updated 8/13/2005 3:21:15 PM ET 2005-08-13T19:21:15

The head of ATA Airlines announced he will retire from the company he founded and built into the nation’s 10th largest airline, then allowed to slip into bankruptcy.

J. George Mikelsons, 67, said in a statement late Friday he will step down as president and chief executive of ATA Holdings Corp., the airline’s parent company, by the end of the month.

“I am leaving to enjoy retirement like others my age, but am confident I will be leaving ATA in good hands,” Mikelsons said in a statement.

John G. Denison will take over as CEO, company officials said. Mikelsons could not immediately be reached for comment.

According to terms of his proposed severance package, Mikelsons will receive a one-time payment of $650,000 and the airline would forgive $400,000 of the $625,000 of debt he owes the company if he signs a three-year non-compete agreement.

The news comes a day after ATA asked a judge to allow it to void its contract with 833 pilots and flight engineers so it can cut wages by 20 percent.

The Air Line Pilots Association opposes the cuts, saying its ATA members have accepted $66 million in wage concessions in the past 14 months. ATA’s plan would freeze pensions and switch the pilots to a “substandard” health program, the union said.

In a motion filed Thursday in U.S. bankruptcy court in Indianapolis, ATA argues the cuts would help it save from $37.6 million to $44 million in 2006, depending on whether a raise scheduled for next year is taken into account.

ATA said the cuts are needed to help it secure $100 million in new capital needed to exit bankruptcy.

Mikelsons started the company in 1973 as Ambassadair Travel Club, flying club members to vacation spots. The airline was certified to offer charter flights to the general public shortly after deregulation in 1978.

After reaching more than $1.5 billion in annual revenue in the 1990s, Indianapolis-based ATA filed for Chapter 11 bankruptcy protection in October 2004.

The airline has cut about 3,100 jobs since it began downsizing from a work force of about 7,800 people two years ago.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 2.79%
$30K home equity loan FICO 5.78%
$75K home equity loan FICO 4.54%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.57%
13.57%
Cash Back Cards 17.91%
17.91%
Rewards Cards 17.15%
17.15%
Source: Bankrate.com