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Low-fare airline to shut down Thursday

Independence Air, which filed for bankruptcy protection in November, can't find an investor or buyer. It had two local flights a day.

By wire services
Published January 3, 2006

WASHINGTON - Less than 19 months after Independence Air took to the skies, the low-cost carrier has said it will shut down at 7 p.m. Thursday.

"We are voluntarily discontinuing scheduled service," Kerry Skeen, Independence Air's chairman and chief executive officer, said Monday.

The financially troubled airline filed for bankruptcy protection in November and said it had enough money to operate for 60 days. Parent company FLYi Inc. warned last week that it would cease operating this Saturday if it was unable to find a major investor or buyer.

Independence Air said on Dec. 5 that "a number" of parties had shown interest in the company and that the proposals would be considered Jan. 3.

"There has not been a firm offer put forward that meets the financial criteria necessary to continue operations," Skeen said.

In November 2004, Independence began service at Tampa International Airport with 50-seat jets flying nonstop to such destinations as Huntsville, Ala., and Charleston, S.C. It pulled back, however, after Delta countered with service on the same thinly traveled routes.

The pull-back left Independence with just two daily flights out of Tampa to Dulles International Airport using full-size Airbus jets.

Airline officials said they are trying to contact customers with roundtrip reservations who are slated to return after Thursday night in an effort to arrange their return travel earlier.

The company is trying to get bankruptcy court approval for the automatic refund of fares for return flights that are not rescheduled and for flights booked for after Friday and beyond. There will be no refunds for vouchers or free tickets.

Once FLYi ceases operations, U.S. law requires rival airlines with open seats to accommodate passengers with tickets for a flight on the same route. The accepting airline may charge no more than a $100 roundtrip fee.

The airline was formerly known as Atlantic Coast Airlines, a regional carrier for United Express, when management decided to form a discount carrier.

After a year of planning, flights began on June 16, 2004, with great fanfare at its hub at Washington Dulles International Airport, about 30 miles west of Washington. A water cannon salute greeted the first outbound plane on what was then a schedule of 39 departures. The first flight to Atlanta was full.

Independence quickly expanded. In recent months, however, high fuel prices and low passenger loads have taken their toll, forcing the carrier to drop several markets. Its 2,700 employees operate 200 daily flights to 37 destinations.

The airline competed against discount carriers JetBlue Airways, AirTran and United's Ted from its Dulles hub.

--Information from the Associated Press, Bloomberg News and Times files was used in this report.

[Last modified January 3, 2006, 01:57:16]