Two More US Airlines Shut Down

In describing precipitating factors in ATA Airlines filing for Bankruptcy protection, Doug Yakola, the carrier’s COO noted, “the cancellation of a critical agreement for our military charter business,” as well as the “tremendous spike in the price of jet fuel in recent months.”

The agreement was one that had ATA as a member of the FedEx team that provides airlift for moving military personnel and their families to and from overseas destinations. According to ATA, FedEx had informed the airline that it would not be a member of the team for the federal fiscal year that begins October 2008. “This termination is a full year earlier than the term specified in a letter of agreement between FedEx and ATA,” says ATA.

Since the carrier’s scheduled service had suffered greatly from increases in fuel costs and the arrangement as part of the FedEx team represented most of ATA’s charter business, the carrier concluded it was necessary to seek bankruptcy protection.

ATA had handled its own cargo business, principally at locations in Chicago and Dallas in the Continental US, at Hilo and Honolulu in Hawaii and at Guadalajara, Mexico. Shipments pending with the airline could be retrieved at shipper’s local ATA Cargo facilities. The airline was not making payments for loss, damage or pilferage of cargo claims, suggesting those who have such claims submit them to the Bankruptcy Court. Court filings and claims information is available at www.bmcgroup.cm/ataairlines.

With headquarters in Columbus, OH, Skybus Airlines began flying in May 2007. It sought to compete as an extremely low-cost airline, using Ireland’s Ryanair as a business model. As with Ryanair, Skybus flew to secondary US airports rather than those that are larger with heavier traffic. In order to generate revenue, it also sold merchandise on board and carried interior and exterior advertising.

As one of the only totally non-union US airlines at the time it shut down Skybus was faced with a pilot’s unionizing campaign that offered strong prospects of being successful. Skybus did not handle its own cargo, instead it had a relationship with Mercury World Cargo for moving air freight.