Chapter 11 proceeding. In the interim, ATA Airlines is to continue operating flights and business as usual at Chicago's Midway Airport.
AirTran Airways plans to introduce its fuel efficient, all new Boeing fleet on the routes from Chicago Midway, and intends to enter into a marketing agreement with ATA Airlines which is currently contemplated to include a code-share, frequent traveler program and other programs to benefit both carriers' customers. In conjunction with the code-share arrangement, the carriers, also intend to enter into an agreement to outsource certain flying during the transition of service from ATA Airlines to AirTran Airways at Chicago's Midway Airport.
"This proposal offers a great opportunity for both AirTran Airways and the City of Chicago as well as significantly aiding ATA in its reorganization," said Joe Leonard, chairman and chief executive officer of AirTran Airways.
"Adding a hub in Chicago is an important strategic expansion for AirTran Airways' growing network," stated Robert L. Fornaro, president and chief operating officer. "A Midwest hub complements AirTran Airways' strong East Coast network and will capitalize on a number of synergies in the cities we serve across the country. This addition will give AirTran Airways a true national presence. We look forward to increasing our service for the Chicago business and leisure travelers."
AirTran Airways is one of America's largest low-fare airlines - with 6,000 friendly, professional Crew Members and operating over 500 flights a day to more than 40 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, the world's busiest airport by passenger volume, where it is the second largest carrier. AirTran Airways, a subsidiary of AirTran Holdings (NYSE:AAI) , is the world's largest operator of the Boeing 717 and has America's youngest all-Boeing fleet. The airline recently added the Boeing 737-700 aircraft, one of the most fuel efficient and environmentally friendly aircraft flying today, to its fleet and looks to begin outfitting its planes with XM Satellite Radio this fall. For reservations or more information, visit http://www.airtran.com/ (America Online Keyword: AirTran).