Go Back   Airline Pilot Central Forums - Find your next job as a Pilot > >
Major Legacy, National, and LCC
 

Welcome to Airline Pilot Forums - Connect and get the inside scoop on Airline Companies

If this is your first visit, be sure to check out the FAQ. Join our community today and start interacting with existing members. Registration is fast, simple and absolutely free.


User Tag List

Reply
 
Thread Tools Search this Thread Display Modes
Old 11-07-2005, 02:53 AM   #1  
Chief Jeppesen Updater
Thread Starter
 
FlyerJosh's Avatar
 
Joined APC: Oct 2005
Position: Executive Transport Driver
Posts: 3,047
Default FLYi, Inc. Files for Voluntary Chapter 11 Reorganization

Another one falls...


FLYi, Inc. Files for Voluntary Chapter 11 Reorganization (Press Release)
Monday November 7, 6:23 am ET

- Independence Air To Continue Flying And Serving Customers
- Auction Process Announced For Potential Investors Or Purchasers


DULLES, Va., Nov. 7 /PRNewswire-FirstCall/ -- FLYi, Inc., parent of low-fare airline Independence Air, today announced that FLYi, Inc. and its subsidiaries (the "company") including Independence Air, have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in order to restructure the company's aircraft leases and other obligations to achieve necessary cost savings.

The company also announced it will request court approval to engage in a formal court-supervised auction process to seek outside investor(s) or purchaser(s) it needs to continue its operations. If the process is successful, it is expected to be concluded within the next sixty days. Those who have expressed interest during previous discussions, as well as new parties, will be invited to present their bids. Bidders will be permitted to demonstrate their interest in investing in the company, or to bid on all or portions of the company's assets. The company currently anticipates that it has the financial resources to fund its obligations-including the payment of employee wages and benefits-during the process.

As it undertakes the auction process, Independence Air plans to continue serving customers, and to continue its flight schedules in the ordinary course of business. The company plans to honor reservations and tickets on Independence Air and to allow its 1,000,000+ iCLUB(SM) members to continue to accrue and redeem points on the airline with no restrictions. The company has no plans to make any additional changes to its operating schedule or route map of destinations at this time. Independence Air now offers approximately 220 daily departures to 36 destinations.

"After careful consideration, we have concluded that a court-supervised restructuring will allow us to complete our cost-savings initiatives while seeking outside investors or purchasers, and represents the best solution for Independence Air, our customers, employees, creditors and the communities we serve," said Kerry Skeen, Chairman and CEO of FLYi, Inc.

He added, "Since the launch of Independence Air almost 18 months ago, our employees have helped us achieve a remarkable degree of customer service success and brand recognition while operating in what has been described as the most challenging economic environment in airline industry history, including record high fuel prices and extreme revenue weakness. These circumstances have prevented us-and virtually all U.S. airlines-from meeting financial goals. We have already reduced operating costs by undertaking a comprehensive operational restructuring. We will continue that effort and move quickly to use the tools of the Chapter 11 process to implement other changes that will allow us to achieve an even more competitive cost structure to make us more attractive to potential investors or purchasers."

As part of this cost-cutting effort, the company has announced it is undertaking a process aimed at company-wide wage reductions. Taking a leadership role, CEO Kerry Skeen has agreed to an immediate 25% salary reduction on top of a 15% cut earlier this year. President and Chief Operating Officer Tom Moore will take a 20% cut, on top of an earlier 10% reduction. Management and other salaried employees will be subject to an immediate 5% pay reduction. The company has been engaging the leaders of its unionized work groups-pilots, flight attendants and mechanics-in an effort to enact changes to wage rates and work rules. It is anticipated that an announcement on a tentative agreement with both the flight attendants (AFA) and mechanics (AMFA) will be released shortly.

Mr. Skeen concluded, "We want to once again offer our sincere thanks to the seven million passengers who have flown with us so far. Since we launched last summer, we have built a brand that truly stands for something -- a very different style of service -- and our customers have been more than generous in their praise of our people. As we work behind the scenes to address the company's financial situation, we thank you for your continued support of Independence Air at Washington Dulles and in all the communities we serve. "

In conjunction with today's filing, Independence Air filed a variety of "first day motions" to help ensure a smooth transition into the Chapter 11 reorganization case. During the auction process, vendors, suppliers and other business partners will be paid under normal terms for goods and services provided during the reorganization.

