Aviation News

October 24, 2010

Ghost of ATA Avenges FedEx Contract Breach Which Put Airline Out of Business

More articles by »
Written by: admin
Tags: , ,
ATA 737-300 N401TZ Chicago Midway

The remnants of ATA Airlines won a $66 million verdict against FedEx in a federal suit over the breach of contract that forced the company into bankruptcy.

The suit stemmed from a contract ATA held to operate military personnel transport flights as a subcontractor of FedEx. FedEx, which was one of three civilian contractors managing the Pentagon’s war transport movements, abruptly booted ATA from the program in April 2008. Because these charter flights formed the backbone of ATA’s operating revenue—worth up to $400 million a year—the airline was forced to halt operations and file for bankruptcy shortly thereafter.

ATA’s complaint stated that FedEx had breached its contract when it discontinued its relationship with ATA. Jurors agreed, and awarded the amount based on estimated lost profits.

FedEx is expected to appeal the decision, but should ATA prevail, the funds will be distributed to the airline’s lengthy list of creditors.

ATA halted operations during one of the most brutal weeks in aviation business history, in which three other carriers—Aloha Airlines, Champion Air and Skybus Airlines—also folded.

Southwest Airlines purchased ATA’s operating certificate and non-aircraft assets in November 2008, mostly for access to the 14 slots ATA held at LaGuardia Airport in New York.

About the Author




Orbis Unveils Its New Flying Eye Hospital

Orbis International recently unveiled its third generation Flying Eye Hospital, an MD-10, with which it will continue its efforts to fight preventable blindness around the world.
by Gabe Andino


Flying in Cargo Class: The Anatomy of an Air Freighter

As an airliner flies by, cargo and passenger jets look virtually the same.. Inside a freighter, though, it's an entirely different experience.
by Ken Hoke



The Post-Deregulation Skies: The Plucky Upstarts

The recent trend of airline consolidation has taken away the large variety of airlines we've grown accustomed to seeing over the years. We take a look back at some of the more notable start-up airlines and how they've shaped to...
by Gabe Andino


Donated FedEx Boeing 727 Arrives In Ft. Lauderdale

NYCAviation was on hand as FedEx Express handed over one of their retired 727-200s to Broward County, FL for use as a trainer.
by Mark Lawrence

The Riverside Fire Department provides a water arch for the arrival of the Boeing 727-200 (N266FE) that FedEx Express donated to California Baptist University for the school's new aviation science program. The arch represented a symbolic salute on the conclusion of more than 32 years of commercial aviation service by the newly retired aircraft. (Photo by PRNewsFoto/California Baptist University, Kathie Chute)

A FedEx 727 Retires To Life As College Laboratory

A FedEx Boeing 727-200F concluded its 33-year career last week and joined the faculty of California Baptist University.
by admin


  • Anonymous

    ATA is not the only operator to foolishly throw all its eggs in the FedEx basket., see Reliant Airlines which operated ad hoc for the FX World Hub.