ATA out of Midway??

[Horace Horsecollar]

Originally posted by dislvr75
It troubles me thought that they are still taking reservations and selling tickets to perhaps unsuspecting people. I know that despite the rumors,they are still "operating", the question is for how much longer?

What should ATA do? Stop selling tickets?

Should US Airways and Delta and United and American also stop selling tickets? They're all in financial trouble too.

ATA is running through dwindling cash reserves at an alarming rate, which would lead to insolvency for ATA some time next year if the trend continues. But nobody wants to see ATA go under -- not the employees, not the aircraft leasing companies, not the lenders, and certainly not ATA founder and boss J. George Mikelsons, who owns over 70% of ATA's outstanding stock. In fact, Mikelsons undoubtedly even wants to avoid court protection from creditors because Chapter 11 would wipe out his stake in the company.

ATA needs to fix their problems, which will be difficult. But I don't think they'll take the suggestion to stop "taking reservations and selling tickets to perhaps unsuspecting people."

 

[dislvr75]

Horace, I too appreciate all of your insight, thanks for your postings. My sincere hope is that our May 2005 ATA tickets will get us to Orlando for our 7 day land and sea.

Let me clarify something I said earlier though. I was not suggesting that they stop taking reservations or selling tickets, of course they are still a fully functional airline, despite the rumors. My point was that it is unfortunate that there is no recorded message or some way telling folks what may happen,(which I know the airline would never do) so that those "unsuspecting people" don't buy tickets on a airline that is possibly headed for big trouble. Believe me if I were purchasing tickets right now I would steer clear of ATA and buy tickets to MCO elsewhere, even though the prices are higher. I was worried about those folks not paying attention, like my travel agent, who knew nothing about this. Sure, they are not going to stop selling tickets, I just hope word gets out so that people don't buy tickets on ATA without fully knowing the risks.

 

[sgtdisney]

If you purchase your airline tickets with a credit card and the airline goes bankrupt before your travel date you, under law, will get your money refunded.

If everyone stopped buying tickets on financially troubled airlines United, American and Delta would be a memory by now.

 

[tinkerbellmagic]

Originally posted by sgtdisney
If you purchase your airline tickets with a credit card and the airline goes bankrupt before your travel date you, under law, will get your money refunded.

If everyone stopped buying tickets on financially troubled airlines United, American and Delta would be a memory by now.

I guess we are worried that the scenario Goldilocks experienced at O'Hare could happen to us with no prior warning. Long shot, but still. It's not only the bankruptcy issues that we are worried about, it's the pulling out of Midway, especially before next spring, that troubles us.


True, if everyone stopped buying tickets on financially troubled airlines, United, American, and Delta would be a memory now, but when you have a $5,000.00 vacation riding on getting to your destination, you want to take as little amount of chances as possible. If I would have known about the ATA rumors, I would have purchased elsewhere to try to avoid last minute travel hassles.

I am happy with ATA and hope they do not go under or leave Midway.

Tink

 

[dislvr75]

Thanks Tink for responding. Thats exactly the way that I feel, I could not have said it better myself!

 

[Ralph&Pam]

I see two alternative scenarios here:

1. Midway sells their assets at Midway. This will be a very slow process, and it's likely that the City of Chicago would get involved prior to it coming to pass. Today's Chicago Tribune has an article indicating that the city questions ATA's rights to "sell" their Midway gates. Here is a link to Chicago Tribune article. If ATA cancels flights due to disposing of the Midway operations, refunds would have to be provided to ticket holders. Actually, if ATA stops operating out of Midway, they'd have to refund tickets already sold since they do not intend to provide the services that have been contracted. Of course, getting another flight on short notice may (likely would) increase the cost for such customers, and it may be necessary to make changes in plans as to day/time of flights. Rather inconvenient, to say the least, but not necessarily a big financial loss in the sense of never seeing the money again.

2. ATA joins the other airlines in Chapter 11. Those holding tickets for flights originating after the Chapter 11 filing would be at the top of the list to get refunds. This assumes that the flights actually disappear. In most instances, the airline wants to keep flying in order to maintain cash flow. Chapter 11 is a re-organization process, not a liquidation process. The goal is to emerge with a stronger, more viable financial base. This might include lease concessions, employee compensation concessions, selling off assets, etc., all under court supervision. Again, a lengthy process. The biggest problems with Chapter 11 filings is the uncertainty associated with the first few days while everyone is confused by what's going on. In any case, the fact that the primary shareholder of ATA has 70% of the stock provides a strong incentive to try to avoid Chapter 11, since the shareholder value will take a big hit if a re-organization occurs.

Ralph

 

[Chicago526]

Originally posted by Ralph&Pam
2. ATA joins the other airlines in Chapter 11. Those holding tickets for flights originating after the Chapter 11 filing would be at the top of the list to get refunds. This assumes that the flights actually disappear.

Actually, in past bankruptcies that the carrier ALSO ceases operation (stops flying all together, not just pulling out of one particular airport) passengers never get refunds, they are at the back of the line of creditors trying to get paid. Other airlines tend to honor tickets immediatly following an airline going under, but only AFTER that airline's own paid passengers (in other words, good luck going stand-by).

If ATA just pulls out of O'Hare, but stays in buisness, then Chicago passengers will receive a full refund from ATA (ATA has to refund the tickets, it's the law). ATA could also just go into bankruptcy protection (independent of pulling out of Midway) like United and USAirways, both of which are of course still flying.

 

[tinkerbellmagic]

Originally posted by Ralph&Pam
Of course, getting another flight on short notice may (likely would) increase the cost for such customers, and it may be necessary to make changes in plans as to day/time of flights. Rather inconvenient, to say the least, but not necessarily a big financial loss in the sense of never seeing the money again.

I understand what you are saying, but with a Disney vacation, there are sometimes other costs involved besides the airfare, when changes are made to flight times/days.

If for some reason, you are not able to fly out on the day originally planned, you may have to pay other penalites for cancelling/rescheduling other events in your itinerary at the last minute. Some examples are - your ground transportation from the airport to WDW (town car, limo), a hotel you might be staying at the night before your cruise, priority seating arrangements pre-paid by credit card (Cinderellas Royal Table or other Princess meals), or other pre-paid events such as the Halloween and Christmas parties at WDW, and things like that. When something happens to delay or complicate your travel plans to Disney, things tend to fall like Dominos.

All of us travelers have to deal with the chance that someone in our party will become ill, weather related issues, or other events beyond our control. While I realize we have to be flexible, having to deal with the uncertainty of what will happen to ATA right now, really adds to the stress normally associated with travel.

I've read some encouraging posts here though. Worst case scenario, ATA goes bankrupt and ceases to operate (bye bye airfare $$$$). From what I am reading here, that will be a heck of a lot worse than ATA pulling out of Midway (getting a refund). Thanks for that info, Chicago526.

*crossing my fingers ATA stays afloat and in Chicago*
Tink

 

[sgtdisney]

I am pretty sure that if an airline goes bankrupt and you have purchased your tickets with a credit card you will be able to get the money back for your tickets from your credit card company.

 

[manning]

Actually, in past bankruptcies that the carrier ALSO ceases operation (stops flying all together, not just pulling out of one particular airport) passengers never get refunds,

The magic of the credit card. They will credit your account!!!

 

[kristen821]

So does visa credit the account then?

 

[manning]

yep.

 

[inkkognito]

Just flew on ATA tonight...things seemed pretty much normal, and the employees didn't seem to disgruntled (I was a little worried with the mechanics conflict going on, as I do not particularly want to be on a plane that has been worked on by a ticked-off mechanic!).
Barb