Staggered by a broken deal with cargo hauler FedEx, ATA Airlines suddenly grounded its fleet of 29 jet airplanes Thursday and closed forever, idling 560 employees in Indianapolis and ending a 35-year run as the hometown air carrier .
The decision to liquidate the entire 2,300-employee company, announced at 4 a.m. Thursday by ATA owner Global Aero Logistics, stranded U.S. troops and their dependents on one flight and stunned employees who had stood by ATA through the
previous 16-month bankruptcy . . .
In an affidavit filed with the court Thursday, Turoff disclosed that ATA entered 2008 negotiating with five undisclosed potential suitors to step in and buy what appear to be parts or the entire airline. In January, those talks apparently fizzled after FedEx told ATA it was not going to be included in the next Pentagon charter contract.
FedEx manages the $1 billion troop- and cargo-hauling contract for the Pentagon's Military Airlift Command under an arrangement that rotates worldwide military flights among a specific group of lines: ATA, FedEx, Northwest Airlines and two smaller carriers, Atlas and Polar. Turoff was a director of an Atlas subsidiary from 2003 to 2006.
Exactly why FedEx canceled ATA's service was unclear Thursday. Under the contract, ATA would have flown troop charters through September. ATA was dropped from the next 12-month contract, set to begin Oct. 1.
Officials at FedEx "have not explained why they pulled the plug, not to ATA's satisfaction,'' said ATA spokesman Michael Freitag, a partner in Kekst & Co., a New York public relations company retained by ATA during the bankruptcy.
FedEx declined to comment Thursday.
In 2006, Indianapolis agreed to make more than $50 million in improvements at the Indianapolis International Airport to accommodate an expansion for FedEx, which promised to add nearly 800 jobs at the time. At least 560 ATA employees lost their jobs locally with the closure of Indianapolis' first and only locally-based airline.