ATA files for Chapter 11

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

ATA Airlines, based in Indianapolis, filed for Chapter 11 bankruptcy protections after losing a key military contract.

From 04:00 today the airline discontinued all operations. The bankruptcy petition was filed on 2 April in the US Bankruptcy Court for the Southern District of Indiana.

The airline is a subsidiary of Global Aero Logistics whose carriers also include World Airways and North American Airlines.

ATA says a primary factor leading to the filing 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”.

The move follows in the footsteps fo Aloha Airgroup, which filed for Chapter 11 on 20 March after emerging from bankruptcy protection just two years earlier. Both bankruptcy filings include fleets of Boeing 737 Next Generation aircraft.

ATA operated 29 aircraft at the time of the filing, many of which are leased. According to Flight’s ACAS database, the airline has a total fleet of 33 aircraft. All 12 of the Boeing 737-800s are leased from ILFC. The remaining fleet of Boeing 757s and McDonnell Douglas DC10s are owned or leased by a variety of financiers. The airline also operated several older Lockheed L-1011s, which it owned. (See table below).

Aloha's fleet includes eight Boeing 737-700s on lease from AWAS, GECAS, Genesis Lease and ILFC. The fleet also comprises Boeing 737s Classics on lease from a variety of lessors including Triton Aviation Services, Aircorp, Compass Capital, KP Aviation Ajet, BCI Aircraft and Bizjet. The airline also operates several 737-700s, .

ATA says it 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” but an “immediate shutdown was necessary”.

Doug Yakola, chief operating officer of ATA, says: “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.”

Early termination

The airline says it suffered a “major blow” when FedEx notified the airline that it 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 accounts for most of ATA’s charter business.

FedEx informed ATA that it would be denied membership on the FedEx team for the
2009 fiscal year – a period that begins in October 2008 and runs through September 2009.

ATA says this termination is a full year earlier than the term specified in a letter of agreement between FedEx and the airline. 

Steven Turoff has been named chief restructuring officer of ATA, with responsibility for overseeing the company’s Chapter 11 case. Turoff is president of The Renaissance Consulting Group, a turnaround management firm based in Dallas.

ATA Fleet

operator model msn parked owner
ATA AIRLINES 737-800 28239 ILFC
ATA AIRLINES 737-800 28243 ILFC
ATA AIRLINES 737-800 28244 ILFC
ATA AIRLINES 737-800 28245 ILFC
ATA AIRLINES 737-800 28246 ILFC
ATA AIRLINES 737-800 28247 ILFC
ATA AIRLINES 737-800 28249 ILFC
ATA AIRLINES 737-800 30033 ILFC
ATA AIRLINES 737-800 30640 ILFC
ATA AIRLINES 737-800 30643 ILFC
ATA AIRLINES 737-800 30675 ILFC
ATA AIRLINES 737-800 30706 ILFC
ATA AIRLINES 757-200 27971 JP MORGAN CHASE
ATA AIRLINES 757-200 27973 FINOVA CAPITAL
ATA AIRLINES 757-200 27974 JET-I HOLDINGS
ATA AIRLINES 757-200 27975 WILMINGTON TRUST
ATA AIRLINES 757-200 27976 WILMINGTON TRUST
ATA AIRLINES 757-200EM 29330 WILMINGTON TRUST
ATA AIRLINES 757-300 32584 BOEING CAPITAL
ATA AIRLINES 757-300 32586 BOEING CAPITAL
ATA AIRLINES 757-300 33525 BOEING CAPITAL
ATA AIRLINES 757-300 33526 BOEING CAPITAL
ATA AIRLINES DC10-30 46580 VX CAPITAL PARTNERS
ATA AIRLINES DC10-30 46581 * VX CAPITAL PARTNERS
ATA AIRLINES DC10-30 46582 VX CAPITAL PARTNERS
ATA AIRLINES DC10-30 46583 VX CAPITAL PARTNERS
ATA AIRLINES DC10-30 46912 VX CAPITAL PARTNERS
ATA AIRLINES DC10-30 46915 VX CAPITAL PARTNERS
ATA AIRLINES DC10-30 47844 * VX CAPITAL PARTNERS
ATA AIRLINES L1011-500 1219 * ATA AIRLINES
ATA AIRLINES L1011-500 1220 ATA AIRLINES
ATA AIRLINES L1011-500 1229 ATA AIRLINES
ATA AIRLINES L1011-500 1238 ATA AIRLINES
source: ACAS