Flying to Hawaii may get more expensive for Southern California travelers.
Low-fare carrier ATA Airlines Inc. said today it has filed for Bankruptcy Court protection, grounding all flights as it halted operations. Thousands of passengers were stranded at Los Angeles International Airport and other terminals.
The Indianapolis-based airline became the second U.S. carrier this week to end passenger service. On Monday, Aloha Airlines ended passenger service, grounding the only carrier offering nonstop flights from Orange County to Hawaii.
Joe Brancatelli, a business travel consultant, said that the loss of ATA service coupled with the closure of Aloha Airlines "is going to create a real crisis" in the availability of flight options for travel to and from Hawaii in the upcoming months.
ATA operated 44 flights a day, including eight at Oakland Airport and three at LAX, two of which flew to Honolulu and the other to Kahului.
"We deeply regret the disruption and hardship caused by the sudden shutdown of ATA, an outcome we and our employees had worked very hard and made many sacrifices to avoid," said Doug Yakola, the airlines chief operating officer said in a statement.
The company said it filed for bankruptcy protection late Wednesday.
But while the latest bankruptcy filings are likely to impact flights to Hawaii, it is not expected to be a harbinger of any broader airline woes. Though the industry is likely to post a loss this year, most carriers are expected to survive the high fuel costs and a slump in air travel with the slowing economy.
"Our conclusion is that the network carriers and most of the low-cost carriers will survive the weak economic environment and high fuel prices over the next two years," Ray Neidle, an airlines analyst for Calyon Securities, said in a report to investors.
For its part, ATA said in a statement that it was forced to ground operations because it lost a key military charter contract. In addition to scheduled airline service, ATA also provided charter service for the Pentagon.
The airline said its operations had depended on revenue generated from its military business to offset a "tremendous spike" in prices for jet fuel.
ATA said passengers should seek alternative travel arrangements on their own. Those who paid by credit card should call their credit-card provider to seek refunds. Those who paid by cash may be able to recover some of the cash by submitting a claim with the bankruptcy court.
Southwest Airlines said its passengers, who purchased ATA tickets through the airlines code-share arrangement, can rebook or receive a refund.