indy air to defer airbii deliveries until 2007

[smellthejeta]

Washington Post is reporting that FlyI is deferring the 10 airbii deliveries scheduled for 2005 until 2007 and deny any intent to return to their roots as a feed for UAL.

 

[General Lee]

So, they are sticking with the higher cost RJs and giving up on the A319s for a couple years? What? They need those Airbus planes to compete with United....What about their 2 A319s they already have? Will they still fly those?



Bye Bye--General Lee

 

[climbhappy]

why not use some of the 55 or so 737-200s from Delta coming off lease or the others in the desert. Even in the high 20's, you can still burn 6000 lbs an hour , albeit a little slower, but who cares. With the stage lengths they fly anyway, they're already on the arrival going down after 30 minutes .

 

[BE99chick]

Here's the article

Flyi Delays Buying Airbus Jets



By Bill Brubaker
Washington Post Staff Writer
Tuesday, November 16, 2004; Page E01



Flyi Inc., parent of struggling low-cost carrier Independence Air, yesterday announced plans to delay acquisition of 10 new Airbus jets, a money-saving move the company hopes can help avert a bankruptcy filing.

Shares of Flyi jumped 54 percent yesterday on news the airline had struck a deal with Airbus to take delivery of the 10 jets in 2007, instead of 2005, as it had planned.

The Dulles-based carrier said the amended purchase agreement will assist "the company's efforts to address its liquidity problems," according to a filing with the Securities and Exchange Commission.

"This is good news for Independence Air," said Darryl Jenkins, visiting professor at Embry-Riddle Aeronautical University in Daytona Beach, Fla. "This gives them some cash and gives them some breathing room, and that's what they need."

Last week, Flyi said in its quarterly SEC filing it will be "forced to consider" a Chapter 11 bankruptcy filing if it could not renegotiate payments of $83 million that it will owe in January on regional jet leases. Flyi blamed unexpectedly high fuel costs and "fierce competition" from larger airlines for revenue shortfalls.

Flyi did not disclose in yesterday's SEC filing how much money it will save by not taking delivery of the 10 jets next year. Rick DeLisi, the company's spokesman, declined to comment, except to say, "This is a positive step. We are in an active and ongoing process," trying to reduce debt.

Meanwhile, Goldman Sachs & Co. suggested yesterday that Flyi might be better off returning to its roots as a regional carrier.

Until recently, the company received a fixed fee for operating regional feeder jets for United Air Lines and Delta Airlines. It switched to the low-fare model in June, announcing plans to become a national carrier with service as far afield as the West Coast.

Goldman Sachs analyst Glenn Engel upgraded Flyi from "underperform" to "in line" on the possibility it may accept an invitation from United Airlines to bid on routes currently flown by one of United's regional feeder carriers, Air Wisconsin, which has a large presence at Dulles, operating under the brand United Express.

"Given its large losses, Independence . . . may have to reverse its strategy of reincarnating as a low fare airline and return to its fee for departure routes," Engel wrote.

DeLisi said Flyi has no plans to abandon its low-cost model.

Since its inception in June, Independence has used the same 50-seat regional jets it once operated for United. But the carrier also trumpeted its plans to acquire 28 Airbus A319 jets through a combination of purchase and lease over the next two years. Flyi took delivery of two Airbus jets this year and had contracts to acquire two more this year, 18 next year and six in 2006.

But plans to unveil the first two Airbus jets on Nov. 2 -- on new routes from Dulles to Tampa and Orlando -- were foiled when Flyi did not receive certification from the Federal Aviation Administration to operate the A319s. DeLisi said yesterday that Flyi is "very close" to getting certified.

Flyi also disclosed in last week's SEC filing that it had defaulted on an $8.7 million payment to Airbus. Yesterday, Flyi said the new deal with Airbus "eliminates the default."

DeLisi said Flyi still plans to either buy or lease the total of 28 jets. According to yesterday's SEC filing, it will accept delivery of 10 by May.

Flyi shares yesterday closed at $1.89, a gain of 66 cents, on the Nasdaq Stock Market.

 

[Lancair]

Yes we're still flying the 2 319's we have. They are finishing up proving runs this week and should be online soon. As far as the 2005 aircraft, they moved them to 2007 delieveries so that we can have more cash now. If you read the fineprint of the agreement we can get those aircraft back in 2005. It just means we have to pay airbus less on the predelievery payment that was due on the 10th.

 

[AirBoard]

So, they are sticking with the higher cost RJs and giving up on the A319s for a couple years? What? They need those Airbus planes to compete with United....What about their 2 A319s they already have? Will they still fly those?



Bye Bye--General Lee

I think our hands are tied. I agree we need those Airbus but we don't have the cash to support all the deliveries - a real Catch 22. The market agrees this is the thing to do as the stock went up - it buys some time. The real downer is for the crews, those that are getting furloughed will be away longer, those waiting for some growth or upgrade will be waiting......By 2007 I'll be a 7 year CRJ FO. Looking at other career options now.

 

[Lequip]

Moot Point. Indy Air wont be around in 2007.

 

[Indypilot]

General, these were the purchased airbusses. The 12 leased birds are still being delivered per the original delivery schedule (oct 04-may 05). So we will have 12 birds by May, then we moved the rest of the 05 deliveries to 07 with the option to turn 5 of those into leases instead of purchases and retain the orginal delivery slot in 05.

This deferres the deposits that are required to purchase until late 05 for the 06 deliveries which didn't get touched. We also have 49 options that can fill in the holes between may 06 to jan 07 when the 5 or 10 get delivered.

We had no choice in the matter, I think they did a pretty good job of keeping as many as possible and giving us a chance to succeed with the first 12, keeping an option open for another 5, and being able to plug other holes down the road. If it works cool, if not, oh well.

I would much rather be bleeding with ability to get stiches and other patches, vs walking around fat dumb and happy, and then having our head removed highlander style by papa.

 

[Always deferred]

Moot Point. Indy Air wont be around in 2007.

Nice attitude. Happy to share the sky with you. You reap what you sow my friend.

 

[neflier]

Nice attitude. Happy to share the sky with you. You reap what you sow my friend.

I've heard many guys here at Indy talk about how a USAir Ch 7 will help us. Don't you see the hypocrisy in this? We openly speculate on the failure of another carrier, while getting our panties in a wad when others speculate about our future. Maybe WE are about reap what we have sown.