AirTran To Take Over Flight Ops, Gates

ATA, the nation's tenth-largest airline, filed for bankruptcy late Tuesday, presenting the federal court with a full plan for turning over its operations to rival low-cost carrier AirTran.

"Excess capacity, extremely high fuel prices, which continue to escalate, and declining fares have necessitated that all airlines, including ATA, re-examine their business," said the CEO of ATA's parent group, George Mikelsons.

AirTran was one of two airlines thought to have been in negotiations with ATA. Now, ATA says AirTran will pay $87.5 million for ATA's gate leases, flight operations and routes eminating from Chicago, New York and Washington. The fate of the company's 7,700 workers has not yet been disclosed.

Earlier in the day, pilots like Erick Enghdal, an ALPA executive, suggested ATA might set off a bidding war for its gates at Chicago Midway in hopes of creating a soft landing back where it started, in Indianapolis. "There's something going on but it's very quiet," Engdahl told the Indianapolis Star. "I think ATA wants to go in (to bankruptcy) with something like a prenuptial with someone else who will merge with them and give them the extra cash they need to continue operating."

There appeared to be no reason for ATA to go back to its unions for more concessions. Already, pilots have forked over $43 million worth of compensation during the next two years. Flight attendants have okayed another $24 million.

FMI: www.ata.com