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Apr 3, 2008 5:03 pm US/Central
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ATA Airlines Out Of Business
All Current, Future Flights Canceled
CHICAGO (CBS) ―
ATA Airlines announced Thursday morning it is shutting down all operations and canceling all current and future flights, only a day after filing for Chapter 11 bankruptcy.
The Indianapolis-based airline, once the nation's 10th largest, shut down operations as of 3 a.m. Thursday morning. The airline was serving about 10,000 passengers a day at the time it stopped flying.
Customers who arrived for flights at Midway International Airport were turned away Thursday morning, while employees who showed up for work were told they were no longer needed.
There had been flights scheduled for Thursday from Midway to Dallas, Oakland, Honolulu and Cancun.
The Midway ticket counter was lifeless Thursday. Only a flier with limited information was posted.
Lindsey Steffe was among the many angry passengers who found out Thursday their ATA tickets were worthless. The news came in the form of a note posted at a gate without agents.
When air travelers came to Midway with no advance notice that ATA had gone out of business, staff from Southwest Airlines tried to help them salvage their travel plans.
The lines at the Southwest ticketing counter were full of former ATA passengers. The airline was allowing ATA passengers to fly stand-by.
But many were frustrated regardless.
"There's no one to help us," one woman said. "I mean, what do you do?"
"We drove here from Indianapolis to get a flight to go to Hawaii, and my son and his buddy are on spring break, and we're just like in shock. We had no idea," said ATA passenger Donna Fregeau at Midway. "I tried to call them yesterday just to check in, and I was on the phone for a like an hour and no one ever picked up, so I finally just hung up and tried again last night, and couldn't get through. So we just came here this morning and just found out."
Fregeau said she was not giving up on getting to Hawaii, but others were not so optimistic.
"I'm very upset, especially getting up this early," added ATA passenger Leslie Gromadzki, "and now they're saying that the other airlines may not even offer for us to fly on theirs, so we're kind of stuck."
Some passengers were confused when they arrived at ticket counters.
"So I'm flying with one adult, one child, so yes, I'm a little aggravated. I don't know what line to stand in," said passenger Lynn Stanek. "I'll find out; I'm going to go up and ask somebody now, but I don't know where I'm supposed to be going."
ATA said it has been in contact with other airlines that may be able to assist with travelers holding tickets that the airline can no longer honor.
Southwest will honor ATA tickets for the next two weeks, but remember that's only if Southwest offers flights to the same destination.
ATA's shutdown comes after the airline filed for Chapter 11 bankruptcy on Wednesday in Indianapolis. In a statement posted on its Web site Thursday morning, the airline said it had become impossible to continue operations after the loss of a key contract for its military charter business.
"I hate to say this, but I believe it was also mismanagement," said longtime employee Chaun Welch-McNish.
He got word of the shutdown late Wednesday night, along with more than 2,200 others who are now unemployed.
"Virtually all of ATA's employees are being notified today that their positions are eliminated," Freitag said.
The airline said in a statement that ATA customers should "seek alternative operations for current and future travel. They have
composed a list of other airlines serving the same destinations as ATA. ATA said if passengers bought tickets using a credit card, they should contact their credit card company or travel agency to inquire about a refund for unused tickets. For tickets purchased with cash or check directly from ATA, refunds are not currently available, the airline said.
Cash or check customers may receive full or partial refunds by submitting a claim to the
Chapter 11 proceedings for ATA, the airline said. Refunds are not guaranteed. You can also get information about submitting a claim by calling (888) 909-0100.
Customer service information from ATA is available at (800) 435-9282.
ATA operates a code sharing agreement with Southwest Airlines under which passengers can buy a ticket and fly on either airline to certain destinations. The airline said anyone who purchased tickets under that agreement should call Southwest Airlines at (800) 308-5037.
ATA announced last month that it would leave its hub at Midway, a move for which the airline blamed high fuel prices. Previously, the airline had planned to stop domestic flights out of Midway on April 14 and flights to Mexico on June 7.
The airline had flights from Midway to Dallas/Fort Worth and Oakland, Calif. It also had flights to Hawaii from Oakland, Los Angeles, Phoenix and Las Vegas. It has used Midway as a hub since 1992.
The carrier retrenched in 2006 after emerging from bankruptcy, focusing on destinations in the Southwest and an increase in military charter business. But like other airlines, it has struggled in a foundering economy and has been unable to offset soaring fuel prices.
Fuel is one of the industry's top costs and has pushed some carriers into merger talks.
Major airlines, to offset record fuel prices, have slashed amenities that were once free and added fees for second bags, traveling with pets and booking tickets by phone.
United Airlines said new luggage fees it has imposed on travelers will generate more than $100 million annually.
ATA came out of bankruptcy with several other carriers two years ago, and it became the second to declare bankruptcy in just the past two weeks, both with operations in Hawaii. Aloha Airlines filed for Chapter 11 bankruptcy protection last month, a little more than two years after emerging from bankruptcy.
The chief executive officer at ATA's parent company resigned two weeks ago. Subodh Karnik, who had been CEO at ATA, stepped down after heavy pressure from a major investment firm to turn the airline around.
CBS 2's Kristyn Hartman and Dorothy Tucker, and the Associated Press contributed to this report.
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