ATA is latest airline to shut down

Alisa Roth Apr 3, 2008


Scott Jagow: The people who work at ATA airlines will likely be heading to the unemployment office themselves. ATA filed for bankruptcy this morning and shut everything down. It’s the fourth airline to go under since the beginning of the year. Remember earlier this week, Aloha Airlines stopped flying. Alisa Roth has more on ATA’s demise.

Alisa Roth: All ATA flights are canceled. Its Web site is directing passengers to airlines that fly the same routes, though with no guarantees they’ll honor ATA tickets. And most of the company’s more than 2,200 employees are waking up to no job this morning.

Industry consultant Julius Maldutis says passengers should get ready for a long ride. He guesses ATA won’t be the last to go under.

Julius Maldutis: It’s probably the start of quite a few others because of where oil prices are today.

ATA cited losing a military contract as another reason for closing up shop. The airline had only pulled out of bankruptcy two years ago. Maldutis expects the airlines that do survive will end up consolidating, a move that will almost certainly translate to higher fares. But there may be a silver lining: fewer airlines may mean less congestion at the airport.

In New York, I’m Alisa Roth for Marketplace.

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