November 4, 2004 -- When ATA, the nation's tenth-largest airline, declared bankruptcy on October 26, they marked a nasty milestone: the first airline bankruptcy in two years that travelers actually have to worry about.
ATA (www.ata.com) isn't going out of business quite yet, but things don't look good. The airline has said that to cut costs, they're dropping many of their routes out of Chicago, and all of their flights from New York and Washington, D.C. Sort of.
The "sort of" comes thanks to an odd potential deal with AirTran (www.airtran.com), the Atlanta-based discount carrier. AirTran wants to buy ATA's Chicago gates and New York and DC routes to run them as AirTran flights with ATA codeshares. AirTran spokesman Tad Hutcheson put it clearly:
"If we are successful, we would operate a hub at Chicago Midway just as ATA did. We will operate our 717's and 737-700's out of Midway to 20 cities, just as ATA did. We will honor tickets and we are still working out codeshare details. There should be no interruption of service and it should be very transparent and seamless to the consumer. We hope it takes effect in early January."
In other words, you'd still be able to buy and fly on ATA tickets for those routes, the planes would just say "AirTran" on the side. AirTran would honor already-purchased ATA tickets on the new AirTran routes, too. Meanwhile, AirTran frequent fliers would get lots of new routes to choose from that don't force you to change planes in Atlanta.
All other ATA service would remain intact, including the airline's Indianapolis hub and its large and profitable charter and military services.
Sounds great, huh? It would be, if it were really happening.
But AirTran can't actually buy ATA's routes -- they need to request them from a bankruptcy judge, who has about 60 days to decide whether AirTran's offer is the best deal for ATA's creditors. If there are better offers, the ATA-AirTran deal may not go through at all.
Enter America West (www.americawest.com) as a possible spoiler. They told us they might try to buy some of ATA's routes -- but then again, they might not. If they start bidding, everything's up in the air -- they're not guaranteeing that they'll honor ATA's tickets or keep similar schedules to ATA's current routes.
Southwest (www.southwest.com), which had been making noise about entering the ATA dismemberment sweepstakes, disavowed such aims to us this week. They said that they will be expanding in Chicago, sure, but using existing gates and on existing routes. Meanwhile, Northwest (www.nwa.com) doesn't want to buy ATA but is looking to kill them by expanding aggressively in Indianapolis and displacing ATA from its remaining major hub.
Our advice: don't book anything on ATA right now, at least until the bankruptcy judge approves the airline's reorganization plan. If the AirTran/ATA deal goes through, reap the benefits by checking any fare for a shared route on both AirTran and ATA's sites -- you may find that they're competing even within the same plane. And stay updated by keeping an eye on www.restructuringata.com.
If you're currently holding ATA tickets, we're sorry to say you'll have to bite your nails for a little while longer. If the ATA/AirTran deal goes through, you're golden.
Otherwise, the Aviation and Transportation Security Act currently protects your tickets by commanding other airlines to carry you for $25 if they have space available, but that provision expires on Nov. 19. If it isn't renewed and if the ATA/AirTran deal falls through, hopefully you bought your tickets with a credit card -- the Fair Credit Billing Act will require the credit card company to refund your money. For now, let's cross our fingers and hope that ATA and AirTran can make this deal work.
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