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ATA AIRLINES PULLS THE PLUG

Bankruptcy halts service, reducing LV-Hawaii routes

The sudden bankruptcy of ATA Airlines on Thursday left passengers in the lurch and disrupted service from Las Vegas to Hawaii, the second time this week a Hawaii-focused airline abruptly stopped flying.

The shutdowns by Indianapolis-based ATA and Hawaii-based Aloha Airlines will reduce direct, scheduled service between Las Vegas and the islands as much as 40 percent, according to passenger records from McCarran International Airport.


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  • The bankruptcies won't stop charter flights Boyd Gaming Corp., uses to import more than 70,000 gamblers annually to its downtown Las Vegas casinos.

    But they will make it harder -- and probably more expensive -- to book scheduled service between the destinations.

    Hawaiian Airlines, the largest direct service provider between Las Vegas and Hawaii with more than 360,000 passenger arrivals and departures annually, remains intact.

    It is the second bankruptcy in three years for ATA, once the nation's 10th-largest carrier.

    In a statement, airline officials said ATA was unable to absorb the loss of a charter contract largely because of the high cost of fuel.

    "It's basically a disaster," said travel observer Joe Brancatelli, who writes travel tips at the Web site www.joesentme.com.

    The abrupt cancellations of flights interrupted vacations, disrupted business trips and made life difficult for people who needed to get to Hawaii.

    "I was supposed to get to work tomorrow, so, it sucks," said Fainga Koli, 28, a construction worker from Las Vegas.

    Koli showed up at McCarran for a 3 p.m. flight only to be handed a list of airlines instead of a boarding pass. He started calling airlines from his mobile phone hoping to find an alternate flight.

    "I don't know, I might have to pay more," Koli said.

    In addition to charters, the airline operated about 50 commercial flights daily, mostly between Hawaii and Las Vegas; Oakland, Calif.; Phoenix and Los Angeles.

    Harvey and Charlotte Peltz, a senior citizen couple from Honolulu, arrived in Las Vegas on Tuesday, their last stop after spending more than a month on the mainland.

    "They can't get us out until Tuesday," Charlotte said of one option.

    The couple was hurrying off to another terminal to try and catch a flight on Hawaiian Airlines. In addition to their tickets, they had a $400 ATA travel voucher they assumed would be worthless.

    "We just lost that," Harvey said, adding that he wondered how the airline could pack up its service so abruptly.

    He'd heard the news ATA lost a big contract with FedEx Corp. for military charters but was surprised just how dependent the airline had been on such a deal.

    "They lose the contract one day and go bankrupt the next," he said. "They were living paycheck-to-paycheck."

    Brancatelli said it is unlikely other carriers will swoop in and pick up the passengers ATA and Aloha left behind, either.

    That's because flights to popular leisure destinations such as Hawaii and Las Vegas are often less profitable for airlines than business routes.

    "The profit motive for airlines is against it because so many travelers want to fly to Hawaii and Las Vegas for free using frequent-flier miles," he said.

    The ramifications of worse service to Hawaii could be significant for Las Vegas.

    More than 500,000 Las Vegas visitors annually come from Hawaii, making it the 10th largest source state for the market, behind Michigan and ahead of Pennsylvania, according to the latest-available figures from the Las Vegas Convention and Visitors Authority.

    People will still be able to fly between Las Vegas and Hawaii, but it may get more expensive and less convenient.

    Southwest Airlines, a code-share partner with ATA, is already working to reschedule passengers who booked flights on the defunct airline via Southwest.

    But Southwest doesn't have the proper certification to fly its own planes to Hawaii so it can't take passengers directly.

    "We are finding the best travel replacement that we can," Southwest spokeswoman Brandy King said. "If that isn't satisfactory for the customer, we are offering a full refund for their ticket."

    Airline analyst Jim Corridore of Standard & Poor's said he doesn't think there are any more major airlines on the brink of bankruptcy. But he said problems at ATA are a sign of tough times for the industry.

