ATA Files Bankruptcy, Strands Passengers

Indianapolis-based ATA Airlines discontinued all flights Thursday and sent a call for help to other airlines to accommodate its stranded passengers after filing for bankruptcy. The carrier said in a statement on its Web site that it became impossible to continue operations after losing a key contract for its military charter business.

Before its bankruptcy filing, the carrier was operating 50 flights per day, mostly between Hawaii and four west coast cities: Oakland, Los Angeles, Phoenix and Las Vegas. Over 2,200 employees were still working at the failing carrier. The military contract substaining the airline was worth $355 million from the U.S. Air Force for international airlift services.

But with rising fuel prices and the floundering economy, the carrier has struggled, and the chief executive officer of ATA's parent company resigned under pressure two weeks ago. Last month ATA left Chicago's Midway Airport, which it had used as a hub since 1992. The carrier has declared bankruptcy before, but was brought out of it in 2006 by an investment company.