AccessAir To File for Chapter 11
.c The Associated Press
By DAVID PITT
DES MOINES, Iowa (AP) - Low-cost airline AccessAir is temporarily grounding its fleet while it undergoes a Chapter 11 bankruptcy reorganization but will be back within a month offering new destinations, officials said Monday.
``We elected to interrupt service temporarily while we reorganize route structures and our financial affairs,'' president and chief operating officer Rich Musal said after the company filed for bankruptcy protection.
Planes were to stop flying at midnight Monday but should be back in the air within 30 days, he said.
Customers holding tickets may seek a refund or keep their tickets and get two for one when AccessAir begins flying again.
In response to rising air fares out of the Des Moines International Airport, AccessAir took off Feb. 3 with service between Des Moines and Los Angeles and New York, with stops in the Quad Cities along the Iowa-Illinois border and in Peoria, Ill. A stop in Colorado Springs, Colo., was added later.
The driving concept was to provide low-cost flights in a city that had unusually high airfares. Organizers felt the high fares were an impediment to the region's businesses.
Musal said customers didn't respond as officials expected. The best month for the airline since it began flying was November when planes were only 34.9 percent full, he added.
As a result of rethinking the Des Moines market, Musal said the company will shut down for a while and ``come up with routes people want to fly.''
AccessAir is considering flying to Las Vegas, Orlando and Phoenix, said Musal, adding that flights to Colorado Springs and Los Angeles will continue.
James Davis of Bettendorf, Iowa, a member of the airline's board of directors, said bankruptcy was the only way for the company to move forward.
``I'm very disappointed in what has become necessary,'' Davis said.
Davis said at a Nov. 23 meeting, the board voted to authorize management to operate through the weekend so that passengers would not be stranded for the Thanksgiving holiday.
Musal said the new AccessAir will be a vastly different company.
``We're going to come back into this market walking rather than running,'' he said.