State of the Airlines

Tuesday, February 22, 2005

NEWS: ATA Airlines Elevates Denison to CEO

In late January, ATA Airlines brought in John Denison to assist in the restructuring efforts for the bankrupt carrier. I posted that I wasn't the slightest bit surprised that it just so happened Mr. Denison is a retired executive from Southwest Airlines. You will recall, dear reader, that Southwest Airlines bought up 30% of ATA which gave the struggling carrier much needed cash. But I have always proposed that this move was simply a prelude to something larger. And now today's news...ATA Holdings have named Mr. Denison the new CEO for the airline. You'll forgive me if I am, once again, not surprised.

Somehow I feel as though I am watching a chess game. Each move made by Southwest, no matter how innocuous on the surface, seems to hint at the end game. Anybody remember when Southwest Airlines bought Morris Air in 1994? Southwest bought them to facilitate further expansion. Granted the situation is different, Morris Air was a healthy airline with all the same aircraft making it an easy move for Southwest. ATA is ill and their fleet contains some aircraft (Boeing 757's) that don't fit the Southwest mold. So their approach to ATA is more cautious. But I truly believe the end game is the same, continued expansion for Southwest Airlines. ATA will become yet another piece of the Southwest machine.