FlyI Files Ch. 11 BK

[SWAInflt]

NEW YORK, Nov 7 (Reuters) - FLYi, Inc. (FLYI.O: Quote, Profile, Research), parent of low-fare carrier Independence Air, on Monday said it and its subsidiaries filed to restructure aircraft leases and other obligations under Chapter 11 of the U.S. Bankruptcy Code.
The company also said it would request court approval to engage in a formal court-supervised auction process to seek assistance to continue its operations.

 

[Hung Start]

Sorry for all those who put their sweat into it,,, but in my opinion it is just time to get rid of excess seats. Bye bye,,, FlyI

I think most investors will see this as the first of a few that just are not worth throwing money at.

 

[lowecur]

Chapt 11 liquidation

This is probably your classic Chapt 11 liquidation. In other words, the airline continues to function while parts are sold off. It's hard to believe they have anything left to sell, as GE gobbled up most of the assets. DIP is a non issue, so unless some white knight comes along, FLYi should be out of business by the end of the year.

Good luck to the employees.

 

[Daddy]

Gates at IAD are all that's left of value that I can think of...

 

[BLUE BAYOU]

That White Knight might in the form of Virgin America!!! They'll probably off the CRJs and keep the 319s... It looks like JBLU has taken quite a few ACA/FlyI folks these past few classes too...

 

[radarlove]

This is probably your classic Chapt 11 liquidation. In other words, the airline continues to function while parts are sold off. It's hard to believe they have anything left to sell, as GE gobbled up most of the assets. DIP is a non issue, so unless some white knight comes along, FLYi should be out of business by the end of the year.

Good luck to the employees.

You know, I try not to jump on you like the other guys, since you're not an industry insider, but where in the world did you come up with "classic chapt 11 liquidation?"

That's just a stupid statement. Corporate bankruptcy is seperated into Chapter 7 (liquidation) and Chapter 11 (reorganization) and they do not cross paths unless a Chapter 11 is converted into a Chapter 7.

These guys filed Chapter 11. A trustee might get appointed and it might get converted to a Chapter 7, but still, why do you act like an expert and type in such silly stuff on a public message board?

 

[GuppyPuppy]

Didn't the company have well over $400,000,000 in cash when they started out 17 months ago? That's over 3 times as much money as JB started with.

I'm sorry for those employees who put a lot of hard work into Skeen's idea. Too bad it didn't work out. Hopefully most of you will find a better job elsewhere.

Good luck to all the FLYI guys and gals.

GP

 

[lowecur]

Another lummox without a clue

You know, I try not to jump on you like the other guys, since you're not an industry insider, but where in the world did you come up with "classic chapt 11 liquidation?"

That's just a stupid statement. Corporate bankruptcy is seperated into Chapter 7 (liquidation) and Chapter 11 (reorganization) and they do not cross paths unless a Chapter 11 is converted into a Chapter 7.

These guys filed Chapter 11. A trustee might get appointed and it might get converted to a Chapter 7, but still, why do you act like an expert and type in such silly stuff on a public message board?

This from a bankruptcy attorney:

"The idea behind a Chapter 11 liquidation is to have an orderly disposition of the company's assets with the help of management instead of a fire sale on the courthouse steps," said William Zewadski, a Tampa, Fla. attorney who specializes in bankruptcy issues for the American Bar Association. "But sometimes the (management) just wants to try to milk the company's assets one last time."

:smash: imp: :laugh:

 

[SWAPoolie]

Didn't the company have well over $400,000,000 in cash when they started out 17 months ago? That's over 3 times as much money as JB started with.

I'm sorry for those employees who put a lot of hard work into Skeen's idea. Too bad it didn't work out. Hopefully most of you will find a better job elsewhere.

Good luck to all the FLYI guys and gals.

GP

$250 million with 87 RJs and 20+ dornier jets and 20+ J41s

Problem is all those planes eat up $250 mil pretty fast. At least jetBlue was smart enough to start out with just a few planes. Skeen said he wouldn't have done it if he had the choice but UAL forced him to start with 87 aircraft. It's horsesh!t because at that point MESA, Whiskey and the rest were buying 50 seat RJs. Skeen was greedy and arrogant and now it's bit him in the ass.

 

[Dizel8]

Skeen was greedy and arrogant and now it's bit him in the ass.

Or maybe he just wanted to get out from under the thumb of UAL, after all, they are pretty good a whipsawing the feeders against each other and maybe, just maybe, he believed it possible that FlyI could stand on its own.

Who knows, had fuel not taken off, they may have been more successfull.

