ATA Airlines Discontinues All Flights, Files for Bankruptcy

INDIANAPOLIS – ATA Airlines discontinued all flights Thursday after filing for bankruptcy.

The carrier sought help from other airlines to help potentially stranded passengers and posted advisories at ATA ticket counters in the handful of cities it still served.

The Indianapolis-based airline said in a statement on its Web site that it became impossible to continue operations after losing a key contract for its military charter business.

Prior to petitioning the U.S. Bankruptcy Court for the Southern District of Indiana on Wednesday, 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.

In the message, 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.

ATA was awarded a contract worth up to about $355 million from the U.S. Air Force for international airlift services in 2006, but has struggled along with other carriers amid a floundering economy and high fuel prices.

Just two weeks ago, the chief executive officer at ATA's parent company resigned under pressure.

The carrier was brought out of bankruptcy in 2006 by MatlinPatterson, which had pushed former ATA CEO Subodh Karnik to make the carrier profitable.

ATA emerged from federal bankruptcy protection in 2006 and is now a subsidiary of Global Aero Logistics Inc.

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