ATA shuttered; passengers stranded

INDIANAPOLIS - ATA Airlines Inc. shut down operations and stranded thousands of travelers yesterday as an unexpected loss of key charter flights and soaring fuel costs forced the carrier into bankruptcy.

Once the nation's 10th-largest air carrier, ATA entered bankruptcy for the second time in slightly more than three years. The company had more than 2,200 employees, and "virtually all" were told that their jobs were gone, company spokesman Michael Freitag said.

Many passengers learned of the collapse at ticket counters, where advisories were posted in the handful of cities ATA still served. About 10,000 passengers had flown with ATA each day, according to the airline.

"It ruins my vacation," said Beatrice Martinez, who was trying to reach Guadalajara, Mexico, from Midway International Airport in Chicago. "I'm in shock. So I guess I'll try to make other arrangements. Right now, I just need to get to Mexico."

Philadelphia International Airport was unaffected by the bankruptcy, except for passengers who were to fly out of Philadelphia on Southwest Airlines and then pick up connecting flights on ATA.

Southwest Airlines Co. and ATA have had a code-sharing service and marketing agreement since 2005. It lets passengers fly on tickets issued by Southwest between Philadelphia; Chicago; Phoenix; Oakland, Calif.; and other cities also served by ATA, where they transfer to ATA flights.

ATA stopped flying its own planes between Philadelphia and Chicago in early 2005.

Southwest said it would find other flights or issue refunds to passengers who were booked through the code-sharing deal.

Airlines are struggling with rising fuel prices, labor strife, depressed ticket demand, and heightened competition, said George Godlin, an analyst for Moody's Investors Service.

The ATA bankruptcy caused little stir. It was the second carrier to declare bankruptcy in two weeks. Aloha Airgroup Inc. filed for Chapter 11 bankruptcy protection last month, a little more than two years after emerging from bankruptcy.

"We are seeing some of the very marginal carriers shut down . . . and will probably see more," said Ray Neidl, an analyst at Calyon Securities Inc., of New York.

Analysts say they do not think larger carriers are in imminent danger of bankruptcy. But many industry observers have long warned that sustained high fuel prices and a slowing economy could push larger airlines to the brink.

Founded:

1973.

Base:

Indianapolis.

Employees:

2,230.

Fleet:

29 aircraft, mostly leased.

Passengers:

About 10,000 per day.

Locations served:

Chicago; Dallas; Los Angeles; Oakland, Calif.; Phoenix; Las Vegas; Honolulu; and Mexico.

From Philadelphia:

Via Southwest Airlines Co., through code-sharing.

SOURCES: Associated Press, Inquirer research.