ATA Airlines

Logo of ATA Connection (2000–2001)

ATA was established in August 1973 as American Trans Air (ATA) to provide aircraft for 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, followed in 1984 by 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.[8] 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.[9]

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."[10] 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.[11] 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 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 737-800s 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.[12] 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 canceled. 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.[13]

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 and ended operations on April 2, 2008. These late efforts included:

• ATA commenced service between Houston's William P. Hobby Airport (HOU) and New York's LaGuardia Airport (LGA).
• ATA initiated new flights out of Oakland, California, Ontario, California and Hilo, Hawaii on April 28, 2006.
• In support of its codeshare agreement with Southwest Airlines, ATA moved its operations in the greater San Francisco area from San Francisco International Airport to Oakland International Airport.
• ATA introduced several new flights from the West Coast of the United States to and from Hawaii including the only nonstop service between Hilo, Hawaii and the mainland United States.
• ATA announced they would purchase nine of Northwest Airlines remaining DC-10-30s. These aircraft were to be used on military troop charters, replacing ATA's aging L1011-500 fleet. ATA planned to enter seven of the planes into service, mothballing the remainder for parts.

• ATA Airlines announced that Subodh Karnik would become ATA's new president and chief executive officer (CEO) replacing John G. Denison, who continued as ATA's chairman of the board of directors.
• ATA for the first time in three years added several flights to and from its Chicago (MDW) hub.
• ATA's parent company, ATA Holdings, announced on April 5, 2007, that it would change its name to Global Aero Logistics, Inc., in a move that, according to then-CEO Subodh Karnik, "better reflects the company's diverse, worldwide operations."[14] That same day, Global Aero Logistics, Inc. announced an agreement to acquire World Air Holdings, Inc. and its subsidiaries, World Airways and North American Airlines, for $315 million in cash. Each airline, as stated in the official announcement, was to keep operating independently.[15] With the acquisition of World Airways, and the holding companies organizational name change to Global Aero Logistics, it was decided that three of the planned nine DC-10s acquired by ATA would be transferred directly to World Airways' operating certificate, resulting in employee layoffs at ATA.
• Starting in October 2007, ATA announced they would terminate service on several routes affecting, Chicago, IL Chicago Midway International Airport, Washington, D.C. (Washington D.C. Reagan National Airport), New York, NY (LaGuardia Airport), and Ontario, CA (LA/Ontario International Airport). These service cuts left ATA operating to four destinations from its former Chicago hub.

• In March 2008, Subodh Karnik resigned as CEO and former CEO and chairman of the board John G. Denison served as acting CEO until ATA's demise. No public reason was given for Karnik's departure, but the airline's financial problems coupled with the poor execution of the purchase of several DC-10s for use as military charters was rumored to have been a factor.

• A federal jury for the U.S. District Court in Indianapolis says FedEx must pay $66 million to now-defunct ATA Airlines, saying the package delivery company broke a contract that ultimately pushed ATA into bankruptcy. $22 million for lost profit in 2008 and $44 million for lost profit in 2009. However, in December 2011, a Federal appellate court in Chicago reversed the $66 million judgment against FedEx.[16]

Flight crew of the last ATA Airlines revenue flight, AMT4586, after completing a segment from Honolulu to Phoenix. Captain Mark Groover and First Officer Philip Collier.

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,[17] 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.[18] 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."[19]

On March 15, 2008, ATA was supposed to resume service to Miami International Airport, and fly scheduled flights to Central America for the first time with the addition of flights to Guatemala City and San José, Costa Rica.[25] USALatin Sky was to market the airline's flights to Central American destinations from Miami.[26] As part of the deal, ATA Airlines would have based a single Boeing 737-800 aircraft in Miami to fly the routes to Guatemala City and San José.[27] Due to problems with ATA and USALatin Sky, the service was canceled prior to commencing, and no flights under USALatin Sky ever operated.[28]

An ATA Lockheed L-1011-1

The aircraft registration and tail numbers of the ATA fleet include the following significant aircraft.

