MAIR to end operations after selling Big Sky assets
Bloomberg News

Article Last Updated: 12/20/2007 03:09:37 PM CST

Minneapolis-based MAIR Holdings Inc., the parent of Big Sky Airlines, said it will cease operation after selling the commuter carrier's assets and distributing the proceeds to shareholders.
Chief Executive Officer Paul Foley announced the decision today on a conference call with analysts and investors. MAIR is targeting "fiscal 2008" for the distribution, Foley said, declining to be more specific.
Surging jet-fuel prices, weak demand and revenue, and bad weather forced MAIR to reverse an expansion of Big Sky flights to the eastern U.S. after just a month. The Billings, Mont.-based carrier, flying in the east for Delta Air Lines, lost about $1.3 million on the operation in November, Foley said.
"We are extremely disappointed by the fact that, despite our efforts, we no longer see a route to profitability in our eastern operations and are no longer willing to fund the cost of developing that market," Foley said.
Big Sky will sell seven aircraft and spare parts used for the Delta flights and valued at about $21.9 million, he said. There are 140 employees in that operation, and MAIR will have unspecified costs for the shutdown, he said. Foley said MAIR is in talks to transfer Big Sky's Montana operations to another carrier and will seek to sell its U.S. operating certificate.
Delta's Comair regional unit began replacing Big Sky service today between Boston and Bangor, Maine, said Anthony Black, a spokesman for Atlanta-based Delta. "At this point we have no plans to backfill" the other 14 routes, he said.
MAIR, which posted losses in eight of the previous nine quarters, sold its bankrupt Mesaba Airlines unit to Eagan-based Northwest Airlines Corp. earlier this year.