Rottweiller
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American Airlines opposes ATA carrier sale
WASHINGTON (AP) — AMR, the parent of American Airlines, is objecting to the sale of ATA Airline's Chicago Express regional carrier assets because the new owner may not protect its interests in aircraft leases.
On Monday ATA Holdings entertained bids for Chicago Express, and a sale hearing is scheduled for Friday.
Chicago Express is a regional feeder carrier operating as ATA Connection and connecting small- and medium-sized cities with either Chicago-Midway or Indianapolis. The company has a non-unionized work force employing 400 people in Chicago and an additional 200 people in other cities in the Midwest.
American Airlines' interest in the sale stems from a lease agreement involving six Saab model 340B aircraft to ATA. Court papers said ATA in turn subleased the planes to Chicago Express.
American Airlines said in conversations with ATA lawyers and documents filed in the case that it appears ATA doesn't intend to continue its responsibilities under the lease, nor has the company indicated it will confer its responsibilities to the new owner of Chicago Express.
Court papers said American Airlines' parent wants any lapsed payments, missed maintenance requirements and insurance obligations to be settled before a sale can proceed.
On Tuesday ATA said in a press release that it received a "high level of interest" in the assets, and an auction will be held Thursday. Company spokeswoman Roxanne Butler declined to say how many bids were received.
As planned, Chicago Express stopped operations Monday. The company press release said that depending on the outcome of the auction, service could be restored to some of the carrier's nine routes "in the near future."
NatTel LLC attorney Aaron L. Hammer told Dow Jones Newswire Tuesday that prior to the shutdown, the creditor offered more than $1 million in cash for Chicago Express with the requirement that the deal close before it ceased operations.
Hammer has been aggressively arguing on NatTel's behalf to preserve Chicago Express as a going concern and save jobs, rather than ending its flights as ATA proposed.
ATA's decision to ground Chicago Express has put an end to NatTel's attempts to gain control of the carrier.
"From NatTel's perspective it is over," Hammer said. "We did what we could to try and save Chicago Express. Unfortunately the bankruptcy court approved a sale post shutdown. Once that determination was made, it was impossible for NatTel to get a transaction as a going concern."
ATA Holdings, which is the 10th-largest U.S. air carrier based on revenue passenger miles, filed for Chapter 11 protection in October 2004.
WASHINGTON (AP) — AMR, the parent of American Airlines, is objecting to the sale of ATA Airline's Chicago Express regional carrier assets because the new owner may not protect its interests in aircraft leases.
On Monday ATA Holdings entertained bids for Chicago Express, and a sale hearing is scheduled for Friday.
Chicago Express is a regional feeder carrier operating as ATA Connection and connecting small- and medium-sized cities with either Chicago-Midway or Indianapolis. The company has a non-unionized work force employing 400 people in Chicago and an additional 200 people in other cities in the Midwest.
American Airlines' interest in the sale stems from a lease agreement involving six Saab model 340B aircraft to ATA. Court papers said ATA in turn subleased the planes to Chicago Express.
American Airlines said in conversations with ATA lawyers and documents filed in the case that it appears ATA doesn't intend to continue its responsibilities under the lease, nor has the company indicated it will confer its responsibilities to the new owner of Chicago Express.
Court papers said American Airlines' parent wants any lapsed payments, missed maintenance requirements and insurance obligations to be settled before a sale can proceed.
On Tuesday ATA said in a press release that it received a "high level of interest" in the assets, and an auction will be held Thursday. Company spokeswoman Roxanne Butler declined to say how many bids were received.
As planned, Chicago Express stopped operations Monday. The company press release said that depending on the outcome of the auction, service could be restored to some of the carrier's nine routes "in the near future."
NatTel LLC attorney Aaron L. Hammer told Dow Jones Newswire Tuesday that prior to the shutdown, the creditor offered more than $1 million in cash for Chicago Express with the requirement that the deal close before it ceased operations.
Hammer has been aggressively arguing on NatTel's behalf to preserve Chicago Express as a going concern and save jobs, rather than ending its flights as ATA proposed.
ATA's decision to ground Chicago Express has put an end to NatTel's attempts to gain control of the carrier.
"From NatTel's perspective it is over," Hammer said. "We did what we could to try and save Chicago Express. Unfortunately the bankruptcy court approved a sale post shutdown. Once that determination was made, it was impossible for NatTel to get a transaction as a going concern."
ATA Holdings, which is the 10th-largest U.S. air carrier based on revenue passenger miles, filed for Chapter 11 protection in October 2004.
