Airline Pilot Central Forums - List of US startup airlines

Quote:

Originally Posted by ContractFlyGal

The college kid was Luke Thompson, can't remember the name of the fake airline. Probably a web search by his name would give you all the information you need.

http://en.wikipedia.org/wiki/Luke_Thompson

Luke R Thompson (born August 13, 1984 in Trenton, New Jersey), an American, while 18 and a sophomore at Babson College, was sued along with his company Mainline Airways LLC, a tour-operator, in June 2003 for selling travel through Mainline Airways in well publicized nature by the Attorney General of Massachusetts, Thomas Reilly. The publicity of the suit was exacerbated greatly by his age; while initially a local story, a day later the lawsuit instantly became a worldwide story once the fact that Luke Thompson was 18 years old was put in a press release. Following the lawsuit, Thompson remained enrolled at Babson College to complete his B.S. degree and was subsequently accepted into a masters program at the college's graduate school of business.
The United States Department of Transportation, the regulatory agency overseeing tour operators opened an investigation against his company Mainline Airways in 2003 and took no action. However, in June 2003 Massachusetts Attorney General Thomas Reilly filed the well-publicized state lawsuit against Mainline and Luke Thompson alleging that the company would not perform the travel services paid for by customers that were to be executed beginning only a month after the suit was filed, and Reilly expressed a general concern that the company was nothing more than a fraud and Thompson was laundering large amounts of cash from the company. It was later revealed that the funds received from customers for future services were actually protected in a company escrow bank account. The suit had sought to shut down the company, obtain refunds for all customers, and $605,000 in state fines from both Mainline and Luke.
Shortly after the suit was filed, Thompson declared that his company was suspending its plans to begin chartering flights due to "bad press created by the lawsuit" and canceled all “pre-reservations” and issued refunds due to the cancellation. The company had maintained the funds collected from customers so it was able to issue refunds quickly. Mainline Airways says it had planned to re-book passengers on Delta Air Lines, with whom the company had matching schedules and rebooking agreements in the event that the planned charter flights were canceled or deferred. However most customers had already put stop-payment orders on their credit card transactions after hearing the press and the company did not have sufficient capital to pay for both refunding and re-booking customers, leading to the decision to purely refund customers.
Over a year after the suit and Mainline discontinued operations, on September 2nd 2004, a settlement was reached and approved between Luke Thompson and the state, providing that no party admitted wrongdoing or liability, and for no fines or other penalties would be paid Thompson or Mainline; the state had originally sought $605,000 in fines. While Thompson was not fined, he agreed that he could be fined $5,000 in the event that other terms of the settlement are violated, including if refunds provided over a year earlier were somehow not completed or the company engages in the of pre-reservation charter sales in the future where the name of the airline operating the service is not revealed at the time of purchase. The settlement formally ordered Mainline to refund all customers, but refunds had actually been provided in June 2003. The company was not under court order to issue refunds until their settlement was approved over a year later.
Prior to the settlement, Thompson and Mainline filed an answer indicating over 30 defenses and over 10 counterclaims alleging improprieties and perjury in documents filed with the court to obtain a restraining order restricting sales as well as misrepresenting the terms of the order in the plaintiff Thomas Reilly's press releases, which incorrectly stated that Reilly had froze the company's assets and obtained an order to refund customers. The actual restraining order issued by the court did not order either of those actions and Thompson and Mainline demanded restitution for those errors. The settlement released all parties from liability and neither Mainline, Thompson, nor Reilly admitted wrongdoing of any kind.
No declaration has been made by Thompson or another company official if or when Mainline Airways LLC will resume operations; the corporation remains in active status three years after it discontinued sales and operations.
According to IRS tax records, Thompson's company Mainline Airways posted a substantial loss in 2003 including call centre expenses, and forfeiture a $20,000 deposit on an aircraft charter contract. Thompson reported that he was thankful that the company had not yet begun to advertise when the suit was filed so losses were mitigated, as a large amount of advertising was planned for soon thereafter. He also conceded that “[he] was confident in being able to finish a charter agreement with one of the dozen companies he had been working with, but advertising for project was behind and it was likely that plans for the charter would have been deferred due to the advertising delays,” and that customers buying seats on dates prior to the new start date would have been rebooked.
Before college, he lived in Lower Makefield Township, Pennsylvania, a suburb northwest of Trenton, New Jersey