ATA Airlines files for bankruptcy

Indianapolis-based airline says it can't maintain its business without a key military charter contract.

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ATA apologized for its "sudden shutdown" after the low-cost carrier filed for bankruptcy.
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CHICAGO, Illinois (CNN) -- ATA Airlines has ceased all flights as it files for bankruptcy, apologizing to its customers for the airline's "sudden shutdown," according to a company statement released Thursday.

The low-cost, charter airline based in Indianapolis, Indiana, filed for Chapter 11 status on Wednesday as a result of financial problems "following the loss of a key contract for our military charter business," ATA said.

ATA spokesman Michael Freitag estimated the airline had 50 flights a day, serving about 10,000 people daily.

"The decision to shut down was just totally unexpected and happened very quickly," he said.

Freitag said ATA will set up signs at airports alerting travelers of the shutdown, and will also update the airline's Web site with current information. He suggested that customers with existing reservations make arrangements with other carriers for travel.

Southwest Airlines (LUV, Fortune 500), which often worked in conjunction with ATA, has a plan to reschedule travelers who booked tickets through Southwest on ATA flights. A spokeswoman for the airline estimates as many as 30,000 people currently have ATA service booked through Southwest.

"We are sad to end our codeshare relationship with ATA but understand it's extremely difficult for an airline to flourish in today's arduous financial environment that has been plagued by soaring fuel prices," said a statement on Southwest's Web site.

ATA, founded in 1973, served major business centers - including Chicago, Dallas and Oakland - and popular vacation spots throughout the United States, including Hawaii, Los Angeles, California; Phoenix, Arizona; and Las Vegas, Nevada. The airline also operated as a leading carrier for the U.S. military.

It operated 29 aircraft, including Boeing 737-800s, Boeing 757-200s, Boeing 757-300s, DC10s and Lockheed L-1011s.

At the time of its shutdown, ATA employed approximately 2,230 people, including about 600 pilots, more than 800 flight attendants, and more than 100 mechanics. To top of page

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