What Happened To US Low-Cost Carrier ATA Airlines?

American Trans Air, better known as ATA Airlines, was an American low-cost airline that offered scheduled flights and charters. Headquartered in Indianapolis, Indiana, ATA Airlines operated throughout the United States mainland and the islands of Hawaii and Puerto Rico.

Established in February 1973 as Ambassador travel club, ATA Airlines’ first plane was a Boeing 720 named “Miss Indy.” In 1978 a second Boeing 720 arrived called “Spirit of Indiana.” In 1981, ATA Airlines acquired eight Boeing 707s for its charter operations and based them at Indianapolis International Airport (IND).


ATA Airlines flew charters for the United States military

In its early days, ATA airlines specialized in charter flights for the American military, flying servicemen wherever they needed to go around the globe from the following airports:

  • Chicago Midway International Airport (MDW)
  • Detroit Metropolitan Wayne County Airport (DTW)
  • Indianapolis International Airport (IND)
  • Milwaukee Mitchell International Airport (MKE)
  • New York John F. Kennedy International Airport (JFK)
  • Oakland International Airport (OAK)

In 1983, ATA Airlines got its first McDonnell Douglas DC-10 followed by a second widebody three-engined jet shortly afterward. In 1984 the airline replaced its aging Boeing 707s with Boeing 727s and added Lockheed L-1011 TriStars that used to belong to TWA and Delta Air Lines. A year later, Boeing 757-200s were added to the fleet before regularly scheduled flights began in 1986. The airline’s first scheduled passenger flight was from its home city of Indianapolis to Southwest Florida International Airport (RSW) in Fort Meyers, on Florida’s Gulf Coast .

The Gulf War

In 1991 during the Gulf War, also known as Operation Desert Storm, ATA Airlines flew 494 missions transporting around 108,000 military personnel. During Operation Iraqi Freedom in 2003, ATA Airlines was called upon again to transport American troops to the Middle East. The United States Department of Defense also chartered ATA Airlines L-1011 aircraft to fly military personnel and their families between Philadelphia International Airport (PHL) and the following overseas American bases:

  • Naval Air Station Sigonella (NSY) in Sicily, Italy.
  • Aviano Air Base (AVB) in northeastern Italy
  • Lajes Feild (TER) on Terceira Island in the Azores
  • Incirlik Air Base (UAB) in Adana, Turkey


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While still maintaining its close ties to the American military, by the mid-1990s ATA Airlines began to focus on leisure travel. using the slogan “On ATA, You’re on Vacation,” the airline built up a sizable hub at Chicago’s Midway Airport and began offering flights to the Caribbean, Mexico, and Hawaii.

ATA Airlines also began flying from Orlando International Airport (MCO) to London Gatwick Airport and Manchester Airport (MAN) twice a week. Most of the seats were reserved for a United Kingdom travel agency called “Travel City Direct”, a tour operator specializing in fly-drive vacations. All ATA Airlines flights between Florida and the United Kingdom stopped in Gander, Newfoundland, for refueling.


ATA Airlines starts to focus on leisure travel

In 2000, ATA Airlines placed an order with Boeing for 39 737-800s and 12 757-300s to expand its operations from Midway. The same year ATA Airlines began offering regularly scheduled flights to Mexico and was designated a major carrier by the United States Department of Transportation (USDT).

Following the 9/11 terrorist attacks in 2001 and the drastic decline in air travel plus the ill timing of the new Boeing deliveries, in 2004, ATA Airlines filed for Chapter 11 bankruptcy protection. After failing to reorganize, the airline shareholders of ATA Airlines stock lost all their money when the carrier was delisted from the NASDAQ stock exchange.

In 2005 the airline drastically reduced its flights and sold most of its gates at Chicago Midway to Southwest Airlines. Soon after that, distressed securities fund and some pre-bankruptcy carriers took the airline private after investing $100 million. In 2006, the airline exited bankruptcy protection as it continued to sell aircraft, including one of its new Boeing 737-800s.


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ATA Airlines blamed its demise on the loss of military contracts. Photo: US Archives

Blaming the loss of a long-term military contract and a massive increase in the cost of jet fuel, ATA Airlines declared bankruptcy for a second time, saying they did not have enough capital to stay in business. Following ATA Airlines’ demise, Southwest Airlines paid $7.5 million for all ATAs trademarks, logos, and operating certificates.


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