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.
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.
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