 

[SWAPoolie]

Or maybe he just wanted to get out from under the thumb of UAL, after all, they are pretty good a whipsawing the feeders against each other and maybe, just maybe, he believed it possible that FlyI could stand on its own.

Who knows, had fuel not taken off, they may have been more successfull.

I worked there. The plan was predicated on $30/barrel fuel but that's not the whole part. The RJs cost per seat mile was predicted to be 11 cents. While that doesn't seem like much it is. It was 11 cents if the aircraft were full every day which had 15 plus flights to each destination sold only on the flyi website.

There was alot of arrogance involved and it led to the demise of the airline.

 

[G4G5]

I have to side with Lowcur. It's quite apparent from the timing that they have no intension of reorganization. If they had wanted to try and save the company they would have filed prior to the 10/17 law change (like NWA and DAl did) Once the BK laws went into effect I air lost all of their leverage. Form here on in it just a matter of putting the remainng assets up for sale and slowly part out the airline (like Pan Am did).

I feel for the Iair folks, good luck.

 

[canyonblue]

Independence Air Bankruptcy Should Benefit Industry

By Ann Keeton, Of DOW JONES NEWSWIRES

CHICAGO -(Dow Jones)- To no one's surprise, FLYI Inc. (FLYI), which operates low-cost airline Independence Air, filed for Chapter 11 bankruptcy protection in Delaware Monday.

As former regional contractor Atlantic Coast Airlines, the airline was a partner with United Airlines, a unit of UAL Corp. (UALAQ), and Delta Air Lines Inc. (DAL). The carrier last year became an independent airline with a hub at Dulles International Airport outside Washington D.C.

But, in a tough competitive environment, and with rising fuel cost, the airline's business plan never got off the ground.

Analysts said Monday that the airline's plan in bankruptcy - to auction off its assets - will benefit East Coast competitors.

Analyst Gary Chase at Lehman Brothers said Monday that, with domestic airline capacity expected to shrink 3% or more in 2006, he is changing his view on the sector to positive from negative.

The FLYI bankruptcy is different from other airline bankruptcies, he wrote, because there won't be a protracted reorganization. FLYI plans to sell its assets by Jan. 5, 2006.

"We see two possible outcomes," Chase wrote Monday. "The first would be for existing industry players to purchase selected assets of the company and grow into some of the void created by FLYI in Washington." Two likely buyers would be JetBlue Airways Corp. (JBLU) or AirTran Holdings Inc. (AAI). Or, Chase wrote, several potential startup airlines may look at acquiring FLYI's assets, which include its legal operating certificate, facilities, aircraft and trained employees.

The biggest beneficiaries of the bankruptcy, Chase wrote, are US Airways Inc. (LCC), AirTran, JetBlue and Southwest Airlines Inc. (LUV).

FLYI said Monday it will continue to operate normal passenger service. The airline said it needs to conserve cash while it finds a buyer.

The carrier operates a fleet of 62 aircraft, including 50 regional jets, with more than 3,200 employees.

In a statement, Chief Executive Kerry Skeen said high fuel prices and weak revenue prevented the airline from meeting its operational goals. During its short lifetime, the airline struggled to fill seats of its regional jets, even though fares were competitive with low-cost rivals.

Analyst Ray Neidl at Calyon Securities said investors have been expecting a FYLI bankruptcy, since the shares have traded below $1 for some time.

"We did not believe that FLYI's model of using regional jets as a low-cost airline was ever feasible," he wrote, because of the relatively high cost of operating a regional jet. "The only way we saw any potential value for stockholders was if the company went back to being a regional feeder airline."

The FLYI bankruptcy will benefit direct competitors, Neidl wrote, but he isn't optimistic about long-term capacity reduction in the U.S. Current capacity reduction will be replaced by regional jet flying, or the expansion of low-cost carriers, the analyst wrote.

 

[General Lee]

Sad for employees, but good for everyone else. Their fare pricing was desperate to say the least, and even Joe Leonard from Airtran said the Indy pricing was "Irresponsible." This could bring yeilds back up, and we will have to wait to see who will fill in the space at IAD. I think the stock offering at Jetblue today (for $175 million) gives us a possible answer. I see them possibly buying up the gates and moving in with E190s and A320s. I don't know if the Indy A319s are leased or owned--but they may go to China or the highest bidder if they are leased. Good luck to those employees.

Bye Bye--General Lee

 

[seahorse]

They are so gone.

