Air Transport International

Air Traffic Services Corp. and Interstate

Two organizations competed to fly parts for Big Three automakers after Universal Airlines collapsed in May 1972: Zantop International Airlines (ZIA) and Air Traffic Services Corp. (ATSC; not to be confused with ATI's current owner, ATSG). Founded by David M. Clark (previously at Universal and predecessor Zantop Air Transport) and like ZIA, headquartered at Willow Run Airport near Detroit, ATSC hired airlines to fly parts and provided aircraft to some of those airlines through a related company, Plymouth Leasing. ATSC gave significant business to nascent carriers Evergreen International Airlines and Rosenbalm Aviation in the mid-1970s. ATSC gained national attention in 1979 when reporting showed that in the early 1970s ATSC contracted with Intermountain Aviation and Southern Air Transport, later revealed to be Central Intelligence Agency (CIA) controlled. Clark said he didn't know, but he also said the CIA offered him a job. ATSC's revenue was reported at $50 million/year (over $220 million in 2026 terms).

The 1977 Air Cargo Deregulation Act freed the US domestic air freight market. In 1978, ATSC founded Interstate Airlines (originally U.S. Airways), operational by year-end 1979. Interstate was originally a Convair 580 operator (see Fleet), the aircraft owned by Plymouth Leasing or ATSC, several flying for each of Purolator and Emery. It graduated to Lockheed Electras, Boeing 727s and Douglas DC-8s (see Fleet). The airline was known for flying thoroughbreds, including Secretariat. In 1983, its main commercial customer was Emery and it had 13 727s based in Dayton. The airline also operated for the USAF Logair program. By 1987, Interstate was one of four main contractors for United Parcel Service (UPS), flying packages on UPS-owned aircraft along with Evergreen, Orion and Ryan. ATSC and Interstate moved headquarters from Michigan to Little Rock, Arkansas in 1983 but in 1987, UPS's Louisville hub was Interstate's main base with about 300 (out of about 400) employees based there.

Air One and liquidation

Interstate was interested in passenger service, at one time hiring Mark G. Morris as a consultant on a passenger project. Morris later launched St. Louis-based Air One, which operated all first-class 727s (see picture) from April 1983 to an October 1984 bankruptcy. In 1986 ATSC hired Morris and in February 1987 Interstate merged with the remains of Air One. But in August 1987, UPS announced it would directly operate its aircraft by the end of 1988. This stripped Interstate of 80% of its business and stranded assets like a Little Rock training center, leading Interstate to declare bankruptcy in October. Starting 1988, Interstate liquidated under Chapter 11.

Transition to Air Transport International and ICX