America West Airlines said it will consider making an offer to buy struggling Indianapolis carrier ATA Airlines within the next two weeks.

The move to buy ATA assets in entirety would derail ATA's plans to streamline itself into a smaller airline. Tempe, Ariz.-based America West wants all of ATA to give it heft as it takes on Southwest and other carriers.

"We're running computer models now, looking at integrating the fleets and routes" of ATA and America West, said Elise Eberwein, America West vice president of corporate communications, noting the U.S. Bankruptcy Court in Indianapolis has set a Nov. 23 deadline for bids.

On Tuesday, Southwest Airlines also confirmed it is interested in negotiating with ATA for seven Midway gates. AirTran Airways of Orlando, a major carrier in Atlanta, also wants the Chicago hub to expand its Midwest presence.

ATA Chairman J. George Mikelsons, however, has plans to bring the 31-year-old airline out of bankruptcy as a smaller company.

After the airline filed for Chapter 11 bankruptcy protection Oct. 26, Mikelsons disclosed plans to spin off ATA's 17 gates at Chicago Midway, Reagan Washington and New York LaGuardia -- for $87.5 million to AirTran.

ATA then would focus on what remains -- the military and holiday charter business and the Chicago Express shuttle service, which mainly links smaller Midwestern cities and Midway with 17 Saab 340 turboprop planes.

Indiana officials took a first step Monday toward helping Mikelsons move in that downsized direction.

Indiana's Transportation Finance Authority approved a $15.5 million bailout loan for the carrier after ATA failed to line up financing from other lenders.

The state's loan would be secured by revenue from the sale of 14 Midway gates and engine parts and related tools stored in ATA's Indianapolis maintenance facility.

Provisions in Indiana's proposed loan agreement with ATA call for the state to be repaid when the gates change hands regardless of who the buyer is.

However, it could require more than a state loan and a sale of assets to keep ATA flying.

ATA faces another round of concession negotiations with pilots and must get out of expensive leases on some or all of the Boeing 737s and Boeing 757s it won't need after it streamlines. It has 60 of the airliners now.

While America West prepares an offer, ATA is getting ready to open a second round of concession negotiations with its 1,100 pilots, represented by the Air Line Pilots Association.

The airline has scheduled a Nov. 18 financial briefing with union officials, apparently to set the stage for concession talks, said ATA pilot Erik Engdahl, president of the union.

Pilots tend to favor an America West deal because they believe they would join the acquirer and keep most or all of their seniority rights. AirTran has indicated it would not take over ATA planes and consequently would not need the flight crews.

The pilots earlier this year approved $43 million in payroll concessions over two years.

Mark Moore, chairman of the Indiana transportation authority, said the $15.5 million bailout loan makes sense for the state.

Moore said it could help preserve ATA as a company with headquarters jobs in Indianapolis. And it would maintain ATA flights from Indianapolis, Fort Wayne and South Bend.

"They made it clear their reorganization plan was for an Indiana-focused airline."

Indiana would have a super-priority lien, putting the state ahead of all other lenders in obtaining cash after the Midway gates are sold, Moore said.

The deal still must be approved by the Indianapolis International Airport Authority and the bankruptcy court.

ATA also reported Tuesday that it boarded 10 percent more passengers in the first 10 months of this year than the 2003 period, and that its planes last month were fuller -- the "load factor" rose 4.6 percentage points to 71.3 percent. Its passenger total for last month -- 797,347 -- gained 0.4 percent from October 2003.