Shares of Dulles, Va.-based Atlantic Coast Airline Holdings
Atlantic's United Express service currently provides 85% of total revenues, the rest flying in on its Delta Connection operation with Delta Air Lines
Atlantic has produced consistent free cash flow outside of the slow first quarter, but as yesterday's market showed, shareholders will bail if the business is threatened. The demise of the United deal may serve as a catalyst for the new low-fare structure that Atlantic reportedly has considered for two years, but I suspect another force at work, too. It's called JetBlue
This low-fare carrier, and Whitney Tilson's favorite, currently flies from Atlantic's Dulles hub to California and Florida and could certainly expand. Skeen doesn't need that. By emphasizing that Atlantic has the most departures a day from Dulles and plans 275, plus up to an additional 50 with plans to buy 15 to 25 more planes by early 2004, he may be trying to keep JetBlue from weighing in further.
All of this is good news for the Baltimore-Washington area, where travelers must now drive to Baltimore-Washington International Airport for low fares, courtesy of Southwest
To be sure, Atlantic faces headwinds from JetBlue, Southwest, ATA
With about $189 million in cash and equivalents and only $53 million in total debt as of Mar. 31, 2003, Atlantic will get a running start. Whether it takes off is pure speculation.