ATA Airlines, a passenger carrier and sister company to freighter operator World Airways, ceased operations and filed for Chapter 11 bankruptcy protection on Thursday.

The Indianapolis-based airline shut down after what it called a key military charter contract was canceled. ATA became the second passenger airline in as many weeks to shut down, following the demise last week of Aloha Airlines.

ATA Chief Operating Officer Doug Yakola pointed to recent surge in jet fuel prices along with the military contract as a reason for ATA's shutdown.

"Unfortunately, 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," he said. "As a result, it became impossible for ATA to continue operating."

ATA is a subsidiary of Global Aero Logistics, which last year purchased World Airways, which also has done extensive work for the U.S. military. ATA was part of a team of passenger and cargo air carriers led by FedEx that recently won a $1 billion, fixed-price military contract that is due to be implemented this September.