ATA Airlines, Inc. – formerly known as American Trans Air and commonly referred to as ATA – was an American low-cost scheduled service and charter airline based in Indianapolis, Indiana. ATA operated scheduled passenger flights throughout the U.S. mainland and Hawaii and San Juan, Puerto Rico, as well as military and commercial charter flights around the world. ATA also operated flights to Portugal (LIS, OPO, TER, PDL and SMA). In its early days the airline flew charters on a worldwide basis and had bases in Chicago, Detroit, New York, Indianapolis, Oakland and Milwaukee. Later when it entered scheduled service the airline maintained focus cities at Chicago Midway International Airport, Honolulu International Airport, and Oakland International Airport.
The airline's parent company – New ATA Holdings, Inc. (the successor to ATA Holdings Inc., which was also once known as Amtran) – later changed its name to Global Aero Logistics, Inc. and purchased World Air Holdings, Inc. for $315 million in an all-cash transaction with the financial backing of the investment firm, MatlinPatterson. World Air Holdings, Inc. owned and operated North American Airlines and World Airways as two separate US-certified air carriers. ATA was North America's largest charter airline, and until its shutdown transported more troops for the United States military than any other commercial airline.
On April 2, 2008, ATA filed for Chapter 11 bankruptcy protection. ATA then announced it was ceasing all services, effective 4:00 am EDT, Thursday April 3, 2008, citing the unexpected loss of a major contract for its military charter business, as a subcontractor of FedEx Express, along with recent increases in jet fuel prices. Red-eye flights in the air at the time of the announcement proceeded to their destinations. Flight 4586 from Honolulu to Phoenix was the last ATA flight, departing almost two hours late at 12:10 am (HST) arriving April 3, 2008 at 8:48 am (MST).
Southwest Airlines owns and retains all ownership of the operating certificate and all assets held by ATA Airlines including trademarks, logos, etc. These were purchased for $7.5 million by Southwest while ATA was operating under bankruptcy protection.
ATA was established in February 1973 as Ambassadair travel club. Its first aircraft was a Boeing 720 named "Miss Indy", with a second Boeing 720 ("Spirit of Indiana") added in 1978. ATA received its common-air carrier certificate in March 1981. Operations started as a charter carrier in 1981, with a fleet of eight Boeing 707s based in Indianapolis, Indiana. In 1983, American Trans Air introduced its first McDonnell Douglas DC-10, a series -10, and was followed in 1984 by another, a long range series -40. Amtran, Inc. was founded by owner J. George Mikelsons in 1984, as the holding company for Ambassadair, ATA, and any future subsidiaries. The airline replaced the 707s with Boeing 727-100 trijets in 1984, and added Rolls-Royce powered Lockheed L-1011 TriStar wide body jetliners (most of which were ex-Delta Air Lines and TWA) in 1985, and Boeing 757-200s in 1989. ATA was an all charter airline flying to destinations all over the World. American Trans Air started its first scheduled service in 1986 between Indianapolis, Indiana (Indianapolis International Airport) and Fort Myers, Florida (Southwest Florida International Airport).
In 1990, ATA began scheduled nonstop service from New York JFK Airport to Belfast, Northern Ireland in the United Kingdom with continuing direct one stop service to Riga, Latvia with Boeing 757-200 aircraft. The founder of ATA is of Latvian ancestry. The Latvia service was unprofitable and was discontinued after a few years.
ATA performed services for the United States Department of Defense and US military during the 1991 Gulf War, transporting 108,000 military personnel on 494 missions for Operation Desert Storm and yet again during Iraqi Freedom and Enduring Freedom with the activation of the Civil Reserve Air Fleet ("CRAF"). During these periodic activations, ATA flight crews often and routinely spent as many as 19 hours aboard ATA aircraft in support of U.S. troops and the overall national defense missions. ATA's L-1011 aircraft were also chartered by the Department of Defense to fly personnel and their families between Philadelphia International Airport and Lajes Field, Naval Air Station Sigonella, Aviano Air Base and Incirlik Air Base (called "Freedom Flights" by personnel returning to the U.S. from these overseas installations).
In February 1991, ATA won a contract for daily 727-100 shuttle operations between Nellis Air Force Base and Tonopah Test Range in Nevada. This particular contract, formerly operated by defunct Key Airlines, was awarded to ATA and ended in late 1992 when Tonopah F-117 Stealth Fighter operations ceased. The 727-100s were replaced with Boeing 727-200s in 1993. Also in 1993, according to the Official Airline Guide (OAG), ATA was operating scheduled passenger service between New York JFK Airport and Lagos, Nigeria via a stop at Santa Maria Island in the Azores with a Lockheed L-1011 TriStar wide body jetliner.
