Friday, April 04, 2008

ATA Blames FedEx For Collapse

ATA officials tell the Star's Ted Evanoff they were left with no other choice than to file bankruptcy and close after FedEx decided to end the company's participation in FedEx's lucrative military contract transporting U.S. troops. Evanoff writes, in part:

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.


Sir Hailstone said...

Ironic, innit?

Airlines have gone away before. Pan Am (twice now), Eastern, Braniff (Believe it!), and even Hooters.

Survival of the fittest.

indyernie said...

I wonder how long it will take before some liberals blame this on the Daniels or Bush Administration?

jabberdoodle said...

FedEx runs off government largesse constantly. In Indianapolis in recent years alone, there was the rerouting of I-70 to accommodate the latest expansion of FedEx's building - to the tune of $10 million. I-70 was also lowered into the ground so that some day in the future there can be an at-grade 'bridge' for FedEx planes to taxi between their facilities and a 3rd runway that would be built to provide for their needs. The third runway will displace hundreds of people from their homes.

In addition, the airport shelters much of FedEx's operation from our beloved property taxes by : a) paying for and building the expansions and leasing back to FedEx b) on airport owned land and c) even paying for and installing the sorting equipment and leasing that back to FedEx.

None of this gets an accounting so we, the public that pays for this corporate welfare, cannot tell which is a bigger boondoggle for Indianapolis tax payers -- FedEx or the new stadium.

It would seem that FedEx could afford to share a pittance of the government contract with ATA, just to keep it afloat.

Greed is good.

Wilson46201 said...

Congressman André Carson:

Wilson46201 said...

more Congressman André Carson

Unknown said...

FedEx runs off government largesse constantly.

Well, Fedex has GIVEN millions of dollars of free air service to the US Government. Remember Operation Desert Storm in 1991? Remember just how fast the US was able to get those supplies of materials and bombs into the theatre of war? Fedex transported most of those materials -- at no cost to the government.

Sometimes corporate welfare is nothing more than payback

Unknown said...

Hinzsight-- You are not telling the truth!FedEx was well paid for their Desert Storm flights.I hauled a good percentage of that freight and FedEx was well paid for it.