US low-cost carrier ATA Airlines has filed for Chapter 11 bankruptcy protection and plans to sell its operations at Chicago Midway airport and slots at two other airports to AirTran Airways. Meanwhile, low-cost start-up Independence Air is restructuring to address widening losses.
"ATA will develop a plan of reorganisation to address its debt levels and other obligations, and to lower its cost structure, while operating in the normal course of business," says ATA.
George Mikelsons, chief executive of parent company ATA Holdings, says excess capacity, high fuel prices and declining fares have forced the airline to "re-examine" its business.
Under a proposed deal, AirTran will pay $87.6 million for ATA's flight operations, gate leases and routes at Midway, as well as arrival and departure slots at New York LaGuardia airport and Washington National airport.
Meanwhile, Washington Dulles-based Flyi, parent of Independence Air, made a net loss of almost $83 million in third quarter 2004 and says it is "pursuing the sale or refinancing of certain of its owned aircraft and parts inventory". Flyi, which had a net income of $21 million in the third quarter 2003, saw revenue for the three-month period ending on 30 September drop 45.9% to $120 million, while expenses rose 24.2% to $228 million.
* Delta Air Lines has secured a tentative labour agreement with its pilots' union covering concessions worth $1 billion annually.
Source: Flight International
