Because travel sucks ... now more than ever.

ATA on (permanent) vacation

Thu, 2008/04/03 - 10:49 by aargh

Two days too late for an April Fool's prank...

ATA has ceased operations to file for chapter 11 bankruptcy proceedings. Effective immediately. If you held any ATA tickets or, better still, jobs, you're out of luck. The low-cost airline cites loss of a key government contract as the reason for the shutdown. ATA claims that they were "not in a position to provide [their] customers or others with advance notice."


Admittedly, I'll hardly miss ATA. Aside from their cheesy "you're on vacation" jingle set to music reminiscent of Jimmy Buffet, my ATA experience boils down to one or two occasions in which they had the best last-minute fare. Nonetheless the sudden demise of any air carrier raises questions:

What will the stranded passengers do? It's tough enough when you're all set to hit the road and your outbound flight is cancelled. Now consider the folks who were heading back home today. Will they take a bus, train, or maybe try to purchase a seat on another airline? Maybe they'll follow the Virgin legend, which claims that Sir Richard Branson launched his airline by chartering a plane to rescue himself and his fellow passengers from a cancelled flight.

What will happen to the former ATA staff? In most businesses, employees see gathering storm clouds followed by some form of shutdown proceedings. The warning signs give them time to shop around for new jobs. Compare that to a sudden closing, which puts a large number of people (a couple thousand according to reports) on the job market at the same time. Chaos and intense competition, to the employees' detriment, are likely to follow.

How the hell did this happen? Was the airline really hanging by the thread of a single revenue stream? This is not uncommon in small, young businesses that are still trying to grow and it's part of entreprenurial darwinism. By comparison, ATA had been around for more than three decades. How many ATA insiders were aware of the risks that, minus this one contract, they wouldn't even have time for a proper wind-down?

What's next for the travel industry? Will other low-cost carriers beef up to take on ATA's traffic? Perhaps one of the larger airlines will make a move to absorb ATA customers and staff, maybe even buy out ATA? Will long-distance bus and rail services experience a mild increase in ticket sales? There are opportunities here for someone to fill ATA's crater.

Enough of my ranting. Here's a question for you:

What would you do if your preferred airline were to suddenly go belly-up?

Relevant links:

"ATA Airlines files for bankruptcy"

"ATA Files for Bankruptcy"

"ATA Airlines files for bankruptcy and shuts down"