Low-fare carrier ATA Airlines said Thursday it had filed for bankruptcy-court protection, grounding all flights and stranding thousands...
LOS ANGELES — Low-fare carrier ATA Airlines said Thursday it had filed for bankruptcy-court protection, grounding all flights and stranding thousands of passengers.
The Indianapolis-based airline became the second U.S. carrier this week to end passenger service. On Monday, Aloha Airlines ended passenger service to Hawaii and within the islands.
Joe Brancatelli, a business-travel consultant, said that the loss of the two airlines “is going to create a real crisis” in the availability of flight options for travel to and from Hawaii in the upcoming months.
ATA operated 44 flights a day, including eight at Oakland Airport and three at Los Angeles International Airport, two of which flew to Honolulu and the other to Kahului Airport on Maui. ATA had a handful of flights out of Seattle-Tacoma International Airport.
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“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,” said Doug Yakola, the chief operating officer, in a statement.
The company filed for bankruptcy protection late Wednesday.
While the latest shutdowns are likely to affect flights to Hawaii, they are not expected to be a harbinger of broader airline woes. Though the industry is likely to post a loss this year, many carriers are expected to survive the high fuel costs and a slump in air travel with the slowing economy.
“Our conclusion is that the network carriers and most of the low-cost carriers will survive the weak economic environment and high fuel prices over the next two years,” said Ray Neidl, an analyst for Calyon Securities, in a report to investors.
In a statement, ATA said it was forced to ground operations because it lost a key military charter contract. In addition to scheduled airline service, ATA flew for the Pentagon.
ATA said passengers should seek alternative travel arrangements on their own. Those who paid by credit card should call their providers to seek refunds. Those who paid cash may be able to recover some by submitting a claim with the bankruptcy court.
Southwest Airlines said its passengers, who purchased ATA tickets through the airlines code-share arrangement, can rebook or receive a refund.