The company filed its petitions in the U.S. Bankruptcy Court for the District of Delaware. The company's petitions listed assets of approximately $378.5 million and liabilities of approximately $455.4 million as of September 30, 2005. Unrestricted cash as of the day of filing is $24.0 million.

Miller Buckfire and Co., LLC and ENA Advisors have been retained as the company's financial advisors and Jones Day has been retained as restructuring counsel. Gibson Dunn & Crutcher LLP serves as the company's corporate counsel.

All FLYi, Inc. shareholders are advised that the likely outcome of the company's Chapter 11 case is the cancellation of the company's existing common stock without consideration, in which case FLYi stock would have no value. FLYi stock is highly speculative and the company urges investors to use extreme caution in decisions about the stock.

Independence Air began low-fare service from its hub at Washington Dulles International Airport on June 16, 2004, and has served over seven million passengers to date. The company first began commercial air service on December 15, 1989, and operated previously as Atlantic Coast Airlines.

Independence Air is the low-fare airline that makes travel fast and easy for its customers with a customer first attitude, innovative thinking and a willingness to challenge the status quo.

Independence Air, FLYi, the "i" logo mark, FLYi.com, iCLUB and Tender Loving Service are service marks of Independence Air, Inc.

This press release contains forward-looking statements and is made as of November 7, 2005, and the company undertakes no obligation to update its disclosures, whether as a result of developments in its efforts, or as a result of any other new information, future events, changed expectations or otherwise, prior to its next required filing with the Securities and Exchange Commission. Such forward-looking statements are subject to risks, uncertainties, assumptions and other factors that may cause the actual results of the company to be materially different from those reflected in such forward-looking statements. Such risks and uncertainties include, among others: the ability of the company to continue as a going concern; factors that could impact the company's ability to complete a court-supervised auction process that is necessary for the company to continue operations, including the ability to attract potential investors or acquirers through the court-supervised auction process, to obtain favorable bids from such potential investors or acquirers and to reach definitive agreement with one or more potential investors or with a potential acquirer and to obtain requisite court approval for any such agreement; the action of the company's debt holders and other creditors to the company's bankruptcy proceeding and to the company's auction process; factors that could affect the company's ability to maintain operations during its bankruptcy proceeding, including the reaction of customers, suppliers and competitors to the company's bankruptcy proceeding; the ability to obtain improved wage rates and work rules with the company's unionized work groups; the ability to maintain and improve yield with a reduced network reflected in the company's current flight schedule; the ability to successfully obtain revised terms from lessors for aircraft the company intends to continue operating; the ability to manage inventory to maximize yield; the effects of high fuel prices on the company's costs, and the availability of fuel; the ability to adjust operations, realize on internal or external sources of liquidity or otherwise address the company's financial obligations; the costs of returning aircraft and related records to lessors for aircraft that are rejected by the company; the ability to successfully hire, train and retain employees; the seasonality of air travel; and general economic and industry conditions, any of which may impact Independence Air or the company, its aircraft manufacturers and its other suppliers in ways that the company is not currently able to predict. Certain of these and other risk factors are more fully disclosed under "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Risk Factors Affecting the Company", and "Risk Factors Affecting the Airline Industry" in the company's Form 10-K/A for the year ended December 31, 2004 and Form 10-Q for the quarter ended June 30, 2005.
FlyerJosh is offline   Reply With Quote
Old 11-07-2005, 08:13 AM   #2  
New boss = Old boss
 
mike734's Avatar
 
Joined APC: Mar 2005
Position: Ca B737
Posts: 2,739
Default

Sorry to hear this although it is not (recently) unexpected. I really thought they had a great shot at making it independently. I know quite a few of the most senior pilots there as I was there the first day of operation (as a division of WestAir). I wish them well. I know they are not done but this does not bode well.
mike734 is offline   Reply With Quote
Old 11-07-2005, 08:53 AM   #3  
AAmerican Way for AA Pay
 
B757200ER's Avatar
 
Joined APC: Oct 2005
Position: B-737 Pilot
Posts: 1,603
Default

Mike, I agree there are good people there, but I think it was a very BAD idea to give up feeding UAL and going into low-fare, semi-low-cost operations. Skeen was WRONG in thinking he could run a low-cost airline with 70+ 50-seat RJs, doing routes formerly flown profitably by J-41s. I think it was economic suicide, and the marketplace was a shambles when they tried it. Plus, charging for fares that are significantly below your operating costs is ridiculous.

