ATA ceases operations eff. 04/03/2008
Apr 3, 2008, 3:09 am
#1
Original Poster
Join Date: Jul 2001
Location: Austin, TX USA
Posts: 1,063
ATA ceases operations eff. 04/03/2008
http://www.ata.com/about_ata/news/20080403.pdf
ATA AIRLINES FILES FOR CHAPTER 11 AND DISCONTINUES OPERATIONS FOLLOWING CANCELLATION OF KEY MILITARY CHARTER AGREEMENT
Travelers Should Seek Alternative Flight Arrangements;
Ticket Refunds May Be Available From Credit Card Providers
INDIANAPOLIS, April 3, 2008 – ATA Airlines, Inc. today announced that it has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. The petition was filed on April 2 in the U.S. Bankruptcy Court for the Southern District of Indiana, in the Indianapolis division. Subsequent to the Chapter 11 filing, ATA discontinued all
operations, effective as of 4 am ET on April 3. 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 additional capital to sustain its operations or restructure the business.
With the shutdown of all operations and cancellation of all ATA flights, ATA is no longer able to honor any reservations or tickets. ATA customers should seek alternative
arrangements for current and future travel. To that end, ATA has contacted the airlines that serve ATA destinations and asked them to provide assistance to ATA customers. A
list of other airlines that serve ATA destinations and additional information for ATA customers is available at www.ata.com. Customer information has also been posted at all ATA ticket counters and is available at (800) 435-9282. Customers should visit ata.com for updates as additional information becomes available.
Customers who purchased tickets from ATA using a credit card should contact their credit card provider directly for more information about how to obtain a refund for unused
tickets. Customers who purchased tickets from Southwest Airlines for flights operated by ATA through its codeshare agreement should contact Southwest at (800) 308-5037 for more information. ATA’s frequent flier program and all accumulated frequent flier points will be canceled. ATA has advised its commercial and military charter customers that
they should make alternative arrangements for future travel needs.
Doug Yakola, chief operating officer of ATA, said: “We deeply regret the disruption and hardship caused by the sudden shutdown of ATA, an outcome we and our employees had worked very hard and made many sacrifices to avoid. Unfortunately, the cancellation of a critical agreement for our military charter business undermined ATA’s plan to address the current conditions facing all scheduled service airlines, including the tremendous spike in the price of jet fuel in recent months. As a result, it became impossible for ATA to continue operating.”
NEWS RELEASE
2
Despite its financial challenges, ATA continued to seek solutions for its scheduled service business and create value from its longstanding presence in the Hawaii market
and its planned international expansion. But these efforts suffered a major blow recently when ATA received abrupt and unexpected notification from FedEx Corporation that
ATA would no longer be a member of the FedEx Teaming Arrangement. This arrangement gave ATA a significant share of the airlift contracts under the International
Program of the Department of Defense Air Mobility Command, which facilitates transportation for military personnel and their families to and from overseas destinations. This arrangement accounted for most of ATA’s charter business.
Even though ATA had been a member of the FedEx team for nearly two decades, FedEx informed ATA that it would be denied membership on the FedEx Team for the
government’s 2009 fiscal year – a period that begins in October 2008 and runs through September 2009. This termination is a full year earlier than the term specified in a letter of agreement between FedEx and ATA.
ATA has engaged in extensive discussions with numerous parties in an effort to obtain capital, identify other opportunities that would allow it to continue operating, or sell the business as a going concern. However, despite its best efforts, ATA could not continue operations or consummate a sale. Accordingly, an immediate shutdown was necessary.
ATA’s scheduled service business had been severely impacted by the dramatic and unprecedented increase in the price of jet fuel in recent months. On March 6, in an effort to reduce costs, ATA announced that it would discontinue its low-fare domestic scheduled service at Chicago’s Midway Airport, effective April 14, 2008. International service from Midway was expected to end on June 7, 2008. All such service has been discontinued immediately, in addition to all of ATA’s other scheduled flights, which operated between the West Coast and Hawaii.
Steven S. Turoff has been named Chief Restructuring Officer of ATA, with responsibility for overseeing the company’s Chapter 11 case. Mr. Turoff is president of The
Renaissance Consulting Group, Inc., a turnaround management firm based in Dallas, Texas. ATA’s lead bankruptcy counsel in its Chapter 11 proceedings is Haynes and Boone, LLP.
