NEW: Indy-based ATA files for bankruptcy, discontinues

Tribune-Star ^ | April 3,2008 | By Chris Havlik

[Military family member]

INDIANAPOLIS — ATA Airlines canceled all flights Thursday after filing for bankruptcy as it posted advisories at ticket counters in the handful of cities it still served and sought help for stranded travelers.

The Indianapolis-based airline, once the nation's 10th-largest, entered bankruptcy for the second time in just over three years Wednesday, this time citing the loss of a key military charter business.

The airline had approximately 50 flights per day, mostly between Hawaii and four west coast cities — Oakland, Los Angeles, Phoenix and Las Vegas, said company spokesman Michael Freitag.

ATA said has been in contact with other airlines that may be able to assist with travelers holding tickets that the airline can no longer honor.

On its Web site, the airline apologized for the disruption and suggested that customers seek alternative travel arrangements.

The company had over 2,200 employees, Freitag said.

"Virtually all of ATA's employees are being notified today that their positions are eliminated," Freitag said.

The carrier retrenched in 2006 after emerging from bankruptcy, focusing on destinations in the Southwest and an increase in military charter business. But like other airlines, it has struggled in a foundering economy and has been unable to offset soaring fuel prices.

Fuel is one of the industry's top costs and has pushed some carriers into merger talks.

Major airlines, to offset record fuel prices, have slashed amenities that were once free and added fees for second bags, traveling with pets and booking tickets by phone.

United Airlines said new luggage fees it has imposed on travelers will generate more than $100 million annually.

ATA came out of bankruptcy with several other carriers two years ago, and it became the second to declare bankruptcy in just the past two weeks, both with operations in Hawaii. Aloha Airlines filed for Chapter 11 bankruptcy protection last month, a little more than two years after emerging from bankruptcy.

ATA announced last month that it would leave Chicago's Midway Airport, which it had used as a hub since 1992.

The chief executive officer at ATA's parent company resigned two weeks ago. Subodh Karnik, who had been CEO at ATA, stepped down after heavy pressure from a major investment firm to turn the airline around.

[jaydubya2]

Yep, cash tolls went up April 1st.

[EEDUDE]

“I’m still waiting for your reasoning behind revoking it, other than you simply don’t like it.”

I’ll give you a reason!

All this time changing business REALLY upsets the livestock. Every time it happens, mine go off their feed. ;)

[Military family member]

No, Mitch did not force it upon us.

I suggest you check your history on the subject.

[mysterio]

He was the advocate, it was his plan, he pushed it, and he takes the fallout. He may not have written the bill, but he did the work to push it through.

It's Mitch's DST. He can win or lose on that record.

[mysterio]

Commentary from a blogger in 2005.

[Paleo Conservative]

Assuming people don’t tell them where to stick their luggage fee and fly on another airline instead.

Other airlines are thinking about doing the same thing. Oil at $100 per bbl is driving this.

[AFreeBird]

Indy is also building a new terminal, which is now more than 1/2 done. What will this do to that project?

Nothing. ATA stopped commercial passenger service here when they went into bankruptcy in 03. They still ran their charter service (Ambassidair) out of here until they sold that off. Which BTW: was their original business before trying to be an airline.

The new IND midfield terminal has been in the works for some time with long term expansion in mind.

[Military family member]

I drive the airport several times a week, but wasn’t sure what was all involved.

[AFreeBird]

Yea, the old terminal dates back to the days when the airport was called "Weir Cook". My first ever plane trip was on a "Connie" out of there. I was three I think. Don't remember it, but I've seen the pictures. You actually walked out to the plane and climbed stairs. Family could walk right up to the gate, an actual gate in a chain link fence, and see you off. Prolly had all sorts of items on their person that would be a no no today.

[kaktuskid]

Southwest owns a stake in ATA. Prediction, SWA picks up the Hawaii routes and the ATA planes

[Military family member]

This is the second major financial disaster at the Indy airport revolving around the airlines. The first was the massive United maintenance terminal that was financed by the Indiana taxpayers, then abandoned by United a few years later.