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US carrier ATA ceases operations after losing military contract

US carrier ATA Airlines has filed for Chapter 11 bankruptcy protection and discontinued operations after the sudden cancellation of a crucial military charter contract.

ATA Airlines, based in Indianapolis, is a subsidiary of Global Aero Logistics whose carriers also include World Airways and North American Airlines.

It halted all services from 04:00 on 3 April. The airline says: “A primary factor leading to these actions 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.”

Chief operating officer Doug Yakola says: “We deeply regret the disruption and hardship caused by the sudden shutdown of ATA, an outcome we and our employees had worked very hard and made many sacrifices to avoid.”

ATA has been a long-term provider of troop transport for the US Air Force. Yakola says the loss of the contract “undermined” the carrier’s plans for fending off the effects of fuel price rises.

The carrier’s passenger route network included services from the western USA to Hawaii and connections from Chicago Midway to Dallas, Oakland, Guadalajara and Cancun.

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

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

ATA Airlines, which was founded in 1973, had previously filed for Chapter 11 protection in 2004 and restructured before emerging again in 2006. It employs around 2,200 personnel including 600 pilots and 800 flight attendants.

Source: Air Transport Intelligence news

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