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Late Tuesday, ATA Holdings, the parent company of ATA Airlines, the nation's 10th largest carrier, filed for Chapter 11 bankruptcy protection. The Indianapolis-based airline now joins US Airways, United Airlines, and Hawaiian Airlines in bankruptcy protection. ATA, which competed with other low-fare carriers like Southwest Airlines from its Chicago hub, was the latest victim of rising oil prices and the poor economics that continue to plague the airline industry.
"Excess capacity, extremely high fuel prices which continue to escalate, and declining fares have necessitated that all airlines, including ATA, re-examine their business," said ATA Holdings' Chairman and CEO George Mikelsons.
While the low-fare carrier had been struggling for some time, most airline observers thought that Delta Airlines would be the one to file for bankruptcy this week. But so far, that hasn't happened. The Atlanta-based carrier has bought some time with its creditors, it announced yesterday, while it is still seeking concessions from its pilots' union.
There is still the chance that Delta will also file for bankruptcy should these discussions break down without agreement. And even if the company gets more time and concessions, it's not out of the woods yet, particularly if fuel costs remain high.
As for ATA, the company announced that it will sell gates in key cities such as Chicago and New York to rival AirTran, another low-cost carrier. But ATA vowed to continue operations during its reorganization. "ATA will continue to provide value-based, everyday low fares and service that makes the travel experience easier and more affordable for all our business and leisure travelers," said Mikelsons. In the meantime, another rival, America West, is said to be interested in buying ATA.