By the mid-1990s, ATA began focusing on increasing its domestic scheduled services including Hawaii as well as international routes to Mexico and the Caribbean (based on leisure travel) and began using the slogan, "On ATA, You're on Vacation." The airline began operating a sizable hub at Chicago Midway International Airport, and offered scheduled services throughout the United States, as well as flights to Hawaii, Mexico and the Caribbean while continuing extensive military and government contract air charter flights.
ATA also began a twice weekly charter service from Orlando to both London Gatwick Airport and Manchester in the UK. All services operated via Gander in eastern Canada where the aircraft would refuel. Most seats were reserved by UK tour operator Travel City Direct who specialized in Florida fly-drive vacations. Travel City boasted higher luggage allowances, complimentary meals and snacks plus leather seats. Remaining seats were often filled by American military staff.
Services to the UK ceased in 2002 when Travel City switched to another airline; Air Atlanta Europe.
In 2000, ATA placed a large order for 39 new Boeing 737-800 aircraft and 12 Boeing 757-300 aircraft to expand its fleet for additional flights from Midway. That year, the airline also began scheduled flights to Mexico and was designated as a major carrier by the United States Department of Transportation.
In June 2001, ATA received the delivery of their first new aircraft, Boeing 737-800 registered as "N301TZ". In August of that same year, the airline received the delivery of another new type of aircraft, the Boeing 757-300; whom ATA became the North American Launch customer of this particular type. ATA's first 757-300 was registered "N550TZ" and the airline also introduced a new logo on these new airplanes, replacing ATA as a "vacation airline" and putting more emphasis on ATA as a "business airline."
After 2001 the 737-800 with their ETOPS capabilities became the fleet's mainstay of ATA's medium haul operations from the west coast to and from Hawaii and Mexico.
In 2000, ATA and Chicago Express Airlines launched ATA Connection, a regional affiliate of ATA Airlines that would link regional mid-western cities with ATA's Chicago hub and Indianapolis focus city. Chicago Express was purchased for $1.9 million on June 1, 1999, and operated as a separate subsidiary. After ATA entered bankruptcy in late 2004, a decision was made to end ATA's regional airline service and terminate Chicago Express/ATA Connection resulting in the permanent layoff of its entire staff. Chicago Express' assets were auctioned off, ATA terminated its ATA Connection turboprop service and Chicago Express ceased all operations on March 28, 2005.
The similarity of the American Trans Air and AirTran Airways names to those of other airlines caused confusion among customers and the general public. The airline had been known informally as ATA from early in its history, and from the mid-1990s on had been advertised as such, so in 2002 the name of the holding company was changed to ATA Holdings Corp. In 2003, the name of the airline itself was changed to ATA Airlines, Inc. In 2007, ATA Holdings changed names again; this time to Global Aero Logistics, Inc., immediately after the acquisition of World Air Holdings.
After the economic upheaval caused by the 9/11 attacks upon the airline industry of the United States, ATA and its then parent company AMTRAN suffered substantial financial hardships. Among one of the small group of airlines to receive ATSB backing from the US Government, this alone proved not enough for American Trans Air to remain out of reorganization caused from the hardships and ill-timing of the refleeting to 737-800's just prior to the terrorism attacks.
On October 26, 2004, ATA Holdings and its subsidiaries filed for Chapter 11 bankruptcy protection. Eventually, shareholders of ATA Holdings stock lost all their money and received no shares. The stock, previously traded on the Nasdaq stock exchange as "ATAH", was delisted.
In 2004, AirTran Airways agreed to pay $90 million for ATA's 14 gates at Chicago-Midway. Southwest made a higher bid and AirTran's deal fell apart.
In December 2004, ATA entered into an agreement with Southwest Airlines to transfer six gates at Chicago Midway International Airport and 27% of non-voting stock in exchange for a cash influx and codeshare agreement.
In the beginning of 2005, the airline drastically reduced flights at its Indianapolis hub to only three destinations and centered scheduled flights at Chicago Midway International Airport in order to complement Southwest Airlines codeshare flights. ATA also focused on serving markets that were business oriented and did not have Southwest service, such as San Francisco, Dallas/Fort Worth, and New York–LaGuardia. Additionally, ATA began offering point-to-point service not connecting to its Midway Hub, as to benefit other Southwest Airlines focus cities, such as Las Vegas, Orlando, and Phoenix, with connections to non-Southwest destinations such as Denver and Hawaii. Southwest CEO Gary Kelly said that revenues were up nearly 20% due to the new codesharing agreement.
