ATA Airlines closes

From combined dispatches

Put that luau on hold.

ATA Airlines Inc., the Midwest carrier with frequent service to Hawaii, which recently cut flights to try to survive, became the second regional airline to shut down this week.

The airline sought Bankruptcy Court protection for the second time in four years late Wednesday in Indianapolis, where it is based. The company will no longer honor tickets or reservations, blaming high fuel prices and the loss of a contract for military charter flights for its demise.

ATA is at least the third low-cost carrier to file for bankruptcy since 2005 as a 70 percent increase in jet fuel prices in the past year has surpassed labor as the biggest expense for many airlines. Hawaiian carrier Aloha Airgroup Inc. ceased operations last month because of bankruptcy.

The abrupt shutdowns of ATA and Aloha won’t keep travelers off Hawaii’s shores altogether, but they could make an already expensive vacation destination even pricier and potentially put the leis and luaus out of reach for many.

Aloha, which served Hawaii for more than 60 years and was the islands’ second-largest carrier, ended passenger service Monday.

“It’ll hurt,” said Minneapolis-based airline expert Terry Trippler. “They did a lot of business to and from Hawaii at fairly reasonable prices.”

ATA discontinued commercial service at Ronald Reagan Washington National, Washington Dulles International and Thurgood Marshall Baltimore-Washington International airports earlier this year.

Hawaiian Airlines, the state’s biggest, could emerge as the biggest winner. The carrier flies to nine cities on the mainland, including all four markets where ATA operated. It also controls a hefty share of inter-island traffic.

ATA left passengers on the islands and elsewhere stranded as it again headed for bankruptcy court. Virtually all the carrier’s more than 2,200 employees were laid off.

The carrier warned other airlines about its shutdown and asked them to help stranded passengers, spokesman Michael Freitag said.

Northwest Airlines Corp. said it will honor ATA tickets until May 3 for a $100 fee per leg of flights to and from Hawaii and Cancun, Mexico.

Southwest Airlines said it will honor any tickets issued to its own customers who were booked on an ATA flight, or will give them a refund. The company didn’t say what it would do for ATA customers who hadn’t booked a flight through Southwest. Southwest, the largest low-fare carrier, had invested $20 million in ATA to help it operate during bankruptcy. Southwest received ATA gates at Chicago’s Midway Airport and entered into a marketing alliance with ATA as part of its investment.

Southwest said yesterday that it would seek new partners for international flights because of ATA’s shutdown. Southwest had been arranging to begin flights to Mexico, Canada and the Caribbean next year under a marketing accord with ATA.

Dallas-based Southwest now flies only in the U.S. Service outside the country would have been done with ATA aircraft.

ATA last year carried more than 632,000 passengers to the islands from the mainland, more than all but three other domestic airlines.