ATA nets $2.5 million from asset sale

Washington DC
Source:
This story is sourced from Pro
See more Pro news »

Canadian parts supplier Flight Support received bankruptcy court approval to buy two of five Lockheed L-1011 aircraft and other assets from defunct ATA Airlines for $2.5 million.

The transaction also includes four Rolls Royce RB211-524 spare engines, three auxiliary power units and platforms and related spare parts and tooling, a bankruptcy court filing says.

Flight Support was the only bidder for the assets, and has supplied a $2 million deposit for the equipment.

The company has already started receiving spare parts and will need to see the aircraft to determine what parts to take, Flight Support president Tony Martin tells ATI, adding that the company is considering the purchase of three remaining L-1011s from ATA.

While the Flight Support transaction has been approved, the bankruptcy court has not cleared the sale of ATA's operating certificate or available slots at New York LaGuardia airport.

The carrier had negotiated a $3.8 million stock transaction with American Aviation Investments that would have included the operating certificate, slots and other assets, but the US Department of Justice voiced opposition. As a result, ATA must propose an alternative sale process.

Citing the loss of a US Air Force contract, ATA entered Chapter 11 bankruptcy protection in April.

The Global Aero Logistics subsidiary's passenger route network included services from the western USA to Hawaii and connections from Chicago Midway airport to Dallas, Oakland, California and Mexican destinations Guadalajara and Cancun.

It operated a mixed fleet of 29 aircraft including a dozen Boeing 737-800s leased from ILFC, plus 10 Boeing 757-200s and -300s from various lessors including Boeing Capital and Wilmington Trust.

The airline also operated five long-haul tri-jets - older Lockheed L-1011s, which it owned, and McDonnell Douglas DC-10s leased from Vx Capital Partners.