ATA Bankruptcy

ATA is an airline company that filed for bankruptcy after the company encountered various problems. The high cost of fuel coupled with the unexpected loss of key chartered flights, pushed the carrier into the bankruptcy corner. It has filed for bankruptcy twice already in a span of just over three years.

The company filed under chapter 11. Under this chapter, a company or business seeks to reorganize itself while it remains in operation. When they filed for bankruptcy, company stopped all operations and canceled all current and future flights. The company claimed that the reason for filing bankruptcy was due to the loss of key military charter flight contracts.

After coming out of the first bankruptcy in 2006, the company decided to concentrate on increasing its military charter business. It had over 2,200 employees and they lost their jobs. Also on the losing end were ticket holders. They were advised to seek alternative means of travel, as ATA would not be in a position to honor tickets. The travelers, who had purchased their tickets using their credit cards, were requested to contact their credit card company or travel agency so that they could obtain a refund.

Customers were also advised that if they had purchased tickets from ATA offices that they would not get a refund. The only way, they could get their part or all their money back for their utilized tickets they would have to submit a claim in ATA’ s Chapter 11 proceedings.


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