ATA Airlines files for bankruptcy; cancels all flights

03 04 2008

ATA Airlines files for bankruptcy; cancels all flights

Posted by: in Companies Competitive Strategy

Filed under: Other issues, Bad news, Press releases, Products and services, Management, Industry, Consumer experience, Competitive strategy, Employees, Southwest Airlines (LUV)

Two years after coming out of bankruptcy, ATA airlines has once again been forced to file for chapter 11. The airline canceled all flights, and has advised travelers to begin to look for alternative travel arrangements.

The airline operated roughly 50 flights a day, and had more than 2,200 employees working. On its website, ATA has issued a formal statement and blamed the final straw for its collapse on the loss of a key military contract. In 2006, the company had won a $335 million dollar contract from the U.S. Air Force for international airlift services.

In its statement, ATA has advised passengers to contact their credit card company, or travel agent to discuss the options to get refunded for their unused tickets.

When looking to rebook your travel plans, you can use this website that lists substitute airlines that fly to the destinations that ATA had been servicing. On the site you can find airline information, website addresses as well as phone numbers for reservation desks.

If you’ve ATA tickets that you purchased through Southwest Airlines (NYSE: LUV), then you need to contact Southwest directly at the following number: (800) 308-5037.

For the 2,200 employees of the company — they’ll be receiving official notices this day that their jobs have been eliminated. While it is never a good feeling, hopefully it will not be too much of a shock for the company’s workers. The writing has definitely been on the wall.

Last month the company announced that it would no longer be using Chicago’s Midway Airport (where it has had a hub since 1992), and then just two weeks ago the chief executive of ATA’s parent company resigned under pressure regarding ATA’s profitability.

I am sorry to see the company shut down, and only hope that the challenging environment that airliners are currently facing will not lead to more repeat stories like this one.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor’s Observer.