Soaring US jet fuel bankrupts ATA Airlines

03 April 2008 18:37  [Source: ICIS news]

HOUSTON (ICIS news)--Soaring jet fuel prices and the loss of a charter contract from the US military drove ATA Airlines to file for protection under Chapter 11 of the US bankruptcy code, the company said on Thursday.

The Indianapolis-based discount carrier ceased all operations, ATA said in a statement. The filing took place on Wednesday and was announced today.

“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,” chief operating officer David Yakola said.

“These are the kinds of results we see driven by unusually high fuel prices,” airline-industry trade group Air Transport Association communications vice president David Castelveter said. The ATA trade group is not the same as ATA airlines.

Jet fuel prices have increased nearly 75% in the last 12 months. Spot prices in the US Gulf Coast region were floating around 180.00 cents/gal at this time last year, according to global chemical market intelligence service ICIS pricing. As of 2 April, USG spot prices were 314.00-314.25 cents/gal.

The announcement came on the heels of turbulence in the US airline industry, including fleet safety issues, merger and acquisition (M&A) talk as well as other carriers filing for bankruptcy.

($1=€0.64)

By: Steven McGinn
+1 713 525 2653

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