ATA to outsource heavy maintenance, customer service in cost reduction initiative

By Caroline Salls

Pittsburgh, July 15 - ATA Airlines, Inc. is taking a number of cost reduction initiatives aimed at making the airline more competitive as it continues on its track to emerge from Chapter 11 bankruptcy, including expanded outsourcing of the airline's heavy maintenance program, strategic outsourcing activities and outsourcing its customer reservations call center, according to a company news release.

About 450 positions are affected by the restructuring, including 350 maintenance and 100 reservations personnel, the release said.

ATA will eliminate some jobs, while some employees will be furloughed with the possibility of being called back to the company.

ATA has reduced its total workforce by 40% over the last two years, to 4,687 employees from about 7,800 employees, as a result of the airline shedding unprofitable routes and downsizing its fleet.

"ATA has for decades used outside facilities for heavy aircraft maintenance. Expanding that practice delivers the safety we demand in the most efficient way possible," chief executive officer John Denison said in the release.

"ATA must adapt to this new environment to survive. The anticipated cost savings of $100 million over the next five years are critical to our emerging from Chapter 11 as a company with a competitive cost structure."

According to the release, ATA has proposals from several firms competing to perform heavy maintenance on its fleet of 45 aircraft.

By restructuring many maintenance practices, ATA said it expects to save about 20% of the airline's total maintenance costs.

"This spring, we told everyone that we were studying the costs associated with every maintenance option," senior vice president of flight operations and maintenance John Graber said in the release.

"Though we are an excellent airline with a productive in-house maintenance operation, we simply can't compete with giant, commercial heavy check maintenance facilities."

ATA will maintain a significant level of maintenance work in Indianapolis and throughout its system, according to the release.

ATA is also moving to an outside service provider in its customer reservations area, which affects about 100 positions at the company's Indianapolis Reservation Center and saves ATA about $1 million annually, or about 15% of its reservations budget.

"This has been a very difficult decision for us, especially given the quality product that our own agents have consistently offered our customers," senior vice president of customers and ground operations Doug Yakola said in the release.

"Ultimately, the incremental savings of $5 million over five years could not be ignored."

ATA, an Indianapolis-based airline holding company, filed for bankruptcy on Oct. 26, 2004 in the U.S. Bankruptcy Court for the Southern District of Indiana. Its Chapter 11 case number is 04-19866.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.