Founded in 1973 and based in Indianapolis, ATA Airlines, Inc. is a subsidiary of Global Aero Logistics Inc. Global Aero and its other subsidiaries are not part of ATA’s Chapter
11 proceedings and are conducting business as usual.
At the time of the shutdown, ATA had approximately 2,230 employees, virtually all of whom are being notified today that their positions have been eliminated. ATA has filed
motions with the Bankruptcy Court seeking authorization to provide COBRA medical insurance coverage to these employees. ATA was serving approximately 10,000
passengers per day at the time of its shutdown. The company operated 29 aircraft, many of which are leased.
Additional information about ATA’s shutdown and Chapter 11 proceedings is available on the internet at www.ata.com. Court filings and claims information will be available at www.bmcgroup.com/ataairlines.
Wow. Aloha, Champion, now ATA. A bad week for the airline industry to be sure.
Good luck to ATA's employees.
ATA AIRLINES FILES FOR CHAPTER 11 AND DISCONTINUES OPERATIONS FOLLOWING CANCELLATION OF KEY MILITARY CHARTER AGREEMENT
Travelers Should Seek Alternative Flight Arrangements;
Ticket Refunds May Be Available From Credit Card Providers
INDIANAPOLIS, April 3, 2008 – ATA Airlines, Inc. today announced that it has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. The petition was filed on April 2 in the U.S. Bankruptcy Court for the Southern District of Indiana, in the Indianapolis division. Subsequent to the Chapter 11 filing, ATA discontinued all
operations, effective as of 4 am ET on April 3. 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 additional capital to sustain its operations or restructure the business.
With the shutdown of all operations and cancellation of all ATA flights, ATA is no longer able to honor any reservations or tickets. ATA customers should seek alternative
arrangements for current and future travel. To that end, ATA has contacted the airlines that serve ATA destinations and asked them to provide assistance to ATA customers. A
list of other airlines that serve ATA destinations and additional information for ATA customers is available at www.ata.com. Customer information has also been posted at all ATA ticket counters and is available at (800) 435-9282. Customers should visit ata.com for updates as additional information becomes available.
Customers who purchased tickets from ATA using a credit card should contact their credit card provider directly for more information about how to obtain a refund for unused
tickets. Customers who purchased tickets from Southwest Airlines for flights operated by ATA through its codeshare agreement should contact Southwest at (800) 308-5037 for more information. ATA’s frequent flier program and all accumulated frequent flier points will be canceled. ATA has advised its commercial and military charter customers that
they should make alternative arrangements for future travel needs.
Doug Yakola, chief operating officer of ATA, said: “We deeply regret the disruption and hardship caused by the sudden shutdown of ATA, an outcome we and our employees had worked very hard and made many sacrifices to avoid. Unfortunately, the cancellation of a critical agreement for our military charter business undermined ATA’s plan to address the current conditions facing all scheduled service airlines, including the tremendous spike in the price of jet fuel in recent months. As a result, it became impossible for ATA to continue operating.”
NEWS RELEASE
2
Despite its financial challenges, ATA continued to seek solutions for its scheduled service business and create value from its longstanding presence in the Hawaii market
and its planned international expansion. But these efforts suffered a major blow recently when ATA received abrupt and unexpected notification from FedEx Corporation that
ATA would no longer be a member of the FedEx Teaming Arrangement. This arrangement gave ATA a significant share of the airlift contracts under the International
Program of the Department of Defense Air Mobility Command, which facilitates transportation for military personnel and their families to and from overseas destinations. This arrangement accounted for most of ATA’s charter business.
Even though ATA had been a member of the FedEx team for nearly two decades, FedEx informed ATA that it would be denied membership on the FedEx Team for the
government’s 2009 fiscal year – a period that begins in October 2008 and runs through September 2009. This termination is a full year earlier than the term specified in a letter of agreement between FedEx and ATA.
ATA has engaged in extensive discussions with numerous parties in an effort to obtain capital, identify other opportunities that would allow it to continue operating, or sell the business as a going concern. However, despite its best efforts, ATA could not continue operations or consummate a sale. Accordingly, an immediate shutdown was necessary.
