Independence Air

[hdawson]

Independence Air, with GE's permisssion, cancelled leases on 10 regional jets over the weekend. This after they postponed delivery of 10 new planes from Airbus in Nov, from 2005 till 2007. They just aren't filling the planes to a profitable level.

[Globaliser]

The source that I heard this from also said:-

The agreement also provides $19.5 million in financing with a five-year term and restructures the leases for 27 additional regional jets to provide Independence Air with an early termination option for 6-10 additional aircraft and to defer "a significant portion" of payments.

 

In an interview with CBS Marketwatch, Independence Air also reportedly confirmed that it will cut an undisclosed number of employees, as the return of the aircraft will mean the cutting of about 25 percent of the airline's schedule.

"Beginning of the end" stuff, this is.

[stephenandrew]

I think its too bad--I flew on Independence several times--the service was very good---flight attendents, pilots, gorund crew were all very friendly--prices were competitive. Oh well--I used to like People's Express too.

[ddl]

I just booked with them for a 3/4/05 flight from Detroit to West Palm Beach @ $69. Was a little leary because of all the news, they seem to be a great company and hopefully they can pull out of it. Most of the $69 fares are now at $119 or $199. Hope that means people are using them now and will continue to.

[Globaliser]

"Beginning of the end" stuff, this is.

Possibly alarming news (well, rumour at the moment) that I've heard today: One aircraft was repossessed by a lessor last week, and Indy has missed an interest payment today either on a lease or a loan.

 

Still looking for confirmation of these, but anyone who's looking to book on them might want to do their own research into these possible stories.

[Globaliser]

... and Indy has missed an interest payment today either on a lease or a loan.

Indy's own press release on this interest default:-

DULLES, Va., February 16, 2005

 

FLYi, Inc. Announcement Regarding Interest Payment On Convertible Notes

 

Dulles, VA, (February 16, 2005) – FLYi, Inc. (NASDAQ/NM: FLYI), parent of low-fare airline Independence Air, stated today that, because it is continuing to engage in negotiations with its aircraft lenders and lessors to restructure its obligations, it determined not to make the February 15, 2005 interest payment on its 6% Convertible Notes due 2034. Under the Note indenture, an “Event of Default” will not occur provided that the defaulted interest is paid within 30 calendar days. The company expects to pay the interest owing before the expiration of the 30-day period provided that it is able to successfully and timely conclude its ongoing restructuring efforts. As a matter of policy FLYi does not comment on or respond to speculation on the status of its restructuring efforts, but will provide a statement following determination of the outcome of the negotiations.

There is speculation that the restructuring negotiations will not produce results within the 30-day period and that there will therefore be a formal default at that stage, which may trigger Chapter 11 or the cessation of business.

 

But that is all it is - speculation - and we will have to see in due course.

[Guest nhrich]

Gotta love their thought process.

 

They can't fill regional jets, so they're getting rid of them to get bigger Airbuses.

 

Rich

[DanJ]

They are actually filling the Airbusses on the routes they use them on. They are expanding to the west coast, and cutting back on the RJ's. RJ's just aren't popular, and people don't want to sit on them for more than hour.

 

They announced yesterday that they reached agreements on a financial restructuring that will allow them to take delivery of 28 A319s in the next couple years. Hopefully they will get away from everything going through Dulles.

[Globaliser]

There are links to a couple of articles in this post. It doesn't look good. LF back below 70%, breakeven LF now quoted as "mid to high 70s".

[cruiseguy2]

I hope they stay in business. I don't fly Independence very often--because I use my FF miles through the big airlines (AA, UAL, US, etc.). But, my daughter (college student) recently jumped on their Summer Flying Program for $249. UNLIMITED flights on Tuesdays, Wednesdays, and Saturdays to anywhere east of the Mississippi River. All she has to pay is taxes each time. 20% off travel to the West Coast, too!

 

That's a pretty good deal if you travel alot---which she is going to.

 

-Chris

[Greyhound3]

All this makes me wonder, because Independence just started service to/from SJC this week.