Posts Tagged ‘Bankruptcy’

Bad news for American Airlines’ Advantage program members, as the airlines is cutting some popular routes. Starting March 1st 2012, Airlines will stop flying the 14-hour direct flight from ORD-DEL-ORD.

Also, they will stop flying to Burbank, California.

The historical financial performance of the route and its future outlook given the global economic climate and high oil prices has resulted in a decision by American to cancel its New Delhi (DEL) – Chicago O’Hare (ORD) service.

o The last flight to leave for India from Chicago will be on February 28, 2012, while the last return flight from India to Chicago will operate on March 1, 2012.

o AA will continue to offer travel choices between the U.S. and India in conjunction with oneworld partners British Airways, Kingfisher Airlines and Finnair, via either London Heathrow or Helsinki (summer only), and through its codeshare partner Jet Airways via Brussels.

o The route is operated by three-class Boeing 777-200 aircraft.

DFW-Burbank Service

o Flights between DFW and Burbank will be cancelled effective Feb. 9, 2012.

o Unfortunately, the cancellation of the DFW-BUR flights will result in AA exiting the Burbank market and closing operations at the BUR station.

o Customers can continue to reach Burbank as a destination by flying into Los Angeles, one of American’s cornerstone markets.

o American does not maintain employees in Burbank, as ground handling operations are provided by a third party, Airport Terminal Service.

From Dallas News

Makes me wonder, at this pace, if the Airlines will go from World’s largest airlines to smallest?



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On Monday, October 6th 2008, Sun Country Airlines, Mendota Heights Minnesota based airline, filed for Chapter 11 bankruptcy. Last week, I had blogged about the WARN email to their employees and a possible cash crunch. Couple of days back, the parent company, Petters Group Worldwide, “became the target of a federal probe for allegedly defrauding hedge funds“. CEO and Chairman Stan Gadek said that the airline plans to continue on its normal operations. Please note – Chapter 11 bankruptcy allows a company to reorganize its finances with protection from creditors.

The airline was already going through a finance crunch and was trying to bridge in some credit from the current slow times to the profitable winter months. The airline is a small carrier with 9 Boeing 737, but does employ 858 to 1110 workers (normal to peak periods). On a happy note, the airline did not cease to exist and passengers will definitely not be affected!

From Wall Street Journal

Sun Country had planned on a short-term bridge loan from its owner to
get through the slow autumn period and into its heavy winter travel
But that plan fell through after the parent company ran into legal
troubles. Over the weekend, Stan Gadek, Sun Country’s chief executive,
learned that federal authorities were thinking of putting the Petters
companies into receivership. To avoid that fate and keep control of the
airline, which isn’t being investigated by prosecutors, his board voted
to seek court protection instead, Mr. Gadek said.
The airline chief said Monday that Sun Country doesn’t expect any
disruptions because of the bankruptcy filing, which also includes its
parent, Petters Aviation LLC.
“I think it’s a positive move,” Mr. Gadek said. “It removes the
uncertainty and distraction” for employees, customers and airline
vendors. “It’s my goal to attract new capital and ownership to this
company,” he said. “Our business model is not broken. We made money in
July and August.” The companies filed in U.S. Bankruptcy Court in

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With Delta Air Lines potentially ending the service agreement with Mesa Air Group (MAG) for 34 ERJ, MAG may have to file for Chapter 11 bankruptcy protection.

From ATWonline –

“Delta notified MAG in late March
that it would terminate its agreement with Mesa subsidiary Freedom
Airlines, claiming that it failed to meet specified completion rates (ATWOnline, April 3).
Mesa denied the charge and filed a breach of contract lawsuit asking
for a preliminary injunction to prevent what it considered “wrongful
termination” of the agreement. A hearing is scheduled May 27-29 with a
ruling expected at the end of the proceedings.”

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The 5 bankruptcies (4 US Airlines and 1 Hongkong based Airline) has turned beneficial for private airlines in India. The airlines are negotiating for aircrafts and pilots at low costs from the bankrupt airlines.

Highlights –

  • GoAir is negotiating 20 Airbus aircrafts at 20% below listed rates.
  • SpiceJet has decided to hire at least 10 pilots.

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The rising fuel prices have found yet another victim – Frontier Airlines, Denver, Colorado based budget carrier, filed for bankruptcy protection, but promised to continue normal operations.

The airline attributed the bankruptcy to its major credit card processor – “Our principal credit-card processor very recently and
unexpectedly informed us that, beginning on April 11, it intended
to start withholding significant proceeds received from the sale
of Frontier tickets

Sean Menke, Frontier president and chief executive officer said in a statement – “To be clear, we filed for very different reasons than those of other
recent carriers, and our customers and employees can be confident that
we intend to keep on flying and providing outstanding service and
products,”. He promised to continue “normal
operations throughout our reorganization process.”

Please note, the airline is operating its full schedule of flights. So, Frontier passengers are unaffected with this latest development and there is nothing to worry!!!

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