It Continues to be the Economy, Stupid. ATA in Mothballs.

Lalita Amos | 04/03/2008 - 18:22

The airlines are clearly struggling. House members are trying to figure out how Southwest Airlines could have for so long violated safety rules and how the FAA, the agency responsible for oversight, could have missed these safety violations. Planes have been flying with cracked fusilages (one of which cracked open in the 1980's, sucking a flight attendant out of the plane to her death), inspectors being told to "hush up" missed inspections of fusilages and rudder systems...

Horrible.

Now ATA, like many other low cost airlines like Aloha which pulled up stakes, are shutting their doors. As fuel prices keep going up and discretionary travel is drying up, the smaller players are going to continue to disappear, either filing bankruptcy or being absorbed by other businesses. Even the bigger players are feeling the pinch, particularly with domestic flights (they make more money from international flights). Fewer flights, more crowding and higher fares. What an unholy mix.

Planes on the Chicago tarmac, by Frank Polich of Reuters

This from MSNBC on ATA's collapse:

ATA Airlines shut down operations and stranded thousands of travelers Thursday when an unexpected loss of key charter flights and soaring fuel costs forced the carrier into bankruptcy.

Once the nation’s 10th-largest air carrier, ATA entered bankruptcy for the second time in just over three years. The company had more than 2,200 employees, and “virtually all” were told that their jobs were gone, company spokesman Michael Freitag said.

Many passengers learned of the collapse at ticket counters, where advisories were posted in the handful of cities ATA still served. About 10,000 passengers flew ATA each day before operations were shut down, according to the airline.

Oh, and while I was tapping out this post, I read a report on NPR which extolled the failures of the newly revamped Heathrow Airport in London in doing the little things--say, like keeping track of baggage. Turns out they're having to send the mountain of misplaced luggage to Italy to be sorted and processed.

(sigh)

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varangianguard | 04/08/2008 - 14:42 | It appears that

Skyway and Aloha folded recently as well. Somebody used the phrase "free fall". Ouch.

varangianguard | 04/07/2008 - 16:01 | News?

The only things I've heard is recent startup Skybus (Columbus, OH) ceased operations last Friday, and Alitalia is considering some kind of reorganizational bankruptcy.

I know two people who got stranded in Ft. Lauderdale by Skybus over the weekend. They are driving home.

Lalita Amos | 04/07/2008 - 15:28 | Heard There Were Several More Going Under

Varianguard,

Heard this morning that a couple of additional airlines were going under (here and, I think, in the UK--though I couldn't get the toothbrush out of my mouth and find paper in time to scribble it down).

I just wonder what the airline industry would look like today (post 9/11 and all) if it weren't so heavily and nonsensically regulated).

________
Lalita L. Amos, CRC
http://www.totalteamsolutions.com
http://totalteam.blogspot.com

varangianguard | 04/07/2008 - 15:08 | There was a golden time for airlines

when the Federal government "regulated" (i.e., made up fares out of total ignorance) prices. Where else could essentially a clerk make twice (or better) the going minimum wage?

The "downside"? Airlines had to fly only where they were told they could. Medium and smaller cities actually had air service from either TWA, United, American, Eastern, et al.

Some of the "majors" still have workers who benefit from this artificial model that airlines were allowed to operate under. It's really killing them now. Look no further than Delta.

Ray Miller | 04/04/2008 - 12:13 | Airlines - NEVER a good business

Too many people forget the origins of commerical aviation.

Before anti-trust rulings airlines were merely a side business.

In the beginning one corporation made airplanes, airplane engines AND owned the airline.

IT was kind of a give away. You needed the airline to justify making the planes and the engines. They were creating their own market for highly profittable products.

After deregulation airlines actually had to make money.

The rest as they say is history..................

Remember Pan Am?
Remember TWA?
Allegheny?
etc.
etc.

Now ATA and more to come............

The never ending cycle of airlines being bad busines models.

I believe it was Mr. Branson who said, "Do you know how to become a multi millionaire in the airline industry? Start with a few billion dollars".................