INDIANAPOLIS, Nov. 9 (UPI) -- The state of Indiana is loaning bankrupt ATA Airlines up to $15.5 million to help it keep hundreds of jobs at its Indianapolis headquarters.
The low-fare carrier filed for Chapter 11 protection from creditors Oct. 26, joining United Airlines and US Airways in bankruptcy. Indiana's state transportation authority is buying some airline equipment, spare parts and tools and will lease the items back to the carrier to help it pay employees and operating expenses until ATA can sell gates at Chicago's Midway Airport next month and repay the loan.
ATA had warned it might have to go out of business without the short-term bailout.
"It's in our best interests from an economic perspective," Transportation Finance Authority Chairman Mark Moore told the Indianapolis Star.
ATA is putting up $51 million in assets as collateral for the loan, which is to be repaid before 2008. ATA expects to pay the loan in February.
Incoming Republican Gov. Mitch Daniels said he hopes the bailout works.