ATA Bankruptcy Hits Pilots, Families Hard

The phone rang at 9 a.m. on April 3. It was my mother informing me that she had seen on the news that ATA Airlines had filed for bankruptcy and was ceasing all operations. I turned to my husband, an ATA pilot on the Boeing 757, and told him the news. He said nothing, but I quickly tuned into CNN news channel for more information. That's how I found out our future was going to change drastically.

According to its website, the pilot union, Airline Pilots Association Int'l, was notified the same morning at approximately 4 a.m. Central time that ATA Airlines was filing for bankruptcy and shutting down all operations immediately. The low-cost, charter airline based in Indianapolis, Indiana, claimed the "sudden shutdown" was the result of rising fuel prices, poor economic conditions and financial problems following a loss of a key military charter contract.

Our family was doubly hit; my husband's brother-in-law was also a pilot on the B-757 for ATA. My husband spent the day on the phone and online with other pilots gathering information. The pilots had heard various rumors running the gamut of speculations regarding the state of their jobs, but certainly never expected such behavior from a company they had so sacrificed for.

On April 2, strange amounts were showing in their bank accounts with no explanation at all. Then in the cover of night on April 3, the management declared ATA was out of business. No severance packages were offered, insurance was immediately canceled, employees on trips were left to wonder how they would return home and questions about vacation time and sick time that had been accrued are left unanswered.

"By shutting down in the middle of the night, this management group has let down its loyal customers and the flight crews, cabin crews, mechanics, and other employees who have made deep sacrifices over the past few years to keep ATA afloat," Capt. Steve Staples, chairman of the ATA unit of ALPA, told a group of reporters and confused pilots. "By shutting down in the middle of the night, this management group has let down its loyal customers and the flight crews, cabin crews, mechanics, and other employees who have made deep sacrifices over the past few years to keep ATA afloat and illustrates the ruthlessness of Wall Street hedge fund managers who have no knowledge or interest in the companies they own."

ATA's customers and employees had absolutely no warning that the airline was going out of business. The last flight was ATA Flight 4586, a morning red-eye from Honolulu to Phoenix. Crews were stripped of their airline privileges of jump-seating on other airlines. My husband knew several pilots and crews that were left stranded all around the world; some were ferried back to the States, but still far from home had to pay for their own mode of transportation. Some friends were vacationing in Hawaii were left stranded and paid $2,000 to return home.

The company will not give refunds to ticket-holding customers who paid with cash or check; and is telling those who paid with charge cards to contact their charge card company for a refund. Passengers were left stranded in various airports with no explanation or help in rerouting themselves.

The April 3 announcement of ceasing operations was two days shy of the first anniversary of ATA's announcement that its holding company was purchasing World Airways and North American Airlines. On April 5, 2007, ATA Holdings changed its name to Global Aero Logistics (GAL) and in August 2007 completed the transaction that gave it three airlines: ATA, World, and North American. GAL is privately held by the hedge fund Matlin Patterson Global Opportunities Partners II.

"Since when does the acquiring airline go out of business while the acquired airlines keep flying?" my husband and many other pilots asked.

According to the ATA Website, ATA Airlines was founded in 1973 and became a successful charter airline for several decades and known for its unequaled "round the world" charter, the ultimate in luxury and experience. After a change in management, expansion into scheduled routes, new jets, and more employees, ATA served major business centers including Chicago, Dallas and Oakland as well as popular vacation spots throughout the United States including Hawaii, Los Angeles, Phoenix, and Las Vegas. The airline also operated as a leading carrier for the U. S. military.

My husband had dreamed of being a pilot since he was a small boy. He loved flying for ATA and enjoyed his adventures all around the world. Now he just has memories and photos of places like Kuwait, Pompeii, Frankfurt, Shannon, Budapest and more. He was on the runway when 9-11 happened and spent five days in Chicago before being one of the first airliners into New York. The photos he took from the cockpit are amazing.

There is an incredible camaraderie, a brotherhood of sort, among these pilots. In this time, they are pulling together via the phone and computer for moral support and networking. They all agree that they truly enjoyed their job but disliked the direction management was taking the company. ATA employees are the ultimate victims of a series of incompetent managers who chose to blame economic conditions for the airline's problems instead of admitting their own mistakes.

Over the years, I've seen the emails, letters, reports and minutes from meetings; management painted a successful picture when, in reality, money was being lost. At one point, the airline filed for bankruptcy and positions in the ranks of employees were restructured. Many were laid off while others were given reduced positions with huge pay cuts. My husband went from being a Captain to First Officer and took a 50% pay cut. Everyone hoped the management team would pull together and see what a success the airline could be.

"We were telling management two years ago that they needed to institute a fuel management program, and even found a fuel consultant who offered to work with the company - but our overtures to help ATA reduce its fuel costs were repeatedly ignored," Staples told the pilots. "Management decided to outsource virtually all of our maintenance, and then acquired elderly, unreliable DC-10s that needed extensive repairs. The ripple effect of years of poor management decisions - not the current economy - was what doomed ATA."

Part of ATA's fleet has been transferred to World Airways and more airplanes could go to World and North American later. My husband and many others don't understand why just ATA was affected and not the two companies it purchased.

"Our position is that we are pilots of Global Aero Logistics, which is still operating, and we deserve to be in the cockpits of Global's airliners. Our contract says that the pilots go with the airplanes, and we will use every legal means available to us to ensure that our members' rights are protected," is what the voice of the pilot group is saying.

It is believed ATA knew of its decision to cease operation long before the announcement. They are all working with ALPA as well as on their own to see what legal means they have to bring justification.

At the time of shutdown, ATA operated 29 aircraft including Boeing 737's, 757's, DC10's and Lockheed L1011's. ATA employed approximately 2,230 people, including approximately 600 pilots, more than 800 flight attendants and more than 100 mechanics. These employees and their families are now without an income and medical insurance, as well as full of many unanswered questions and the feeling of despair.

Founded in 1931, ALPA is the world's largest pilots' union. Visit the ALPA web site at http://www.alpa.org for the latest information.