• ATA received delivery of their first 737-800 (N301TZ) on June 4, 2001.
• ATA received delivery of their first 757-200 (N757AT) on November 16, 1989.
• ATA received delivery of their first 757-300 (N550TZ) on August 4, 2001.
• ATA received delivery of their first L-1011-500 (N163AT) on July 28, 1998.
• ATA received delivery of their first DC-10-30 (N701TZ Freedom Bird) on December 29, 2006.
• ATA L-1011-100 (N194AT), crewed by FAs out of DFW, was the last ATA aircraft to feature a lower galley.[33]

ATA ExecuJet, a Part 135 air taxi subsidiary of ATA Holdings, the parent company of ATA Airline, also retired the following aircraft in 2001:[34]

• Bell 206L Long Ranger, owned by ATA's founder, J. George Mikelsons
• Cessna Citation II
• Grumman Gulfstream I
• Learjet 35

Launched in 2003, ATA's frequent flyer program, ATA Travel Awards, offered one of the lowest thresholds for earning travel, with the added benefit of allowing reward redemption free of blackout date restrictions. After three roundtrips booked on the company's website, customers earned a coach companion ticket on any flight operated by ATA Airlines throughout the contiguous United States. All tickets booked online received double credit toward that particular trip versus purchasing through a telephone or travel agent. While award availability to Hawaii was very limited, travelers did earn twice the normal number of credits when they purchased airfare on Hawaii-bound flights. With the shutdown of operations, ATA's frequent flyer programs were suspended and all earned points voided.

As a result of the recent enhancements in ATA's codeshare agreement with Southwest Airlines, those purchasing flights directly from ATA reservations and ata.com were given the option of earning points toward either ATA Travel Awards, or Southwest's Rapid Rewards. When ATA ceased operations, the relationship with Southwest Airlines was effectively terminated.

Launched in 2006, ATA created a unique program called FlightBank,[35] a rewards program for the frequent traveler between the U.S. mainland and the Hawaiian Islands.[36] For a set "fee", the "bank" provided the traveler with a flexible number of flight credits that could be used over the course of a year, at vastly reduced savings and with no blackout dates for advance bookings. (The Flightbank program was preceded by the airpass program which was run informally by Pleasant Hawaiian Holidays from 2000 to 2006.) With the shutdown of operations, ATA's FlightBank program was also suspended.

ATA Airlines, one of Southwest Airlines' main competitors in the Chicago market, historically operated out of Midway Airport alongside Southwest. After ATA declared bankruptcy in 2004, Southwest injected capital into ATA that (among other things) would have resulted in Southwest's 27.5% ownership stake in ATA upon their exit from Chapter 11 bankruptcy proceedings.

In a departure from its traditional "go it alone" strategy, Southwest entered into its first domestic codesharing arrangement with ATA, which enabled Southwest Airlines to serve ATA markets in Hawaii, Washington D.C., and New York City. Some years earlier, Southwest had a short-lived traditional codeshare arrangement with Icelandair at Baltimore/Washington International Airport.

In late 2005, ATA secured $100 million in committed financing from the firm of MatlinPatterson, and Southwest's original deal with ATA was modified such that Southwest no longer retained the 27.5% stake (or any other financial interest), in ATA. The codeshare arrangement was expanded, with some internal controversy, to include all of ATA's domestic destinations and more than 60 of Southwest's 63 destinations. In 2006, Southwest's pilot union approved a codeshare sideletter to their contract with limitations on the growth of this and other codeshare agreements. While these restrictions today are minor, outsourcing remains a growing concern in the unions' current contract negotiations.

In 2006, Southwest Airlines (Flight Code WN) began marketing ATA's two-letter TZ Coded Flights. ATA's dependence on the Southwest network continued to grow in 2006 to where ATA offered over 70 flights a week to Hawaii from Southwest's focus cities in PHX, LAS, LAX, and OAK. Additional connecting service was available to many other cities across the United States. Plans had been announced for ATA to offer exclusive international service for Southwest by 2010. In 2006, ATA announced its intention to purchase nine widebody DC-10 aircraft from Northwest Airlines. Southwest took over all ground operations for ATA at MDW, OAK, PHX, LAX, and LAS. These contracts provided that Southwest ramp personnel would now handle all ground operations for ATA (loading of aircraft, ground servicing, etc.). The details of these contracts were not made public, but represented Southwest's and ATA's growing codeshare relationship.

