Exhibit 99
For Immediate Release Contact: Rick DeLisi
April 14, 2003 Director, Corporate Communications
Page 1 of 3 (703) 650-6550
Atlantic Coast Airlines Earnings Preannouncement
Dulles, VA, (April 14, 2003) - Atlantic Coast Airlines (ACA)
(NASDAQ/NM: ACAI), the Dulles, Virginia-based United Express
and Delta Connection carrier, announced today that earnings
for the first quarter of 2003 will differ materially from
published analysts' consensus estimates, that it is taking
steps to deal with the current difficulties in the airline
industry, and that it remains in discussions with Bombardier
to defer certain CRJ deliveries originally scheduled for
2003 and 2004.
The company's earnings for first quarter 2003 are materially
affected by the fact that the fee-per-departure rates paid
by United Airlines have not been set for 2003, with the
result that ACA continues to accrue and be paid revenue from
United at 2002 rates. Primarily as a result of decreases in
scheduled aircraft utilization, the existing rates for 2002
do not adequately compensate the company. Under ACA's
agreement with United, rates are to be reviewed each year
and modified to reflect changes in costs and developments
that have a significant impact. Although ACA has been and is
continuing to pursue discussions with United regarding rates
for 2003, the company now believes that this process will
not be timely completed with United.
In addition, the company's first quarter results were
significantly affected by severe weather conditions at its
Washington Dulles hub and many of the cities it serves in
the Northeastern and Midwestern United States, the effects
of damaged aircraft on operational results, additional
expenses for contingency planning and legal expenses
associated with the bankruptcies of both United and
Fairchild, and charges related to a payment to Delta Air
Lines to remove contractual restrictions on the use of its
ACJet subsidiary.
Assuming that ACA is not able to finalize rate adjustments
with United prior to reporting results for the first quarter
and including the effects of the items noted above, the
company anticipates that first quarter earnings will be in
the range of four to five cents per share. The company is
continuing to review and evaluate the effect of these items,
and will provide further detail when it announces first
quarter results on April 23, 2003. Due to industry
conditions and uncertainties regarding its situation with
United, the company did not previously provide earnings
guidance for the first quarter. However, the company
believes that the inability to finalize rate adjustment with
United and the other items noted above account for its
results being out of line with analysts' consensus
estimates.
Independent of the rate setting discussion with United, the
company is taking steps to address the current difficulties
faced by the airline industry and its partners:
- --Due to the unavailability of acceptable financing and
other uncertainties facing ACA in the coming months, the
company is continuing its discussions with Bombardier to
defer certain CRJ deliveries scheduled for 2003 and 2004.
In connection with potential changes in its CRJ delivery
schedule, the company is reviewing the retirement plan for
its fleet of J-41 turboprops, a plan that is subject to
change depending on the outcome of the discussions with
Bombardier.
- --The company announced that it has commenced an aggressive
cost reduction effort to lower its cost to its major airline
partners and ensure that its costs remain competitive in a
difficult revenue environment. The cost reduction effort
includes the following:
Effective April 1, most salaried employees' base
salaries were reduced by 5-10%, and all of the
company's bonus plans were eliminated or reduced.
These cuts affect the senior management group the most,
resulting in an effective reduction of between 30-40%
of potential cash compensation.
Approximately 330 employees will be subject to a
reduction in force in the coming months, including 197
pilots. The pilot furloughs are necessary to bring crew
numbers to levels appropriate for current aircraft
utilization and changes to the fleet plan now
anticipated by the company.
Additional cost reduction measures are being
implemented including the renegotiation of vendor
agreements and a reduction in capital expenditures.
Chairman and Chief Executive Officer Kerry Skeen said, "It
is especially difficult for us to take these steps,
including reductions in compensation and furloughs, given
the dedication and unwavering effort of our employees over
the last 12 months. However, it is also incumbent on us
during this difficult time to ensure that ACA is positioned
to offer a competitive product at a competitive price that
is in step with what passengers are willing to pay,
particularly in light of all the factors currently affecting
passenger traffic and the anticipated impact on industry
revenue. This is the first time we have had to furlough
crew members since 1995 and it is not without remorse that
we must proceed."
Statements in this press release and by company executives
regarding its relationship with United Airlines, Inc. and
regarding projections and expectations of future aircraft
deliveries, availability of financing, future payments by
United, operations, earnings, revenues and costs represent
forward-looking information. A number of risks and
uncertainties exist which could cause actual results to
differ materially from these projected results. Such
factors include, among others: the extent to which the
company accepts regional jet deliveries under its agreement
with Bombardier, and its ability to delay deliveries or to
settle arrangements with Bombardier regarding undelivered
aircraft, United's decision to elect either to affirm all of
the terms of the company's United Express Agreement, or to
reject the agreement in its entirety, the timing of such
decision, any efforts by United to negotiate changes prior
to making a decision on whether to affirm or reject the
contract, United's ability and willingness to make future
payments to the company under the United Express Agreement,
the company's ability to collect
pre-petition obligations from United or to offset pre-
petition obligations due to United, and willingness of
finance parties to continue to finance aircraft in light of
the United situation and of market conditions generally.
These and other factors are more fully disclosed under "Risk
Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in ACAI's
Annual Report on Form 10-K for the year ended December 31,
2002. These statements are made as of April 14, 2003 and
ACA undertakes no obligation to update any such forward-
looking information, whether as a result of new information,
future events, changed expectations or otherwise.
ACA operates a fleet of 142 aircraft-including 112 regional
jets-and offers over 850 daily departures, serving 84
destinations in the Eastern and Midwestern United States as
well as Canada.
Atlantic Coast Airlines employs approximately 5,000 aviation
professionals. The common stock of parent company Atlantic
Coast Airlines Holdings, Inc. is traded on the Nasdaq
National Market under the symbol ACAI. For more information
about ACA, visit our website at www.atlanticcoast.com.