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Posts Tagged ‘bankrupt’

On Sunday April 27th 2008 Eos Airlines, Purchase – New York based business class carrier, declared bankruptcy and stopped operations.

TICKET HOLDERS
All Eos ticket holders can get a special fare of GBP 799 one way fare from Heathrow to JFK, Newark, Boston or Washington on Virgin Atlantic. From US, the airline is offering fare of $1299 (including taxes and charges).

CLUB 48 Members
For our Club 48 members, unfortunately, in the face of this bankruptcy
filing, you will no longer be able to redeem your points for rewards.
Any value related to your membership will be determined by the court as
part of the bankruptcy process.

Facts about EOS (from here)-

  • The airline was founded in 2004 by Dave Spurlock, a former director of strategy at British Airways.
  • Company Slogan
    Uncrowded. Uncompromising. UNAIRLINE.
  • Fleet – 6 Boeing 757-200 with 48-seat all-business class configuration

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Asian Carrier, Oasis Hong Kong Airlines, a long-haul low-cost airline based in Hong Kong, canceled all its flights and went into liquidation on April 9th 2008. High jet fuel costs have been attributed as detrimental to its low-cost model.

Facts about the airlines (from here)-

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I saw an article in USA Today which tries to answer the question. The article says, that in some rare cases other airlines can honor the miles, but since most the the airlines that went bankrupt were small, it is most likely that the miles will be of no use. Frequent fliers (or business customers) might have better chance with other airlines, since other airlines might try to tap into their loyalty.

I did some research on the issue. Following are the frequent flier programs of the 3 prominent airlines that closed down their operations –

Aloha Airlines (from FAQs here)
Q: Can I continue to use my Aloha AirAwards credit card?
A: Yes. Your AirAwards card is still good for all purchases.
Q: If I have already redeemed AlohaPass Miles for United Airlines travel and it has already been ticketed, is it valid?
A: Yes and we recommend you contact United Airlines at 1-800-UNITED1 to reconfirm your reservation.
Q: Can I continue to redeem AlohaPass miles after March 31, 2008?
A: No, after March 31, 2008, the program will expire.

Q: If I have already redeemed AlohaPass miles for a hotel stay or car rental, etc. is my travel award still valid?
A: Your award is no longer valid.
Q: If I booked travel on United Airlines through the Aloha Airlines Web site, will my travel still be honored by United?
A: Yes. If you have already been ticketed and we recommend you contact
United Airlines at 1-800-UNITED1 to reconfirm your reservation.
Q: What happens if I booked future travel on United Airlines using my AlohaPass miles is my reservation still valid?
A: Yes. If you have already been ticketed and we recommend you contact
United Airlines at 1-800-UNITED1 to reconfirm your reservation.

ATA (taken from FAQ at their website)
12. What happens to the points earned by ATA Travel Awards members?
ATA’s frequent flier program and all accumulated Travel Awards Points will be
canceled.
13. Is there still an option to convert ATA Travel Awards Points to Southwest
Rapid Rewards credits?

All Travel Awards Points will be canceled; therefore, there will be no Travel Awards
Points to convert.


Skybus (taken from their website)
“Passengers holding reservations for Skybus flights scheduled to depart
on or after Saturday, April 5, 2008 should contact their credit card
companies to arrange to apply for a refund. More information for
customers and others will be made available on the Skybus web site
(www.skybus.com) as it becomes available.”

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Skyway Airlines, Miwaukee Wisconsin based US Airlines, that operated as Midwest Connect for Midwest Airlines announced that it has ceased operations starting April 5, 2008.

Facts –

Is this the next cycle of downturns for airlines?

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Skybus Shuts Down!

This might be the worst week for airlines, joining Aloha and ATA is Skybus Airlines that announced that is going out of business. It will seek bankruptcy protection next week.

Skybus, the Columbus Ohio based no-frills low cost airline, stopped service today (April 5th 2008).

Facts about Skybus Airlines

  • It was a privately-held airline based in Columbus, Ohio, USA
  • It started service on May 22 2007 as an ultra low cost carrier, aiming to be the cheapest airline in USA
  • Fleet – 13 Airbus 319 (with an order to buy another 65 from Airbus)
  • Financial State – It reported a loss of $16 mil for the first three months of service.
  • HubPort Columbus International Airport (earlier it was America West‘s Hub)
  • Other – They offered advertisement space on the exterior as well as interior of the aircraft.

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ATA Airlines announced today (April 3rd 2008) that it has filed for bankruptcy and discontinued all operations. The airlines suddenly shuts down! This is the second airline this week to go under after Aloha Airlines.

Reason stated –

  • Loss of key contract for military charter business

Facts about ATA

  • ATA was an American low-cost scheduled service and charter airline
  • Headquartered in – Indianapolis, Indiana
  • Operated in – US Mainland and Hawaii (also, military and commercial charter flights around the world)
  • Established in – August 1973 as American Trans Air (ATA)
  • Fleet – Being 737, 757, Lockheer Tristar and MD DC-10 (last two for Military Charters)
  • Focus AirportsChicago Midway International Airport, Honolulu International Airport and Oakland International Airport

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On April 2nd 2008, three hours before the deadline, Air France-KLM ended its efforts to acquire Alitalia due to failure to reach an accord with Alitalia’s trade unions. AF-KLM had submitted its final offer three weeks ago which was contingent on trade unions agreement, arguing that there can be no profitability without union’s support.

Next step – Alitalia might go bankrupt! Alitalia is currently losing $1.6 million a day. Alitalia had earlier said, it needed 750 mil Euros by mid-year to stay in business.

Air France’s bid has asked for following –

  • 2100 Job cuts
  • Elimination of Alitalia’s cargo business
  • Scaling back the maintenance unit
  • Eliminating some medium range jet before adding long-range planes.

For more read this and this.

Facts about Alitalia –

  • It is the flag carrier of Italy
  • Established in – September 16th 1946
  • Headquartered in – Rome
  • Destinations – Domestic – 28 and International – 74
  • Hub Leonardo Da Vinci International Airport,Rome (April 2008, downgraded Malpensa International Airport, Milan from a hub to to a focus city
  • Misc – The airline has lost money for years due to labor problems and government and political interferences.
  • Misc The airline has reported only one year of profit in 1998, since 1946!!!!

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