 

[Flying Freddie]

I think the stock offering at Jetblue today (for $175 million) gives us a possible answer. I see them possibly buying up the gates and moving in with E190s and A320s. I don't know if the Indy A319s are leased or owned--but they may go to China or the highest bidder if they are leased.

Bye Bye--General Lee

Mmmmmmmm!!!

 

[radarlove]

Lowcur,

You're still an idiot. Do you seriously not understand the difference between a liquidation and a reoganization? Why don't you go look up bankruptcy law and get back to me.

Flyi is not "liquidating", at least not yet. They are under Chapter 11, not Chapter 7. They may auction off pieces (or the whole), but that is a far cry from "liquidating". They might still liquidate, but per usual, you've stuck your nose into an issue you do not have sufficient familiarity with.

Before you respond, please go check out bankruptcy law first.

 

[Ty Webb]

even Joe Leonard from Airtran said the Indy pricing was "Irresponsible."

General, our pricing at AirTran is "responsible" pricing, because we make money at our prices.

One could certainly say that Delta's pricing has been irresponsible, since they were selling seats at prices below the cost of flying those seats.

 

[radarlove]

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.

Oh yeah, lowcur, how exactly does "continue its operations" equal "liquidation"?

I'm not arguing that they won't eventuall convert to Chapter 7, but there is no such thing as "Chapter 11 liquidation".

 

[lowecur]

Lowcur,

You're still an idiot. Do you seriously not understand the difference between a liquidation and a reoganization? Why don't you go look up bankruptcy law and get back to me.

Flyi is not "liquidating", at least not yet. They are under Chapter 11, not Chapter 7. They may auction off pieces (or the whole), but that is a far cry from "liquidating". They might still liquidate, but per usual, you've stuck your nose into an issue you do not have sufficient familiarity with.

Before you respond, please go check out bankruptcy law first.

I know, you were born breached and fell on your head, and then you were breast fed till you were 23. Tell your wife or girlfriend to burp you and put you to bed.

imp: :nuts:

 

[radarlove]

I know, you were born breached and fell on your head, and then you were breast fed till you were 23. Tell your wife or girlfriend to burp you and put you to bed.

imp: :nuts:

Translated: "I hate being pointed out an idiot, so I'll throw a tantrum rather than admit that I lecture on a lot of subjects on which I am unfamiliar."

Next up comes the, "I'm sick of arguing about this, I'm not going to reply anymore" answer.

Let me know if you need any links to bankruptcy law, I assume you are not familiar enough with search engines to be able to find them on your own.

"Classic Chapter 11 liquidation", you are funny, funny. Ok, actually you are stupid, stupid, but pretty much everyone here has figured that out already.

 

[lowecur]

Oh yeah, lowcur, how exactly does "continue its operations" equal "liquidation"?

I'm not arguing that they won't eventuall convert to Chapter 7, but there is no such thing as "Chapter 11 liquidation".

Bedtime story:

Yes Virginia there is a Santa Claus.....Chapt 7 does exist. But you also have to understand as the legal community does that you can use Chapt 11 reorganization to sell your assets and linger awhile longer........this is known as a "Chapt 11 liquidation." It will never appear in the court documents as a liquidation, but rest assured the term and practice is well known throughout the Bankruptcy Legal Community. Don't believe me????????....Type in a Google Search for Chapt 11 liquidation and read some of the articles.

By the way, Kerry Skeen is just biding his time hoping that a sugardaddy will come out of the woodwork. My guess is the airline industry will just let Flyi die a natural death rather than prolong the agony any further through the purchase of the existing assets in the next couple of months.

Are you asleep yet?

 

[Crucianpilot]

Ty, General Lee's post said Leonard was talking about Indy air's pricing being irresponsible, not Airtran's pricing.

 

[lowecur]

Translated: "I hate being pointed out an idiot, so I'll throw a tantrum rather than admit that I lecture on a lot of subjects on which I am unfamiliar." Tantrums are good for stress.

Next up comes the, "I'm sick of arguing about this, I'm not going to reply anymore" answer. "Im sick of arguing about this, I'm not going to reply anymore.

Let me know if you need any links to bankruptcy law, OK. I assume you are not familiar enough with search engines to be able to find them on your own. Tell me about search engines as I need a new one. Do you know where I can get a good deal on spark plugs?

"Classic Chapter 11 liquidation", you are funny, funny. Actually, I'm a scream. Ok, actually you are stupid, stupid, Ooooooo, you are such a vicious person but pretty much everyone here has figured that out already.

......

 

[Traderd]

Oh yeah, lowcur, how exactly does "continue its operations" equal "liquidation"?

