The airline said that it made the decision to do so after FedEx informed the airline that it would no longer be a member of a “teaming arrangement.” This agreement gave ATA a large number of airlift contracts for transporting military personnel and their families to destinations overseas.
This one agreement had apparently made up the bulk of ATA’s charter operations.
Global Aero Logistics and its other subsidiaries, World Airways and North American, will continue to operate as normal.
Interestingly, the ATA website was down for a time last night, and we had seen a number of emails suggesting that perhaps the airline was getting ready to shut down. But after about an hour or so, the site popped back up again, and was again taking reservations.
So much for that great Southwest codeshare idea.
Speaking of, in a research note this morning analyst Gary Chase tackled the impact this shutdown will have on Southwest, as he wrote,
“With ATA’s discontinuation of service, LUV loses both near-term code
share revenue as well as a future partner for its international code
share efforts. LUV disclosed ~$14mm in code share revenue for 3Q07,
or ~$40-50mm on an annualized basis. Based on DOT data, we believe
that only 35% of revenue was coming from Hawaii service (although the
mix likely shifted more towards Hawaii in recent months), with the
remainder coming from Chicago service to business markets such as New
York LaGuardia, Washington National and Dallas-Ft/Worth. With the end
of Chicago service, LUV was likely to see a meaningful reduction in
ATA code share revenue prior to its ending service. Over the
longer-term, LUV will now need to find alternative code share partners
for its near-international efforts in 2009.”