ATA Bankruptcy Ripples Through Industry, Economy

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When ATA Airlines filed for bankruptcy, Thursday, it immediately and without warning halted all flights; after 35 years in operation, the airline Thursday left its passengers stranded and nearly all of its 2,200 employees are now unemployed. The sudden stoppage was explained by ATA in a statement that said FedEx had cancelled a charter agreement with the airline, leaving ATA unable to offset fuel prices. World Airways and North American Airlines, two airlines acquired by ATA's parent group, ATA Acquisition Inc., are not in bankruptcy, according to court documents. While ATA warned other airlines of its impending shutdown, asking them to help its soon to be stranded passengers. Northwest Airlines said it will honor ATA tickets for flights to and from Hawaii and Cancun through May 3 for a fee of $100 per leg. Southwest will honor any tickets issued to is own customers, or provide those customers with refunds. For those passengers that arrived at ATA check-in points to empty counters said they received no notice of their flight's cancellation. They are encouraged to seek financial return from their credit card companies (if that's how they purchased their tickets). ATA frequent fliers currently can expect their accrued mileage to be worthless. Employees say they got phone calls, some at 3 a.m. letting them know their services were no longer required.

Some may have anticipated this day was coming, but an announcement last month from the airline stated that ATA would close its hub at Midway, ceasing domestic flights there on April 14 with a stop to international flights falling on June 7. ATA follows Aloha Airgroup Inc. into Bankruptcy. Aloha ceased operations on March 31.