N1786b From United States of America, joined Sep 2005, 558 posts, RR: 17 Posted (8 years 1 month 4 days 1 hour ago) and read 14298 times:
FLYi files for bankruptcy
Mon Nov 7, 2005 6:40 AM ET
NEW YORK, Nov 7 (Reuters) - FLYi, Inc. (FLYI.O: Quote, Profile, Research), parent of low-fare carrier Independence Air, on Monday said it and its subsidiaries filed to restructure aircraft leases and other obligations under Chapter 11 of the U.S. Bankruptcy Code.
LTBEWR From United States of America, joined Jan 2004, 12675 posts, RR: 13 Reply 4, posted (8 years 1 month 4 days ago) and read 14134 times:
If I heard CNN correctly, they filed this morning in the USBC District of Northern Virginia. The biz commentator noted they had problems including computer boo-boos that sold flights for like $5 and they had to honor those sales. I think many here would agree that the creation of FLYi was a bad idea and would never work. I wonder how long to Chapter 7/liquidation?
Dtw9 From United States of America, joined Sep 2003, 1128 posts, RR: 2 Reply 5, posted (8 years 1 month 4 days ago) and read 14103 times:
Looks like the whole things for sale ,not just a reorg. From AP news-(FLYi said it will seek court approval to auction the business to potential investors or purchasers, which would be expected to be completed within 60 days.) Good luck selling this one to anybody. Been a loser from day one.
Laxintl From United States of America, joined May 2000, 23469 posts, RR: 50 Reply 6, posted (8 years 1 month 4 days ago) and read 14085 times:
FLYi unfortunately has been a classic case of management incompetence.
From the initial business plan, to its execution the carrier has made one error after another. While they might be somewhat forgiven in the cost department due to the spike in fuel cost, they did not even come close on their revenue projections either.
Never in my life I have seen an airline with such terrible operating margins be reported quarter after quarter.
FLYi went from the best financed start up in history with $350 million in cash (Jetblue only started with $130million)to only having $24 million in the bank today. Stock holders have seen their share value plunge from near $30 to just under 20 cents as of recent.
What a shame for all parties involved.
[Edited 2005-11-07 13:50:20]
From the desert to the sea, to all of Southern California
Tallguy14 From United States of America, joined Jul 2002, 227 posts, RR: 0 Reply 7, posted (8 years 1 month 4 days ago) and read 14078 times:
Once again, it's sad that another carrier has had its undoing at the expense of its employees! It seemed that the Atlantic Coast pilots and management thumbed their noses at UA and were eager to disentangle themselves from the mother ship. They were absolutely convinced that they would be successful. Arrogance and pride seemed to override common sense, in my opinion.
I don't know who was ladle-ing the Company Kool Aid to the pilot group, but they bought it hook, line and sinker. I'm no expert but it seemed clear to me that it just couldn't work.
A friend of mine, a copilot on the CRJ with Independence Air, was furloughed last year and has since found a much better flying job in the corporate world.
Flightopsguy From United States of America, joined Jan 2005, 348 posts, RR: 0 Reply 8, posted (8 years 1 month 4 days ago) and read 14046 times:
The $24M was as of Sept.30. It must be less today. The auction sounds like either an asset sale or a white knight. Also sounds like if they cannot do this auction within 60 days, something else must happen.
It's not unusual for a Chapter 11 filing to roll into a 7 or other liquidation.
But maybe there is a pre-planned sale in the works.
OPNLguy From , joined Dec 1969, posts, RR: Reply 11, posted (8 years 1 month 4 days ago) and read 13962 times:
As badly as I feel for the employees, I have some concerns that venture capitalists are not going to be lining up with offers of DIP financing. If the biz plan has a 109% breakeven load factor (the last number I heard), it indicates the biz plan is fundamentally flawed, and that has to be fixed before anyone can/will lend them any more funds.
Quoting Iloveboeing (Reply 1): This doesn't suprise me.....I'm amazed that they made it this far without filing....
Ditto, times 2. I would have though they would have taken refuge in 11 before the laws changed in October. Unless I missed one somewhere, FlyI will be the first airline that filed under the new laws...
LN-MOW From United States of America, joined Jan 2000, 1907 posts, RR: 14 Reply 12, posted (8 years 1 month 4 days ago) and read 13942 times:
I'm surprised that there is enough money in the company to even allow Ch. 11 .. Flightopsguy is probably right.
I wonder if there's any connection between this and Sir Richard's announcement yesterday that Virgin America is on the move ... ?? I can see him picking up AOC and Airbii at the auction and let the rest go Ch. 7 .... A quick way in ..
