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Independence Air grounded
Independence Air announced it was ceasing all operations as of Thursday.
Its parent company, FLYi Inc., attributed the move to “continuing financial challenges.”
Independence Air lost $82.7 million over the last three months, but airline managers previously denied they were headed for bankruptcy.
The airline’s woes included higher fuel costs. Chief Financial Officer Richard Surratt cited other problems such as stiffer competition.
“We’ve seen intense competition in our market,” Mr Surratt told investors. “Not only did most competitors match our fares, but we’ve also seen additions to capacity and routes in our markets that we quite frankly had not expected.”
Independence Air’s strategy of cutting back on flights from some cities and adding bigger planes for other routes clearly failed.
Said Independence Air Chairman and CEO Kerry Skeen:
“While we’ve been clear in reminding everyone that this was a possibility, we remained optimistic that there would be a way to avoid reaching this juncture. To date there has not been a firm offer put forward that meets the financial criteria necessary to continue operations as is.”
Mr Skeen thanked the airline’s eight million customers and its employees for “creating an airline brand that has been so universally praised by our customers.”
Independence Air began service on 16 June, 2004. The airline currently offers over 200 daily departures to 37 destinations.
The company said it was seeking bankruptcy court approval to automatically refund customers with reservations for flights scheduled beyond that time.
The company also urged anyone to visit its www.FLYi.com website if there are further questions because callers to the airlines’ toll-free number can expect long delays.
Report by David Wilkening
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