I think it will be liquidating under chapter 7 shortly.
B757200ER is offline   Reply With Quote
Old 11-07-2005, 09:37 AM   #4  
Da Man
 
WatchThis!'s Avatar
 
Joined APC: Feb 2005
Position: DC-10 F/O
Posts: 435
Default

Quote:
Originally Posted by B757200ER
I think it will be liquidating under chapter 7 shortly.
Unfortunately you may be right. I didn't see any mention of DIP financing in the press release, I've heard that it's because iFly doesn't have any assets to borrow against.

Best of luck to the employees, may the management team go crawl back under the rock they came from....and stay there.
WatchThis! is offline   Reply With Quote
Old 11-07-2005, 11:38 AM   #5  
Gets Weekends Off
 
Joined APC: Aug 2005
Position: Lead Captain
Posts: 1,453
Default

I'm with Mike on this one. I'm also former WestAir and have many old friends at Indy. For their sake I hope it doesn't go Chapter 7.

I really applauded them for giving UAL the finger and hoped beyond hope that it would work. Unfortunately they have proven beyond a shadow of a doubt how uneconomical the RJ truly is without fee for departure arrangements or a regulated fair environment.

If it does go Chapter 7 hopefully other airlines will give them preferential hiring. This is a really stand up group of pilots and they should be treated well.


TP
Typhoonpilot is offline   Reply With Quote
Old 11-08-2005, 02:53 AM   #6  
Gets Weekends Off
 
fireman0174's Avatar
 
Joined APC: Aug 2005
Position: Retired 121 pilot
Posts: 1,005
Default

Quote:
Originally Posted by mike734
Sorry to hear this although it is not (recently) unexpected. I really thought they had a great shot at making it independently. I know quite a few of the most senior pilots there as I was there the first day of operation (as a division of WestAir). I wish them well. I know they are not done but this does not bode well.
Their concept of flying high cost RJs was doomed from the beginning. I can understand the desire to get out from under the UAL bankruptcy hammer, but I don't think they ever really had a chance.

Sadly, many employees get the short end - as usual.
fireman0174 is offline   Reply With Quote
Old 11-08-2005, 07:34 PM   #7  
Meworry?
Guest
 
Posts: n/a
Default

Quote:
Originally Posted by Typhoonpilot
If it does go Chapter 7 hopefully other airlines will give them preferential hiring. This is a really stand up group of pilots and they should be treated well.
TP
Interesting. Jetblue has been hiring a lot of these guys lately.
  Reply With Quote
Old 11-09-2005, 03:42 AM   #8  
Line Holder
 
Joined APC: Oct 2005
Position: Tanker Toad
Posts: 44
Default

Many of the schedulers and dispatchers from ACA went to Jet Blue as initial hires. I flew J-32s for ACA. They are a great group of people, best of luck. I think Skeen was President of Pan Am near the end. He said he wouldn't take a pay check unless Pan Am made money. The company lost money until he sold their real estate in New York. Badabing the company shows a profit and he gets a paycheck.
Plunder Hound is offline   Reply With Quote
Old 11-09-2005, 04:33 AM   #9  
Line Holder
 
Joined APC: Jul 2005
Position: E190 CA
Posts: 33
Default

The last Phase II posting at JetBlue had 27 Fly-I guys on the list. I hope they all get hired.
Av8tor is offline   Reply With Quote
 
 
 

 
Reply
 



Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Related Topics
Thread Thread Starter Forum Replies Last Post
GEMINI files Chapter 11 dc10maniac Cargo 12 03-19-2006 11:35 PM
Mesaba Files for Chap. 11 CRM1337 Regional 2 10-14-2005 05:07 AM


All times are GMT -8. The time now is 08:17 PM.


vBulletin® v3.9.3.5, Copyright ©2000-2019, MH Sub I, LLC dba vBulletin
User Alert System provided by Advanced User Tagging v3.3.0 (Lite) - vBulletin Mods & Addons Copyright © 2019 DragonByte Technologies Ltd.
Website Copyright 2000 - 2017 MH Sub I, LLC dba Internet Brands

Search Engine Optimization by vBSEO 3.6.1