ATA cuts jobs, reviews scheduled-service strategy

January 29, 2008
ATA Airlines is eliminating 30 positions at its Indianapolis headquarters while its Georgia-based parent considers options for its scheduled service business-including selling it in part or whole.

Steve Forsyth, spokesman for Peachtree City, Ga.-based Global Aero Logistics, confirmed the job cuts to IBJ today.

The cuts are due partly to rising fuel prices and decreases in scheduled service revenue. ATA will have about 650 employees based out of Indiana after the job cuts, according to Global Aero. The airline previously eliminated its aircraft maintenance operation here.

ATA once was the busiest carrier at Indianapolis International Airport but eliminated scheduled service here after completing its Chapter 11 bankruptcy reorganization plan two years ago. It still has charter flights out of Indianapolis.

Late last year, ATA parent Global Aero Logistics moved its headquarters to Georgia, home of World Airways, a charter carrier Global bought in 2007. It also picked up North American Airlines, another charter carrier, based in New York.

In a filing this month with the Securities and Exchange Commission, Global Aero noted continuing difficulties with several scheduled-service routes and said it continues "to explore strategic opportunities for our scheduled service business, including network restructuring, international expansion, business combinations and partial or complete divestitures."

Currently, ATA's scheduled service business revolves primarily around a code-sharing agreement with Dallas-based Southwest Airlines, flying to destinations such as Hawaii that Southwest does not serve with its own aircraft. An expanded code-share agreement recently signed with Southwest calls for ATA to fly international flights for the Dallas carrier in the next year or two.

ATA has been eliminating unprofitable routes, including those between its hub at Chicago's Midway Airport to New York and Washington, D.C.

In a Jan. 9 registration statement filed with the SEC, Global Aero said it is planning to sell up to $50 million of its shares in an offering open only to executives and certain employees. The stock is owned by MatlinPatterson, a New York buyout firm that acquired ATA out of Chapter 11.
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