LN-MOW From United States of America, joined Jan 2000, 1907 posts, RR: 14 Reply 14, posted (8 years 1 month 3 days 23 hours ago) and read 13851 times:
He wouldn't want Independence. He would want the AOC and the aircraft. He already has Management and concept in place, no reason for him to want anything else.
IAD? Why? Why would VA make money in IAD when DH couldn't?
Iloveboeing From United States of America, joined Oct 2005, 752 posts, RR: 0 Reply 16, posted (8 years 1 month 3 days 23 hours ago) and read 13821 times:
Quoting LN-MOW (Reply 14): IAD? Why? Why would VA make money in IAD when DH couldn't?
I think it's quite possible.......if they use more efficient narrowbodies, like the A320 or B737, with PTVs, etc, then they can have low-fares and be a formidable competitor to UA and others at IAD.....
Indepedence's major flaw was Regional Jets. As long as they use larger aircraft, which have lower operating costs, VA should be fine....
ATWZW170 From United States of America, joined Oct 2004, 904 posts, RR: 3 Reply 17, posted (8 years 1 month 3 days 23 hours ago) and read 13628 times:
You know Mesa is going to put in some bid to buy the carrier, but for a lot less then what it was offering last year. I don't think FlyI really has anything to offer...a hand full of A319's and a bunch of CRJ's that no one wants. It's sad to see this happen but maybe if they had a better fare structure and weren't offering $29 fares they could have made it a bit longer....I pretty much agree that Chapter 7 is just around the corner.
Success is getting what you want...happiness is liking what you get
Kiwiandrew From New Zealand, joined Jun 2005, 8442 posts, RR: 14 Reply 18, posted (8 years 1 month 3 days 23 hours ago) and read 13609 times:
Quoting ATWZW170 (Reply 17): I don't think FlyI really has anything to offer...a hand full of A319's
are the A319's actually FlyI's to offer though ? I was under the impression ( and of course I could be mistaken ) that everything was leased in which case there are no assets for anyone to be interested in buying - can they legally sell the leases ?
Moderation in all things ... including moderation ;-)
Iloveboeing From United States of America, joined Oct 2005, 752 posts, RR: 0 Reply 19, posted (8 years 1 month 3 days 22 hours ago) and read 13603 times:
Quoting ATWZW170 (Reply 17): You know Mesa is going to put in some bid to buy the carrier, but for a lot less then what it was offering last year. I don't think FlyI really has anything to offer...a hand full of A319's and a bunch of CRJ's that no one wants. It's sad to see this happen but maybe if they had a better fare structure and weren't offering $29 fares they could have made it a bit longer....I pretty much agree that Chapter 7 is just around the corner.
And if they had ditched the CRJ's right from the start and stuck with the A319s and added Satellite TV, then they would have had lower costs and got the demand needed with low fares, and they'd be doing much better.
Flightopsguy From United States of America, joined Jan 2005, 348 posts, RR: 0 Reply 21, posted (8 years 1 month 3 days 22 hours ago) and read 13502 times:
Quoting Laxintl (Reply 9): Press release says "Unrestricted cash as of the day of filing is $24.0 million."
You are absolutely correct. My error.
I'm not sure what assets they can sell. My understanding was that pretty much everything except the Dornier parts already are mortgaged. The company name? The FF database? LGA slots? What else does the company have clear title to that could be sold on an unrestricted basis? I doubt Mesa or any other small jet provider would want the A319's. And again, I don't see where these aircraft are FlyI's to sell.
I would think that the leaseholders on the aircraft and real estate would have a say about auctioning their assets.
Kohflot From , joined Dec 1969, posts, RR: Reply 22, posted (8 years 1 month 3 days 22 hours ago) and read 13501 times:
So in the next 60 days, they have to find a 'high bidder' for the few remaining assets.. as mentioned, are their aircraft even considered assets? They're all leased. Seems like the only thing left is the A concourse at IAD.
At the same time, they need to try to prevent a 'brain drain'. Who is going to stay on purpose? Especially after the paycut?
Flightopsguy From United States of America, joined Jan 2005, 348 posts, RR: 0 Reply 23, posted (8 years 1 month 3 days 22 hours ago) and read 13438 times:
Quoting Kohflot (Reply 22): So in the next 60 days, they have to find a 'high bidder' for the few remaining assets.. as mentioned, are their aircraft even considered assets? They're all leased. Seems like the only thing left is the A concourse at IAD.
Especially when someone like Branson could negotiate great leases with Airbus directly on brand new airplanes. Isn't most of FlyI's airbus fleet mortgaged to the Airbus financial arm, rather than GECAS or some other entity?