On March 28, 2005, ATA shut down its commuter airline service, ATA Connection operated by Chicago Express Airlines via a codeshare agreement, and later sold the assets to a private buyer. ATA Connection had initially operated British Aerospace Jetstream 31 turboprops which were then replaced with Saab 340B turboprops and was providing passenger feed for ATA at Chicago Midway Airport via a code sharing agreement. In attempt to reduce operating costs, the airline also downsized its fleet by returning twenty Boeing 737-800 and eight Boeing 757-300 aircraft, along with numerous Boeing 757-200 aircraft. The eight 757-300 airframes were subsequently refurbished by Boeing, the lessor, and then leased to Continental Airlines.
In mid-2005, ATA entered an agreement to lease three ex-United Airlines Boeing 737-300 aircraft. Three 737-300s entered service with ATA in late November 2005. Due to high lease rates, the three 737-300s were taken out of service in November 2007, and returned to their owners.
In September 2005, ATA outsourced all its Heavy Maintenance Checks to overseas and domestic contractors. Also planned was an agreement with Continental Airlines to trade ATA's remaining four 757-300 aircraft for four 737-700 aircraft. In early October 2005, ATA terminated these negotiations due to the Boeing machinists strike, which would delay the delivery of the aircraft.
On October 13, 2005, ATA announced major service reductions, ending flights to Boston, Minneapolis/St. Paul, and Newark. In addition, the planned addition of flights to Miami and Sarasota, Florida was cancelled. This ended Southwest codeshare service to Minneapolis and Newark. Later that year, on November 1, 2005, a second round of flight cuts were announced, including the suspension of scheduled service to Denver, San Juan, and their headquarters and former hub Indianapolis.
On November 17, 2005, ATA Airlines received court approval to sell its Ambassadair Travel Club division to Grueninger Cruises and Tours.
In a third round of cuts announced on December 6, 2005, ATA announced that it would discontinue service to three additional cities. ATA would suspend flights from Chicago Midway International Airport to San Francisco, Orlando, and Fort Myers in late April 2006. Following these cancellations, ATA would have only 18 daily scheduled departures from its former Chicago hub and 52 scheduled departures company-wide. Moreover, the company would be left with only 1 gate at Midway, down from its previous total of 14, surrendering the balance to Southwest or the city.
On December 15, 2005, ATA announced an expansion of its codeshare agreement with Southwest Airlines. ATA Airlines would expand codesharing with Southwest Airlines between Dallas-Fort Worth International Airport and cities in the Southwest system that connect via Chicago Midway International Airport.
In January 2006, MatlinPatterson and certain pre-bankruptcy creditors invested over $100 million in ATA and took the company private, also taking over ATA Holdings, Inc. Following the transaction, on February 28, 2006, ATA Airlines emerged from Chapter 11 bankruptcy protection. However, the airline was still shrinking. ATA continued to return more aircraft, including the 1,500th Boeing 737 Next Generation produced, N333TZ, which was delivered new to ATA on May 14, 2004.
Following its first emergence from Chapter 11 protection ATA made several efforts to return to profitability, but due to the rising cost of fuel and negative pressures on ticket price ATA was unable to recover.
On April 2, 2008, ATA declared bankruptcy and ceased all operations. This sudden end came about after FedEx abruptly canceled ATA's longstanding military charter contract. Combined with a significant increase in the price of jet fuel, ATA did not have enough capital to stay in business. It was the third of four U.S. airlines to announce a complete shut down in the week of March 30, 2008, after Aloha Airlines did so on March 30, Minnesota-based charter Champion Air did so March 31, and Skybus Airlines terminated service on April 5. The shutdown of ATA took effect at 4:00 am EDT, Thursday April 3, 2008, although some flights were airborne at the time and continued to their destinations, with the final arrival being ATA flight 4586 from Honolulu to Phoenix, which landed at 8:46 am, MST, or seven hours and 46 minutes after the announced shutdown. At the time of the shutdown ATA employed around 2,300 people, all of whom were permanently laid off. According to press reports, up to 10,000 passengers were affected and many of them had to scramble for help on several airlines. Most of them, however, had to pay for new tickets.
On November 19, 2008, Southwest Airlines announced their intent to acquire the remaining assets of ATA Airlines. The $7.5 million bid includes the rights to 14 slots at LaGuardia Airport that belonged to ATA, as well as various other assets such as trademarks and logos. Southwest specifically stated their bid "doesn't include any aircraft, facilities or employees of ATA."