ATA changed its parent company's name from
ATA Holdings to Global Aero Logistics and reached an agreement to
acquire World Air Holdings, parent company of World Airways and
North American Airlines.
World Air has been
operating since 1948. Via its long-standing contract with the Air
Force's Air Mobility Command, World Air would provide Global with
another big piece of military charter business. Military charters
account for about half of ATA's revenue.
North American,
like ATA, flies a mix of charters and scheduled service, including
nonstop service from Baltimore/Washington and New York to points in
west Africa.
World Air Holdings
acquired North American in April 2005 for $35 million.
Under the proposed
deal, Global Aero Logistics would acquire World Air Holdings for
$315 million in an all-cash transaction. Global said current
operations would continue as normal for each of its three
subsidiaries, including ATA.
Global announced
the deal April 5 and expects to complete the transaction in the
third quarter, pending approval from World's stockholders and
government regulators.
Global President
and CEO Subodh Karnik said ATA Holdings changed its name because
the new name "better reflects our company's diverse, worldwide
operations."
ATA, now in its
34th year, was the country's 10th-largest airline when it filed for
Chapter 11 in October 2004, but it emerged in early 2006 as a much
smaller carrier dependent on its new codeshare relationship with
Southwest.
Southwest outbid
AirTran for ATA assets in late 2004 in a $117 million deal that
included the acquisition of six ATA gates at Chicago Midway, $40
million in debtor-in-possession financing and the agreement to
codeshare with ATA upon its emergence.
Since its emergence
from Chapter 11, ATA's scheduled service, including flights to
Hawaii, effectively has become an extension of Southwest's network.
But ATA makes about an equal amount of revenue from its charters
for the military and other government and commercial
customers.
ATA's 29-aircraft
fleet includes 737s, 757s and Lockheed L-1011 aircraft. North
American flies 10 extended-range 767 and 757 aircraft. World
Airways flies 17 MD-11 and DC-10 aircraft.
World Air Holdings
called 2006 a "challenging and difficult year" and said last
September that selling the company was a possibility. The company's
challenges included being put "on penalty" by the Air Mobility
Command during the second quarter for not meeting contractual
on-time performance levels (it was taken off penalty June 20 after
improving) and an unexpected curtailment of troop movement in the
last half of December.
NASDAQ delisted
World Air last May for failing to file its annual financial report
for 2005 and its 2006 first-quarter report. World Air hired a new
CFO and said it was strengthening its financial and accounting
staff and capabilities.
Since the
delisting, World Air stock has been trading on Pink Sheets under
the ticker symbol WLDA.PK. Pink Sheets provides pricing and
financial information for over-the-counter securities but is not a
member of the National Association of Securities Dealers and is not
regulated by the Securities and Exchange Commission.
To
contact reporter Andrew Compart, send e-mail to [email protected].