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FedEx seeks lawsuit against ATA

Jul 22, 2008

FedEx Corp. sought permission in bankruptcy court Monday to sue ATA Airlines Inc. for breach of contract, a Bloomberg report states.

The report said that FedEx officials filed the suit to defend the company from claims made in an ATA suit filed against FedEx which sought $180 million in damages.

Last month, Indianapolis-based ATA sued FedEx after claiming the Memphis-based shipping giant bankrupted ATA when it canceled a contract to transport U.S. troops.

FedEx Charter Programs oversees six other airline carriers, including Northwest Airlines Corp., in a troop and cargo-hauling contract with U.S. Transportation Command.

The decision to drop ATA caused the airline to lose a key source of revenue, company officials said, forcing the airline to file for Chapter 11 bankruptcy.

According to a statement by ATA COO Doug Yakola, "the cancellation of a critical agreement for our military charter business undermined ATA's plan to address the current conditions facing all scheduled service airlines, including the tremendous spike in the price of jet fuel in recent months. As a result, it became impossible for ATA to continue operating."

FedEx seeks lawsuit against ATA

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