I don't believe they own the actual real estate or the building of Concourse A at IAD, but would appreciate some clarification on this. More likely just leasing the space....may own some of the interior stuff (gate seating, etc.).
ORD From United States of America, joined Jul 1999, 1371 posts, RR: 1 Reply 24, posted (8 years 1 month 3 days 22 hours ago) and read 13337 times:
Quoting Iloveboeing (Reply 16): Indepedence's major flaw was Regional Jets. As long as they use larger aircraft, which have lower operating costs, VA should be fine....
Regardless of costs, there is only so much business to go around in the Washington area. United has a very loyal following. It seems that the market there cannot support two hub carriers. As for connecting travelers through IAD, there are a ton of competitive hubs up and down the east coast (perhaps too many).
25 Kohflot: A quick Google provides this: http://www.flyi.com/company/pressarchive/1999/gen-concourse.html "The airport authority will provide the financing for t
26 Tbird: Not sure if any of you noticed but they didn't mention anything about DIP financing which most airlines receive when they are in Chap 11 to help them
27 Zvezda: It would be interesting if UA were to buy them.
28 Lightsaber: definitely, good luck to all the employees at D. Interesting facts. I'll agree with the chorus. I'm surprised Boyd hasn't written anything about this
29 FLAIRPORT: maybe VA could by FlyI's A319 assets and gates and DH can continue operating a RJ product, but this time a new RJ concept as a connection carrier to U
30 DAYflyer: I think that is a wise staring point. Perhaps America West could pick them up as well, since US has a good presence at National airport.
31 Bicoastal: United just recently rebid its regional network. There's nothing left for DH to take. Mesa, Skywest and others have finalized the new routes/contract
32 Gman3: Also we at United are hiring flight attendants that will most likely be based at IAD. Keep checking the papers and website for open house info.
33 MiCorazonAzul: so that would explain the employees' long faces while riding to the employee parking lot......and those ATA people aren't smiling much these days eith
34 Jerion: From the FLYI website: We've joined United, US Airways, Delta, Northwest and ATA who have recently been or are still operating under Chapter 11 of the
35 Clickhappy: does this mean no more larry_da_liquidator??? He was a daily source of entertainment for me!
36 N723GW: I am not surprised...however, they seem to be so small that it should be (and I say SHOULD) be a little easier to clean up their mess rather then UA/T
37 Tozairport: You know, it's funny. Bubble jet, DAL, and NWA all based their business plans on one fundamental idea - kill United. AMR went on running a business an
38 B777A340Fan: Not to sound like a smart ass, but DUH! I (an engineer) could've told Flyi that their business plan wouldn't float, it was a ship sinking day after da
39 N1120A: Restructure what may I ask? The leases for a handful of A319s? Or perhaps CRJs that don't have lease rates that high anyway and that even if they wer
40 Airlinelover: Independance has been a company doomed from the get-go. When they were still ACA, they screwed things up big time, but unfortunately the management is
41 UA744Flagship: It seems that the company has been planning on a DH reduction/elimination for next year. As many know, lots of F/As are being hired for next summer's
42 Cloudy: There's not really much for him to say that he hasn't already said many times in the past few weeks. He hasn't commented on Virgin much, not it a lon
43 IRelayer: This is completely ridiculous. FLYi should be OUT OF BUSINESS starting yesterday...and now they are "restructuring"? I doubt there is much of anything
44 Starrion: I'm as surprised as anyone that they got DiP financing. What assets did they have to put up that wasn't morgaged to the hilt already?
45 Kiwiandrew: I haven't read anywhere that they have got DiP financing - have I missed a post somewhere ?
46 LN-MOW: He'll find another board .. he's already been on the UAL board, but I think it's too quiet for him...
47 N766UA: Too bad, so sad. I really feel sorry for the employees at Indy. With the exception of their IAD staff I think they have some of the hardest working in
48 A330323X: Their fleet plan of the minute is apparently for 30 CRJs and 12 A319s. This document also talks about how it was everyone else's fault (fuel, United,
49 Skytony: It is quite interesting to be reading these posts saying that Independence Air will be going into chapter 7 and they have a horrible business plan, wh
50 PlanesNTrains: Sweet, coming from N766"UA". As long as ATA, NW, DL, US, et al get to, why should FlyI be any different? Well if management were the only ones suffer
51 HPRamper: Might F9 be interested in the assets? The Airbus fits them and the CRJs would be a boon for their JetExpress ops which are currently hurting for aircr
52 Quickmover: I don't think the engines on the 319s are the same. As for the rjs, nobody wants the 50 seaters because of the high per passenger costs. 70 or 90 seat
53 Mariner: You are correct. Correct again. One mo' time - correct! cheers mariner