ATA ceases operations

[EagleStar]

ATA filed for bankruptcy protection and today has discontinued all operations and cancelled all current and future flights. I want to alert you that with this shutdown, ATA is no longer honoring reservations or tickets.
We are advising all customers to seek alternative arrangements on other airlines that fly to their destination for their current and future travel if they still wish to travel. ATA has contacted other airlines and asked them to assist ATA travelers although these other airlines are not obligated to honor ATA tickets.
I realize this means you may receive a higher volume of calls from ATA ticketholders, which is why I wanted to contact you. We apologize for the disruption caused by the sudden shutdown of ATA, and regret the inconvenience it will have on passengers and the impact on our business partners.
A primary factor leading to these actions was the unexpected cancellation of a key contract for ATA’s military charter business, which made it impossible for ATA to obtain the funding necessary to continue operations or restructure the business. Another factor leading to ATA’s bankruptcy and shutdown was the dramatic and unprecedented increase in the price of jet fuel in recent months, which severely impacted the scheduled service part of our business.
ATA has made information available atwww.ata.com <http://www.ata.com (http://www.ata.com/)>, including a list of Frequently Asked Questions for Customers and a list of other airlines serving ATA destinations.
We are informing customers who purchased a ticket using a credit card to contact their credit card company for information about how to obtain a refund for unused tickets. Customers who purchased a ticket directly from ATA with cash or a check may be able to obtain a full or partial refund by submitting a claim in ATA’s Chapter 11 proceedings.
Again, more information is being provided on the ATA website, and that is where we would like for you to direct people looking for additional information

EagleStar

[Golf Charlie Charlie]

So, if I'm right, that's three US carriers this week to cease operations : Aloha, Champion and ATA. Tough times......

[Avman]

Tough times......

Yep, and likely to hit Europe soon. Even the great powerful Ryanair is starting to wobble a bit. They will survive though. Quite a few others won't.

[Jabawocky]

So with hundreds of Airbus and Boeing aircraft orders in the pipeline, where are they all going to go.....must be a lot of retired airframes off to the bone yards soon.

J:ok:

[EagleStar]

Altalia????



EagleStar

[groundhand]

It's not just the airlines.

With some of passenger throughput deals some smaller regional airports will be hoping that the loco do not pull back onto the fatter routes.
The Handling Agents work on very thin margins and sooner or later one of the top 3 or 4 will call it a day; either by a sell out to a competitor or into administration. I don't think any of the big ones (Menzies, Swissport, Servisair) have made money from ground handling over the last few years; their cargo divisions & executive services have provided the cash but when cargo tonnes drop and business passenger numbers drop they will be squeezed.

2nd half of 2008 and 2009 will be VERY challenging!
Don't bet on all the European legacy carriers still being here by the end of 2009. The big loco guys will survive, even if they bleed a bit in the interim; some of the smaller ones will go.

[Robert Campbell]

Was ATA formerly American Trans Air? If so, they've been flying
US Military contract flights for Decades. Why a sudden contract cancellation now?

[con-pilot]

Was ATA formerly American Trans Air? If so, they've been flying
US Military contract flights for Decades. Why a sudden contract cancellation now?

Good question, from what I have heard/read it was FedEx that cancelled the contract. Not the DOD.

And yes, ATA was formerly American Trans Air.

[Throat]

I dont think US MIL cancelled their contact(But they will now), Trooping flight are only a part of the operation. They do have a low cost operation which was doing badly and had already been cut back.

[Earl]

Didn't this company recently just dump a ton of money into purchases of DC-10"s and was calling back laid off pilots and flight engineers?

[OldCessna]

They were spending a fortune trying to get the DC10's operational to replace the L1011's that were running the MIL contracts.

I believe the MIL contracts were fixed price so the fuel prices were killing them at the end.

Dont see them reorganizing this time, it will be just a sell off of assets.

[airhumberside]

Airlines are part of teams for US military contracts. ATA were on the FedEx led team. FedEx kicked them off. Without this work they could not continue

[OldCessna]

This article has some interesting comments


Swift end to once-high-flying airline means loss of 560 jobs in Indy
By Ted Evanoff
Posted: April 4, 2008

A Staggered by a broken deal with cargo hauler FedEx, ATA Airlines suddenly grounded its fleet of 29 jet airplanes Thursday and closed forever, idling 560 employees in Indianapolis and ending a 35-year run as the hometown air carrier.

ATA refiled for protection from creditors, about 25 months after emerging from a painful Chapter 11 reorganization that sharply scaled down what was once the city's leading airline.


Hampered by unprofitable routes, ATA lost $75 million last year and was in talks with five potential suitors when FedEx, with apparently little explanation, decided to cut off the Indianapolis carrier's only money maker: military charters.

Today, ATA restructuring chief Steven Turoff is scheduled to ask a federal bankruptcy judge in New Albany to let ATA sell off what it owns and get out of leases on the airplanes it has flown on regular passenger routes and global military charters.

The decision to liquidate the entire 2,300-employee company, announced at 4 a.m. Thursday by ATA owner Global Aero Logistics, stranded U.S. troops and their dependents on one flight and stunned employees who had stood by ATA through the previous 16-month bankruptcy.