ATA’s scheduled service business had been severely impacted by the dramatic and unprecedented increase in the price of jet fuel in recent months. On March 6, in an effort to reduce costs, ATA announced that it would discontinue its low-fare domestic scheduled service at Chicago’s Midway Airport, effective April 14, 2008. International service from Midway was expected to end on June 7, 2008. All such service has been discontinued immediately, in addition to all of ATA’s other scheduled flights, which operated between the West Coast and Hawaii.
Steven S. Turoff has been named Chief Restructuring Officer of ATA, with responsibility for overseeing the company’s Chapter 11 case. Mr. Turoff is president of The
Renaissance Consulting Group, Inc., a turnaround management firm based in Dallas, Texas. ATA’s lead bankruptcy counsel in its Chapter 11 proceedings is Haynes and Boone, LLP.
Founded in 1973 and based in Indianapolis, ATA Airlines, Inc. is a subsidiary of Global Aero Logistics Inc. Global Aero and its other subsidiaries are not part of ATA’s Chapter
11 proceedings and are conducting business as usual.
At the time of the shutdown, ATA had approximately 2,230 employees, virtually all of whom are being notified today that their positions have been eliminated. ATA has filed
motions with the Bankruptcy Court seeking authorization to provide COBRA medical insurance coverage to these employees. ATA was serving approximately 10,000
passengers per day at the time of its shutdown. The company operated 29 aircraft, many of which are leased.
Additional information about ATA’s shutdown and Chapter 11 proceedings is available on the internet at www.ata.com. Court filings and claims information will be available at www.bmcgroup.com/ataairlines.
Wow. Aloha, Champion, now ATA. A bad week for the airline industry to be sure.
Good luck to ATA's employees.
Apr 3, 2008, 5:15 am
#3
Join Date: Oct 2005
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The effect on WN will be very interesting.
Apr 3, 2008, 5:49 am
#4
In Memoriam - Company Representative - Southwest Airlines
Join Date: Jan 2007
Location: Dallas, TX
Programs: Southwest spokesperson
Posts: 1,201
Southwest Press Release
As you might imagine, our folks have been working through the night on this unfortunate turn of events. Our press release outlines our reaccommodation efforts, including a special toll-free hotline.
Brian
Brian
Apr 3, 2008, 6:02 am
#5
Join Date: Jun 2001
Location: SAT, AUS, HNL
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Posts: 250
As you might imagine, our folks have been working through the night on this unfortunate turn of events. Our press release outlines our reaccommodation efforts, including a special toll-free hotline.
Brian
Brian
because it was purchased on the ATA website.
Apr 3, 2008, 6:08 am
#6
Join Date: Aug 2007
Location: SAN
Programs: AA PP, SPG Plat, Hyatt Diamond, Nat ExecElite, WN CP
Posts: 419
I've never been so happy in my life to be flying US 
I was about 1 click away from booking ATA PHX-HNL for mid-April and decided to just book the US flight and earn some miles...I imagine my US flight is going to be a bit more crowded now
I was about 1 click away from booking ATA PHX-HNL for mid-April and decided to just book the US flight and earn some miles...I imagine my US flight is going to be a bit more crowded now
Apr 3, 2008, 6:10 am
#7
In Memoriam - Company Representative - Southwest Airlines
Join Date: Jan 2007
Location: Dallas, TX
Programs: Southwest spokesperson
Posts: 1,201
I don't have the answer "bobemac" but I would suggest that either you or him contact the hotline number in the press release that I mentioned above, if you haven't done so.
Apr 3, 2008, 6:22 am
#9
Join Date: Jun 2001
Location: SAT, AUS, HNL
Programs: NW Plat, DL 2 MM Flying Colonel, AA EXP MM, CO,NW,UA, MM, Hilton, Hyatt Diamond, QF Club Lifetime
Posts: 250
with your "hotline", and they would not honor the ATA ticket!
Even worse, they were demanding $500 to fly from Love to MDW.
The typical fare is $200 for this flight RT.
Fortunately, a nice SW TA sold him a ticket at Love Field that was fair.
If you want relief, stay away from the special SWA/ATA hotline !
Apr 3, 2008, 6:52 am
#10
FlyerTalk Evangelist
Join Date: Mar 2000
Posts: 17,405
Whew -- had WN and ATA allowed use of the companion pass on Hawaiian flights, I most certainly would have been impacted by this (the fact that you couldn't use the CP made award travel to Hawaii on WN less attractive to me).
