A federal judge on Monday cleared the way for ATA Airlines and its parent company ATA Holdings Corp., to emerge from bankruptcy after more than 14 months of federal financial protection.
The Indianapolis-based carrier is expected on Tuesday to formally announce the date it will emerge after final paperwork is filed, said attorney James Carr, who represented ATA in federal bankruptcy court.
U.S. Bankruptcy Court Judge Basil H. Lorch III, who approved the reorganization plan pending final paperwork, said he thinks the carrier will be in a good financial position this spring.
"I don't see any indication we won't be dealing with a solvent entity in April," he said during Monday's three-hour court hearing.
Throughout its restructuring process, 33-year-old ATA has slashed routes and discontinued service to nearly a dozen cities. In November, executives announced the carrier was ending service to its home city in Indianapolis. ATA's hub is at Chicago's Midway airport.
If the final plan is approved, it would be "a watershed moment for ATA," spokeswoman Michelle Foley said.
During the first 11 months of 2005, ATA lost $75.7 million on revenue of $1.02 billion. In November, the carrier had nearly $427 million in assets and $1.5 billion in debt, according to filings with the U.S. Securities and Exchange Commission.
ATA has about 3,000 full-time employees, down from 7,000 in October 2004, SEC filings show.
The airline has also cut the number of jets from 60 to about 30.
But the carrier hinted at its new business model last week when it announced it was adding service to four cities and increasing flights to Hawaii.
ATA was founded in 1973, flying charter trips to leisure destinations. After becoming a passenger carrier in the 1980s, the airline grew to be the nation's 10th largest carrier before filing for bankruptcy in October 2004 to seek protection from more than 1,000 creditors.
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