"It's sad it had to come to this,'' said Jacki Pritchett, an ATA flight attendant since the 1970s. "I'm just going to move to California and see what the next phase of my life brings. I don't have any desire to go to another carrier. Other airline jobs would just be a job. Bless George Mikelsons. He made this airline an adventure."

One of Indiana's few companies doing business throughout the world, ATA was the brainchild of immigrant airline pilot J. George Mikelsons, a Latvian emigre who grew wealthy expanding ATA into the nation's No. 10 passenger carrier.

Its roots were passenger charters that led the carrier, earlier known as American Trans Air, to branch out into troop charters. ATA operates a $340 million-a-year airborne bus line ferrying troops and their families to and from places where the U.S. military stations troops worldwide.

But a late-1990s expansion fouled the discount-ticket airline when fuel prices soared and battered some of the biggest names in the U.S. airline industry. Mikelsons lost control of the company, and it was purchased in 2006 out of bankruptcy by New York hedge fund Matlin Patterson.

Matlin appeared able to sustain the airline in the era of cheap interest rates that prevailed into the summer of 2007. The hedge fund created Global Aero and put ATA under the Atlanta firm, along with two other small carriers it purchased, World Airways and North American Airlines.

In August, Matlin organized a $340 million loan for ATA from JP Morgan Chase. Proceeds were used to repay Matlin loans to ATA, as well as ATA debts, including an $81.6 million federal bailout loan. That loan from the Air Transportation Stabilization Board was intended to keep ATA flying after the 2001 terrorist attacks led to a sharp cutback in travel by consumers.

Despite the August loan, ATA lost money last year on operations. On March 18, it brought in Turoff, president of Renaissance Consulting in Dallas.

ATA tried to find buyer
In an affidavit filed with the court Thursday, Turoff disclosed that ATA entered 2008 negotiating with five undisclosed potential suitors to step in and buy what appear to be parts or the entire airline. In January, those talks apparently fizzled after FedEx told ATA it was not going to be included in the next Pentagon charter contract.

FedEx manages the $1 billion troop- and cargo-hauling contract for the Pentagon's Military Airlift Command under an arrangement that rotates worldwide military flights among a specific group of lines: ATA, FedEx, Northwest Airlines and two smaller carriers, Atlas and Polar. Turoff was a director of an Atlas subsidiary from 2003 to 2006.

Exactly why FedEx canceled ATA's service was unclear Thursday. Under the contract, ATA would have flown troop charters through September. ATA was dropped from the next 12-month contract, set to begin Oct. 1.

Officials at FedEx "have not explained why they pulled the plug, not to ATA's satisfaction,'' said ATA spokesman Michael Freitag, a partner in Kekst & Co., a New York public relations company retained by ATA during the bankruptcy.

FedEx declined to comment Thursday.

"FedEx doesn't discuss the rationale or reasons for its business decisions,'' said Jim McCluskey, spokesman for the Memphis, Tenn.-based cargo carrier.

For military personnel facing travel problems as a result of ATA's shutdown, the U.S. Air Force began working Thursday to make sure tickets would be available on other airlines, said Air Force Maj. Dave Huxoll.

Pilots chide ATA owner
Just why FedEx dropped ATA puzzled many pilots. A spokesman for the Air Line Pilots Association said ATA executives in a conference call Thursday with pilots union officials ruled out reliability problems.

However, pilots chide Global's decision to retire ATA's three aging Lockheed L-1011 airliners, mainstays of the military charter business. In place of the Lockheeds, ATA leased four DC-10s that had been mothballed in the California desert by Northwest.

"We were making most of our commitments with the DC-10s, but the airplanes were troublesome and not nearly as reliable as the L-10s,'' pilots union spokesman Rusty Ayers said. "The Lockheeds were old, but pilots knew how to fly them and maintenance knew their quirks. Basically we had to go to a completely different airplane we didn't know that had been cast off from Northwest. We were expected to keep them running at peak efficiency when we were under the gun at the same time to keep up our military capability.''

ATA's military flights brought in $335 million last year and cost $327 million to operate. On regular scheduled service, the carrier produced $402 million but spent $485 million on those operations, Turoff's affidavit says.

ATA pilots intend to push for jobs as they open at Global Aero Logistics' other carriers. Meanwhile, many workers are getting ready to file for unemployment. ATA provided no severance packages, although 236 top employees will get $3,200 each if they remain with ATA another month.

Deborah Robb's last duties as a crew positioner were to help stranded flight attendants in Europe find a way home. The experience taught the single mother of two one clear lesson:

"I'm not going to get back into aviation, that's for sure."

[CentreFix25]

Despite some stiff competition, probably my most favourite livery...

http://www.airliners.net/aviation-photos/small/1/2/9/0175921.jpg

[Wellington Bomber]

So what happens with North American and World Airways as they are part of the same stable Global Logistics.

I bet there are a few worried pilots out in the good ol US of A

[tallseabird]

Please explain 'the same stable'

[Wellington Bomber]

Same stable = Same ownership

Even though they have different AOC's

[smith]

I thought one of the rules of the air in the Chicago Convention was that civil aircraft must not be used in acts of war. Is carrying fully combat ready troops into active war zones not considered an act of war?