    "I think that they will certainly be weakened and unable to offset higher oil with higher revenues," Corridore said.

    Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or (702) 477-3861. The Associated Press contributed to this report.

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    Report abuse

    D wrote on April 04, 2008 06:36 PM: brad:
    All of this is Bush and cheney's fault?
    The presidential positions are not that powerful. History may repeat itself thru economic cycles.
    If more people had a better education, then maybe they would understand this.


    Report abuse

    Brad L. wrote on April 04, 2008 03:21 PM: And they say History never repeats.

    6 1/2 years ago, this same exact thing (bankruptcy from high fuel prices and this abomination they call a 'war to protect the American people) is what caused National Airlines to go under. This makes *5* airlines in a week: Aloha. ATA. Big Sky. Champion. Alitalia. Sun Country is furloughing 30% of their pilots because of fuel prices, and it's only going to get worse.

    I'm still glad I didn't vote for Bush/Cheney in '00 and '04. And it's so hilarious now that people who did and thought they was right were proven that they were wrong. Have to love about-faces.


    Report abuse

    Mr Steep wrote on April 04, 2008 12:20 PM: Airlines.banks,savings and loans,mortgage companies,steel,autos....you want more examples?? They all go belly up because of greed and mismanagement. Top execs walk with millions and the working stiff walks with buptkes. The banks that made billions with the subprime mortgages said: Let's get our money now and let others clean up the mess. I love this country!


    Report abuse

    Chris wrote on April 04, 2008 11:18 AM: Perhaps the loss of some airlines will allow others to open their eyes. I make every attempt to NOT fly an american carrier when I fly internationally. The service of US carriers is pathetic compared to the service provided by carriers in other countries.


    Report abuse

    Edwin L. wrote on April 04, 2008 10:21 AM: My last ATA flight to Hawaii was a total disaster, with the outbound flight delayed 9 hours for a defective part. Arrived at 3am, slept in the airport until the buses started running (no taxi's in paradise at 3am) , caught a bad case of pneumonia the next day, return flight was a packed-full cacaphony of crying babies and small children.

    But I did get a voucher for another trip. Never used it, now I lost it. For the best, I guess.


    Report abuse

    George wrote on April 04, 2008 10:20 AM: This is very bad for the Vegas economy.

    Even if Hawaiian Airlines adds flights to make up for the loss of ATA and Aloha, the number of visitors will surely drop from the 500,000 per annum level. Less competition means higher ticket prices which means fewer people coming from Hawaii.

    Hopefully, some non-Hawaiian affiliated carriers will come in and buy ATA and Aloha's slots and gates in Hawaii and LAS to keep prices competitive. But from what we've seen from other airline bankruptcies, that's probably not going to happen unless some entity (like maybe the LVCVA) steps in and offers financial inducements to competitors to step in and bid on the gates.


    Report abuse

    RussBBinVegas@aol.com wrote on April 04, 2008 09:46 AM: LOL. You're absolutely right, Mark$. America can vote in war-mongers like Bush Cheney & McCain till we're blue in the face, and send our trillion-dollar Keystone Kop military to go attack Iran & Venezuela & every last recalcitrant nation that has oil, but the price is NEVER going to go back down. Haha, we only had 30 years to plan for this moment, but just because we have the smartest BOMBS doesn't mean we are the smartest PEOPLE.


    Report abuse

    Mark$ wrote on April 04, 2008 09:02 AM: Funny isn't it. Airlines going belly up is the perfect example! The American public is in total denial about what higher oil costs are going to do to our way of living. People still call the airlines looking for cheapo flights for their la-dee-dah vacations to Hawaii & Vegas. The masses insist that we as a culture should still live our greedy consumerist ways: 5% of the world (Americans) consuming 25% of the planet's resources (oil). Hey folks, party's over. Vegas you better start the belt-tightening ..