The chief executive officer of ATA Airlines’ parent company, Global Aero Logistics, has resigned, according to the Peachtree City, Ga., company.
Subodh Karnik, who previously was CEO of Indianapolis-based ATA, was under pressure from New York investment firm MatlinPatterson to make ATA and its two sister carriers profitable.
Global Aero’s most recently reported financials show a net loss of $53.4 million in the nine months ended Sept. 30. Much of the pressure has come on the scheduled service side of the business consisting of ATA, particularly as jet fuel prices soar.
Global Aero would not elaborate on details of Karnik’s departure.
MatlinPatterson bought ATA out of Chapter 11 bankruptcy about three years ago. Last year, it bought Peachtree City -based charter carrier World Airways and New York-based charter company North American Airlines. Karnik moved Global Aero’s headquarters from Indianapolis to Georgia late last year.
ATA, which once had more than 2,300 Indianapolis- based employees, now has fewer than 600 here.
Karnik, a former Delta Air Lines executive, has been replaced temporarily by Global Aero’s chairman, John Denison.
Denison was president and CEO of ATA from February 2005 to December 2006.
Denison had been chief financial officer of Southwest Airlines prior to retiring from the Dallas carrier.
Last week, Global Aero announced ATA was eliminating all scheduled service from its Chicago Midway hub. ATA ended scheduled service from Indianapolis about two years ago and continues to fly scheduled service on the West Coast and to Hawaii under an agreement with Southwest Airlines.
In a regulatory filing inJanuary, Global Aero disclosed it may discontinue all scheduled service and focus on charter, which as of late 2006 amounted to 62 percent of its $1.6 billion in revenue. The Air Line Pilots Association has warned that more job losses are likely at ATA, particularly if the company spins off Hawaii flights to another carrier. Some pilots complain ATA aircraft are being integrated with World Airways, in violation of their labor agreement with the carrier, and that ATA is becoming a shell of a company whose days are numbered.