I thought there were some rumors that WN might "pick up" these flights from ATA, but that always seemed doubtful. Please correct me if I'm wrong, but I don't think WN has any ETOPs-qualified aircraft. And the high price of fuel makes long-haul leisure markets less attractive.
It will be interesting to see if US adds any service as a result of this development. I had heard their new Hawaiian routes from PHX were profitable, but I don't know if that's still true with $100 oil.
I thought there were some rumors that WN might "pick up" these flights from ATA, but that always seemed doubtful. Please correct me if I'm wrong, but I don't think WN has any ETOPs-qualified aircraft. And the high price of fuel makes long-haul leisure markets less attractive.
It will be interesting to see if US adds any service as a result of this development. I had heard their new Hawaiian routes from PHX were profitable, but I don't know if that's still true with $100 oil.
Apr 3, 2008, 7:02 am
#11
Join Date: Jun 2004
Location: DFW
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Posts: 4,891
Question:
Why would filing for Chapter 11 result in an immediate cease of operations? I thought Ch 11 usually meant that the airline would continue to fly, whereas Chapter 7 would result in immediate liquidation?
Why would filing for Chapter 11 result in an immediate cease of operations? I thought Ch 11 usually meant that the airline would continue to fly, whereas Chapter 7 would result in immediate liquidation?
Apr 3, 2008, 7:06 am
#13
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Posts: 6,459
They have voluntarily chosen to discontinue operations. Chapter 11 over chapter 7 leaves open the door that someone will come in and bail them out.
Apr 3, 2008, 7:12 am
#14
In Memoriam - Company Representative - Southwest Airlines
Join Date: Jan 2007
Location: Dallas, TX
Programs: Southwest spokesperson
Posts: 1,201
"SWABrian", FYI you need to be aware that my son was on the line
with your "hotline", and they would not honor the ATA ticket!
Even worse, they were demanding $500 to fly from Love to MDW.
The typical fare is $200 for this flight RT.
Fortunately, a nice SW TA sold him a ticket at Love Field that was fair.
If you want relief, stay away from the special SWA/ATA hotline !
with your "hotline", and they would not honor the ATA ticket!
Even worse, they were demanding $500 to fly from Love to MDW.
The typical fare is $200 for this flight RT.
Fortunately, a nice SW TA sold him a ticket at Love Field that was fair.
If you want relief, stay away from the special SWA/ATA hotline !
I am sorry for your frustration. The ATA bankruptcy/ceasing operations caught us by surprise too, and we are spending thousands of dollars to purchase tickets on other airlines to honor our committment to those who purchased their tickets through us. I checked ATA's web site, and the problem is that your son's ticket was purchased through ATA. It now becomes part of the bankruptcy proceedings, unless it was bought with a credit card, and then you should work through the credit card company. The difference is that ,with folks who purchased with us, we have those funds, at least, even though we will be spending additional money on more expensive new tickets. With those who purchase through ATA, we have no way of accessing those funds from ATA.
I hope you understand.
Brian
Apr 3, 2008, 7:42 am
#15
Join Date: Aug 2004
Location: Kansas City, USA
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Posts: 2,066
Bobemac,
I am sorry for your frustration. The ATA bankruptcy/ceasing operations caught us by surprise too, and we are spending thousands of dollars to purchase tickets on other airlines to honor our committment to those who purchased their tickets through us. I checked ATA's web site, and the problem is that your son's ticket was purchased through ATA. It now becomes part of the bankruptcy proceedings, unless it was bought with a credit card, and then you should work through the credit card company. The difference is that ,with folks who purchased with us, we have those funds, at least, even though we will be spending additional money on more expensive new tickets. With those who purchase through ATA, we have no way of accessing those funds from ATA.
I hope you understand.
Brian
I am sorry for your frustration. The ATA bankruptcy/ceasing operations caught us by surprise too, and we are spending thousands of dollars to purchase tickets on other airlines to honor our committment to those who purchased their tickets through us. I checked ATA's web site, and the problem is that your son's ticket was purchased through ATA. It now becomes part of the bankruptcy proceedings, unless it was bought with a credit card, and then you should work through the credit card company. The difference is that ,with folks who purchased with us, we have those funds, at least, even though we will be spending additional money on more expensive new tickets. With those who purchase through ATA, we have no way of accessing those funds from ATA.
I hope you understand.
Brian