Another airline crash-landed in bankruptcy Thursday, as Delta Air Lines' board of directors met to revive a possible merger deal with Northwest Airlines.

Citing the loss of a military charter contract and high fuel costs, Indianapolis-based ATA Airlines filed Chapter 11 on Thursday and said it would immediately cease operations. ATA's parent company, Global Aero Logistics, said Peachtree City-based World Airways and its other subsidiaries are not part of the bankruptcy and will continue to operate normally.

ATA said near-record fuel costs have eaten up cash reserves.

Soaring fuel prices also are the backdrop of Delta's board of directors meeting, which was scheduled to continue Friday.

Although described as a regular board meeting by people familiar with the matter, Delta's directors probably are discussing consolidation options. Northwest suggested last week that the two carriers go ahead with a merger while dropping a condition that the carriers' pilots agree on how to integrate their work groups.

Atlanta-based Delta has declined to verify details of the months-long merger talks, which stalled weeks ago when pilots at the two carriers were unable to reach an agreement.

It's unclear whether Delta will decide to reopen talks with Eagan, Minn.-based Northwest. Dropping the pilots from the merger talks might please investors who viewed the previous incentives for pilots — reportedly about $500 million a year — as too generous.

But such a move also could hurt Delta Chief Executive Richard Anderson's credibility. He told employees in late February that "seniority of our people would be protected" in any planned merger.

One way around that dilemma could be the two carriers reaching a deal similar to Air France's and KLM's combination. Air France and Dutch carrier KLM operate the world's largest airline business in terms of revenue through a holding company. They operate as separate carriers but reap many of the benefits of a merger by coordinating routes, fares and financial operations.

Under such a scenario, Delta and Northwest pilots would remain separate, with different pay scales.

Under an earlier stock-swap deal that was close to being announced in February, Air France-KLM would have invested roughly $750 million in the Delta-Northwest merger, according to people familiar with the talks. All the carriers are partners in the SkyTeam alliance.

As Delta executives plot the future, industry casualties keep piling up. ATA joins at least two other airlines that have announced plans in the past two weeks to shut down.

Charter carrier Champion Air, a charter carrier in Bloomington, Minn., that caters to vacation tour operators, said Wednesday that it will stop flying at the end of May. Aloha Airlines filed Chapter 11 last month and shut down flights this week.