Independence urged to revive UAL relationship

[FDJ2]

Independence Air pressured-report

SAN FRANCISCO (CBS.MW) -- Independence Air has received a stern letter from its largest shareholder, demanding that the company revive a relationship with its former partner, United Air, to stave off bankruptcy, according to a published report Wednesday.

Boston-based investment entity Par Capital told the beleaguered carrier it has a "fiduciary responsibility" to avoid a bankruptcy filing, and that it cannot continue "blindly pursuing a strategy that will clearly require more financial resources" than the company has available, the Financial Times said, quoting the letter.

Earlier this year, Independence Air pulled out of its agreement with United Express, spurning a contract that offered it smaller margins, the FT said. Instead, the airline chose to operate its own low fare services out of Dulles, Va., where it is headquartered, the newspaper said.

United last week sought bids from 10 regional carriers to provide up to 70 jets for its United Express service. Par Capital, which owns 10 percent of Independence Air, is urging the company to make one of those bids, and go back to operating contract services for United, according to the FT.

Earlier this month, Independence Air warned that it might have to file for Chapter 11 bankruptcy protection unless it can defer or reduce an $83 million payment on 50-seat regional jets it now uses.

The company also said it defaulted on an $8.7 million payment to Airbus for delivery of the manufacturer's A319 aircraft, which will be used to carry passengers on longer-haul flights it has planned to the West Coast.

On Monday, Independence Air said in a filing that it had forged a new deal with Airbus, under terms of which it would take delivery of 10 A319 jets in 2007, not 2005 as planned earlier.

Shares of Independence Air (FLYI: news, chart, profile) rose 2 cents to close at $2.07 on Wednesday.

 

[House_X]

Great. We'll be the laughing stock of the industry "crawling" back to United. Time to update the ole resume...

 

[FDJ2]

Great. We'll be the laughing stock of the industry "crawling" back to United. Time to update the ole resume...

Laughing stock? I don't think so, particularly if it helps you avoid BK. With fuel prices at record levels and downward pressure on revenues, Indy needs to do what it has to in order to survive. It's just business, don't commit corporate hari kari because you are too proud to adjust your business plan for the time being. Perhaps it might be better to put off the independent LCC model for the time being, maybe have a hybrid plan that incorporates RJ feed for UAL and an independent Airbus focus city operation. There are a lot of possibilities and I'm sure Indy's management team is exploring them all.

 

[avrodriver]

This is taken off another board....don't know how creditable it is:


The stockholder mentioned in this article owns only 9% of the stock and purchased these shares just 2 weeks ago. Bought the stock well after they knew Indenpendence was in financial trouble. I bet the CEO and board of Independence aren't too concerned with this request.

 

[furloughed]

Great. We'll be the laughing stock of the industry "crawling" back to United. Time to update the ole resume...

You won't be crawling back, you will be saving your job. Take it from me it will be much better than lining up at the unemployment office with the dregs of society begging for you weekly stipend. This " I would rather stand alone and fail" attitude works fine until you are actually out of a job and it come times to feed the family. Anyone who works for Indy should of had their resumes updated months ago if not the summer of 2003 when the fine management of ACA came up with this plan. He11 anyone that works in this industry needs to have an updated resume.

 

[MetroSheriff]

At least it won't cost a lot to repaint when they rename it again.

They can just paint over the "IN"

 

[surplus1]

If Independence Air chooses to "bid" on the UAL RFP, all it needs to do is ensure that it can continue to pursue FLYi without interference for UAL.

All it need do is create a "subsidiary" that does the UAL flying and is separate from FLYi.

As long as your (Indy) management doesn't allow UAL pilots to dictate what it can do, there should be no problem at all.

 

[Always deferred]

What is it with you people? You all think you know everything. "You better go back to United or you'll cease existing!" Do you honestly think that going back to UAL is the best thing for FLYi??? They are Bankrupt and have been for 2 years. They have NO sound business plan. Oh yeah TED is great. Esp now that they are out trying to find the "voice of TEd" Give me a break. The only plan they have is to continue to slash their loyal employees' benefits. What makes this such a good deal? Maybe a couple years of revenue. Then UAL either is gone, or tries to phase out ACA again. I dont think so. I would rather risk failure as FlyI than be guaranteed eventual failure as United Express.

Mr big investment man should crawl back under the little hole he came from. Just as we resisted MESA Im sure you will see a firm stance by the FLYi Pilot group aganist any attempt to reunite w/ UAL. The only good deal that can come out of this is for concurrent operations (as in keeping a good Independence Air operation separate from the pathetic farce known as UAL Express) I will take no more concessions to aid my company in bidding for this flying. It's time to take a stand.

 

[MetroSheriff]

Mr big investment man should crawl back under the little hole he came from. Just as we resisted MESA Im sure you will see a firm stance by the FLYi Pilot group aganist any attempt to reunite w/ UAL. ..... It's time to take a stand.

Firm stance? What does that mean?

I think you under the mistaken impression that the pilot group some how makes strategic decisions for the corporation.

 

[Dave Benjamin]

Great. We'll be the laughing stock of the industry "crawling" back to United. Time to update the ole resume...

Don't think if it that way. Look at it as a "return to the core business" or a "strategic adjustment." I'd rather see FlyI back in the UAX biz versus Mesa picking up more flying. Whatever happens I hope everyone at AWAC keeps their job.