In February 2005, after J. George Mikelsons stepped down as CEO of ATA Airlines, John Denison, Southwest's former Chief Financial Officer took over. Effective January 1, 2007, Denison turned things over to Subodh Karnik, who became president and chief executive officer. Denison remained Chairman of Global Aero Logistics Inc., and was renamed as interim President and CEO when Subodh Karnik stepped down in March 2008.[42][43][44]

ATA's last livery, known as the "Flag Livery", was introduced when the airline announced rapid expansion in 2001. It is primarily white with "ATA" painted on both sides of the aircraft. The company logo was also slanted upward on the aircraft tail resembling a flag. There was a gold stripe that spanned across the outward side of the engines and nacelles, and the winglets (on the 737-800s) were blue on the outside and unpainted on the inside. This livery was first introduced on ATA's new 737-800 and 757-300 aircraft and while it has been integrated onto some of ATA's 757-200s, it was never painted on any of ATA's 727s which were retired in late 2001.

At the time of ATA's demise, many 757-200s and some Lockheed L-1011s still carried the airline's previous livery. The "Palm Tree Livery", which was introduced in 1996, was also primarily white with "ATA" painted on both sides of the aircraft; the letters were painted in a "bubble-like" fashion. There was a palm tree and a sun on the tail, as well as "ATA" in small letters. The engine nacelles were painted blue, with the outboard side of each nacelle displaying a stylized sun. This livery, introduced to emphasize ATA as a "vacation airline", was synonymous with the phrase "On ATA, You're on Vacation".

ATA's original livery, known as the "Runway Livery", was introduced when the airline began passenger service in 1981. Because ATA's first aircraft were ex-American Airlines aircraft, ATA's original livery was based on American's livery. The livery featured three stripes running the length of the aircraft in the following order: gold, white, and blue. The words "American Trans Air" followed by ATA's "runway logo" were painted above the gold stripe on the fuselage. The aircraft tail also featured gold, white, and blue stripes along the bottom with a bigger ATA runway logo in the center. All of ATA's Boeing 707s, and a majority of the airline's 727s, 757-200s, and Lockheed L-1011s wore this livery at some point. This livery was painted on every ATA aircraft until 1996, making this ATA's longest lasting livery at 15 years.

ATA Airlines Boeing 757-200 (N520AT) and Boeing 727-200 (N772AT) in the 25th anniversary livery at MDW

Throughout ATA Airlines' history, the company had two dedicated paint schemes. In addition to these, ATA's first Boeing 737-800 had the words "American Dream" inscribed alongside the nose of the aircraft; it was the only aircraft in ATA's fleet to have those words written on it. Other schemes were used to celebrate the company's 25th anniversary, as well as a marketing deal with Hawaiian tour operator, Pleasant Hawaiian Holidays.

In 1998, ATA Airlines celebrated its 25th anniversary. The airline decided to commemorate the anniversary in a big way. In addition to a year-long celebration, two separate aircraft, N772AT (a Boeing 727-200) and N520AT (a Boeing 757-200), were given a special livery which was commonly referred to as the "25th Anniversary Scheme". The design featured the entire airplane painted blue with "25th Anniversary" painted in large gold writing near the front of the aircraft fuselage. The aircraft tail featured "ATA" in gold lettering with pieces of confetti scattered around the ATA logo. Red, orange, pink, and yellow streamers adorned the sides of the fuselage, as well as the engines.

In 1994, ATA partnered with tour operator Pleasant Hawaiian Holidays, which was the largest tour operator flying to Hawaii. To promote the alliance, several L-1011s were adorned in a "Hawaiian livery". The "Pleasant Hawaiian Holidays" livery has appeared only on two types of ATA's aircraft: the Lockheed L-1011, and later, the Boeing 757-300. The livery had two different forms; the more extravagant was painted on the Lockheed L-1011s. The livery was primarily white and featured "ATA" in big bubble letters near the front of the aircraft, and "Pleasant Hawaiian Holidays" spelled out after "ATA" near the top of the fuselage. Like the mainline livery, the engines were painted with a sun. The livery basically resembled the "Palm Tree Livery" that mainline aircraft adorned at the time. There was one big difference. "Hawaii" was spelled out in large letters horizontally across the aircraft tail. After the L-1011s were removed from scheduled service in 2002, two Boeing 757-300s were painted in the Pleasant Hawaiian Holidays livery; the elaborate TriStar livery was replaced with a toned-down livery. The new livery was ATA's current livery with the words "Pleasant Holidays" painted in small letters near the front of the fuselage. This livery and ATA's partnership with Pleasant Hawaiian Holidays was terminated in 2005 when Pleasant Hawaiian Holidays signed a larger network deal with United Airlines.