2004-02-10
By Adam Wilmoth
The Oklahoman
TULSA -- A Great Plains Airlines creditor has asked a bankruptcy judge to force the airline to return its remaining operational aircraft.
One industry observer said that if the move is successful, it could force Great Plains into liquidation.
Wings Aircraft Finance and its servicer, Debis AirFinance USA Inc., have said the airline owes them $384,691 in lease payments, interest and maintenance for two of three Fairchild Dornier 328 propjets. Court documents say the third aircraft is being held by a repair shop for an unpaid repair bill.
The airline's other two aircraft -- Fairchild Dornier 328 jets -- have been grounded since December because of an engine maintenance delay.
Wings and Debis said in court documents that Great Plains has failed to make complete and on-time payments since October. Debis said it faxed three separate letters to Great Plains on Jan. 23, terminating the carrier's leasing rights and demanding the immediate return of all three of its aircraft. The faxes were time stamped 1:03 and 1:05 p.m. EST, according to court documents.
Great Plains filed for Chapter 11 bankruptcy protection about three hours later, according to court documents. The finance companies argue that bankruptcy protection does not apply to the leases because they were terminated before Great Plains filed its bankruptcy papers.
Wings and Debis also argued that the planes should be returned even if the judge does not agree that the leases were terminated before the bankruptcy papers were filed because Great Plains has not maintained accounts designed to protect Wings in the event that additional maintenance is required for the aircraft and Great Plains is unable to pay for the service. The companies asked for a hearing Feb. 17.
Great Plains Chief Executive Officer David Johnson declined to comment on legal aspects of the proceedings but said he believes the airline should be able to retain all its aircraft throughout the bankruptcy.
"I think they (Wings and Debis) are taking steps they believe are necessary to protect their legal position," he said. "I think this is a normal part of the bankruptcy proceeding."
Johnson also declined to comment on what affect a successful motion to repossess the aircraft would have on the carrier. He downplayed the possibility and said Great Plains is continuing its negotiations with Wings and Debis on a deal to lease four more propjets beginning as early as next month.
Great Plains canceled all commercial service after it filed for Chapter 11 bankruptcy protection last month, saying it is not feasible to continue the service with two working aircraft while in bankruptcy proceedings. Johnson has said the airline must secure additional aircraft before it can expand and resume its service. He said Monday the company still plans to achieve that goal.
"We are still working very hard to return to scheduled service in the March or April time frame," he said.
MidAmerica St. Louis Airport Director Tim Cantwell, however, was less optimistic. He said a successful motion by Wings and Debis could be devastating for the Great Plains.
"If this hearing goes through and the bankruptcy judge says yes, he'll give the airplanes back, then I think Great Plains ceases to exist," Cantwell said.
The airline expanded its service to the St. Louis area, Chicago and Washington in November after receiving a $1.35 million incentive deal from St. Clair County, Ill., to take the flights through MidAmerica Airport.
Great Plains canceled regular commercial service when it filed for bankruptcy last month, but it continues to use the leased propjets to operate its charter service for Big 12 basketball teams and other groups. If the court orders the aircraft returned, the airline would likely have no aircraft available to continue the charter service.
The carrier declined to disclose its charter customers, but university officials confirmed Monday that the Oklahoma State University men's and women's basketball teams use the service.
University of Texas officials also confirmed that its women's basketball team has used Great Plains for some of its trips in the past, but that it plans to use other carriers for the rest of the season.
By Adam Wilmoth
The Oklahoman
TULSA -- A Great Plains Airlines creditor has asked a bankruptcy judge to force the airline to return its remaining operational aircraft.
One industry observer said that if the move is successful, it could force Great Plains into liquidation.
Wings Aircraft Finance and its servicer, Debis AirFinance USA Inc., have said the airline owes them $384,691 in lease payments, interest and maintenance for two of three Fairchild Dornier 328 propjets. Court documents say the third aircraft is being held by a repair shop for an unpaid repair bill.
The airline's other two aircraft -- Fairchild Dornier 328 jets -- have been grounded since December because of an engine maintenance delay.
Wings and Debis said in court documents that Great Plains has failed to make complete and on-time payments since October. Debis said it faxed three separate letters to Great Plains on Jan. 23, terminating the carrier's leasing rights and demanding the immediate return of all three of its aircraft. The faxes were time stamped 1:03 and 1:05 p.m. EST, according to court documents.
Great Plains filed for Chapter 11 bankruptcy protection about three hours later, according to court documents. The finance companies argue that bankruptcy protection does not apply to the leases because they were terminated before Great Plains filed its bankruptcy papers.
Wings and Debis also argued that the planes should be returned even if the judge does not agree that the leases were terminated before the bankruptcy papers were filed because Great Plains has not maintained accounts designed to protect Wings in the event that additional maintenance is required for the aircraft and Great Plains is unable to pay for the service. The companies asked for a hearing Feb. 17.
Great Plains Chief Executive Officer David Johnson declined to comment on legal aspects of the proceedings but said he believes the airline should be able to retain all its aircraft throughout the bankruptcy.
"I think they (Wings and Debis) are taking steps they believe are necessary to protect their legal position," he said. "I think this is a normal part of the bankruptcy proceeding."
Johnson also declined to comment on what affect a successful motion to repossess the aircraft would have on the carrier. He downplayed the possibility and said Great Plains is continuing its negotiations with Wings and Debis on a deal to lease four more propjets beginning as early as next month.
Great Plains canceled all commercial service after it filed for Chapter 11 bankruptcy protection last month, saying it is not feasible to continue the service with two working aircraft while in bankruptcy proceedings. Johnson has said the airline must secure additional aircraft before it can expand and resume its service. He said Monday the company still plans to achieve that goal.
"We are still working very hard to return to scheduled service in the March or April time frame," he said.
MidAmerica St. Louis Airport Director Tim Cantwell, however, was less optimistic. He said a successful motion by Wings and Debis could be devastating for the Great Plains.
"If this hearing goes through and the bankruptcy judge says yes, he'll give the airplanes back, then I think Great Plains ceases to exist," Cantwell said.
The airline expanded its service to the St. Louis area, Chicago and Washington in November after receiving a $1.35 million incentive deal from St. Clair County, Ill., to take the flights through MidAmerica Airport.
Great Plains canceled regular commercial service when it filed for bankruptcy last month, but it continues to use the leased propjets to operate its charter service for Big 12 basketball teams and other groups. If the court orders the aircraft returned, the airline would likely have no aircraft available to continue the charter service.
The carrier declined to disclose its charter customers, but university officials confirmed Monday that the Oklahoma State University men's and women's basketball teams use the service.
University of Texas officials also confirmed that its women's basketball team has used Great Plains for some of its trips in the past, but that it plans to use other carriers for the rest of the season.