I'm not arguing that they won't eventuall convert to Chapter 7, but there is no such thing as "Chapter 11 liquidation".

Perhaps you should notify the Washington State Bar about this fact - it appears one of their own is taking credit for participation in a couple of them as noted here:


http://www.prestongates.com/people/profile.asp?id=105

Marc L. BarrecaPartner
Finance, Insolvency and Real Estate, Energy and Utilities, Global Telecom and Media


Representation of T & W Financial Services in its Chapter 11 liquidation
Representation of Jay Jacobs, Inc. in its Chapter 11 liquidation
Representation of Garden Botanika, Inc. in its Chapter 11 liquidation

as differentiated from the chapter 11 reorganization:


Representation of VECTRA Technologies, Inc., a nuclear technology contractor, in its Chapter 11 reorganization
Representation of Engle Farms dairy in its Chapter 11 reorganization
Representation of WinterBrook Corporation in its Chapter 11 reorganization

Semantics? I don't know. But I see his credentials and I'm guessing he would have a good idea on the proper wording in a listing of his "representative cases." I would hate to think he is claiming participation in an event that doesn't exist.

Perhaps you can contact his firm at the address or numbers provided and inform them of this discrepancy.

 

[SWPA Pilot]

So when will the last FlyI flight take place?

 

[radarlove]

Perhaps you should notify the Washington State Bar about this fact

Um, ok. Let's take an attorny's marketing material and argue it as the law of the land. Not.

Ya can't file Ch.11 to liquidate, per the meaning of the term "liquidate". They're two seprate animals. You can unwind and preserve value by selling whole chunks (or the whole), but that is not "liquidation".

Arguing semantics with pilots gets to be a bit of a chore, but the fact that some lawyer used a shorthand term the a layman might understand does not change the fundamental difference between Ch. 7 and Ch. 11. There really is a difference--it involves involving a trustee to "liquidate", or allowing the debtor to remain in possesion (as in "DIP") to preserve as much value as possible.

A company files Ch.11 to AVOID FORCED LIQUIDATION, or that liquidation that would be brought on by creditors wanting their money now. That's why it's called "bankruptcy protection", because under Ch. 11 you are protected from creditors seizing assets (except, notably, aircraft, train cars and a couple of other exceptions).

Do I think that Flyi will eventually shut down and the parts sold off? Yep.

But there is a fundamental difference between how the two Chapters of the law work and it gives the folks who work at Flyi a disservice to make pronouncements that are incorrect.

Here's my prediction: the auction process will not work, the creditors will file a petition for a Trustee to be appointed and to have the case converted to Ch. 7 and liquidation will commence.

The auction process, at least according to the press release, is currently designed to preserve value by keeping the company operating. That, again, is a fundamental difference from "liquidation".

Oh yeah, lowcur is still an idiot.

 

[Ty Webb]

Ty, General Lee's post said Leonard was talking about Indy air's pricing being irresponsible, not Airtran's pricing.

Uh, that's a big 10-4 there, Rubber Duck, but there was an implication inherent in his statement that I guess you missed.

The part I was responding to was the General's assertion that "even Joe Leonard called the pricing irresponsible".

Which would be like saying, "Even Bozo thought Chuck Yogurt was a clown" or "Even Homer Simpson found him cartoonish".

 

[General Lee]

General, our pricing at AirTran is "responsible" pricing, because we make money at our prices.

One could certainly say that Delta's pricing has been irresponsible, since they were selling seats at prices below the cost of flying those seats.

Well, ok, then. What? It is tough to do that when you don't have the pricing power anymore in ATL. We are in the middle of major pay cuts---so I guess you are happy we are getting our costs in line to fight you guys? After we go lower than you, maybe your company will force you to do the same, right? That would be great TY!!!! I can't wait to see that.


Bye Bye--General Lee

 

[Patriot328]

For Indy's pricing being irresponsible, yeah well it was. Go take a look at what Valutran's initial fares were like out of ATL (to IAD no less) and see how irresponsible those were as well.

*drumroll* $29.....

EDIT: OOPS I could only find a $51 fare (some $35 for students as well)

http://web.archive.org/web/19970213064332/www.valujet.com/atlf.html


And let us not forget WN's $19 fun fares back in the 80s.. even counting inflation, those were pretty freakin low.

Problem wasn't the low fares per se, but the inability to build up a customer base that would tolerate higher prices. Boyd was right, a lot of the growth in traffic that will disappear when ultra low fares disappear as well.

Those fare sales weren't really the problem. It's the capacity of the system that will not allow a fare increase to stick and still have the loads to make a profit.