Posted on 12/29/2005 3:08:58 PM PST by Central Scrutiniser
Copy of letter sent to all employees:
December 23, 2005
RE: Furlough
Dear Flight Attendant ######:
As you know, FLYi, Inc, the holding company for Independence Air, has been actively engaged in securing investors in, or purchasers of, the Company as it attempts to reorganize under Chapter 11 of the United States bankruptcy Code.
The Company expects that is it is unable to secure significant external investment or a sale of all or substantially all of its operations before January 7, 2006, it will permanently cease all operations and separate all employees at all locations sometime during the period January 7-21, 2006.
In accordance with Section 16.A.4 of the collective bargaining agreement between the Company and AFA covering flight attendants, this letter shall constitute notice that you will be furloughed effective January 7, 2006. The Company retains the right to amend or rescind this notice of furlough.
Sincerely, Jeff Rodgers Vice President, Employee Services
When they changed their name from Atlantic Coast Airlines, and decided to go it alone, that was a good thing, relying on high cost 50 seat RJ's was not a good thing. Drastically undercutting fares and taking a loss on each flight was also pretty stupid.
When they got the new A319's, the economics turned in their favor, but too late, several cities were dropped, (LAX, SAN, SFO) and now they are looking at liquidation.
From the Charleston newspaper (via UsAviation.com):
Independence Air facing end
From staff, wire reports
Thursday December 29, 2005
WASHINGTON -- Flyi Inc, the parent company of Independence Air, will cease operating Jan. 7 if it is unable to find a major investor or buyer, the airline said in a letter received by its employees this week.
In the letter to its unionized workers, including pilots, flight attendants and mechanics, the Dulles, Va.-based airline said that without "significant external investment," it would stop flying in 10 days, and lay off workers at all of its locations between Jan. 7 and Jan. 21.
Flyi filed for bankruptcy on Nov. 7. At that time, the financially struggling carrier said it was searching for a major investor, and absent that would sell off its assets.
The airline mailed the letter to comply with labor agreements requiring it to serve notice of intent to furlough its workers. The carrier employs 2,800 people.
Despite the letter, Independence spokesman Rick DeLisi said the airline's fate was far from sealed and that the carrier still had a "number of ongoing discussions" and was still "exploring" a number of options.
"No definitive decision has been made," he said. DeLisi declined to comment further.
Independence Air is the first low-fare carrier to serve West Virginia. The airline serves Charleston's Yeager Airport with three round-trip flights daily to Washington Dulles.
Since it began serving Yeager Airport in July 2004, Independence Air has saved Charleston travelers about $25 million, Yeager Airport Director Rick Atkinson said last month.
Atkinson said today he believes there's still hope the airline will find a buyer or investor, although "It's not the best of situations and I'm not overly optimistic that it is going to work out for them."
If Independence Air ceases operations, "it will have a significant impact on air travel in West Virginia," Atkinson said. "The market has responded very well to a low-fare carrier. It stimulated traffic substantially, especially to Washington, D.C."
Atkinson said that if Independence Air ceases operations, he hopes this region's travelers will still be able to enjoy everyday low fares as US Airways continues to restructure as a low-cost airline and Delta emerges from bankruptcy with a simpler fare system.
US Airways and Delta both serve Yeager Airport through affiliated carriers.
Kanawha County Commissioner Kent Carper said today he hopes the airline does not quit flying "but it appears that's where it is headed."
"Interestingly enough, they actually turned a profit, as I understand it, in November and December," Carper said. Even so, "it looks dismal."
Carper has said something must be done. He said he has been in contact with the governor's office and the state's congressional delegation.
When you look around the country, bringing a low-cost carrier in here was remarkable, especially after 9/11. Low-cost carriers depress costs across the board. The amount of money saved here is incredible. It's in the millions. It would be foolish not to try to bring in another low-cost carrier. That will take time.
"We'll be calling on other carriers not to inflate prices just because they can," he said.
Independence Air pilot Patrick Devney, who has worked for Flyi and its predecessor, Atlantic Coast Airlines, since the company was formed in the late 1980s, received his furlough letter by regular mail on Tuesday.
"I lost my mother on Dec. 11, so I had been dealing with that," said Devney, who lives in Jefferson, Md. "I was anticipating this letter, but it's still kind of stressful."
Devney, who said he earns a minimum of $9,000 a month as an Airbus captain, is making plans for another job. But it may not be in the airline industry.
"The problem is I'm 47 years old and I have 13 years left to fly legally, before mandatory retirement," he said. "But when an airline goes bye-bye your seniority usually doesn't transfer with it. We have guys who are 58 years old and will have to take a 60- to 70-percent pay cut if they want to start all over at another airline."
Meanwhile, the airline continued to accept advance bookings from travelers for as far out as April.
Michael Boyd, an analyst at the Denver-based consulting firm the Boyd Group, said it was unlikely Independence would find a buyer that would be willing to keep the airline afloat. Instead, Boyd said it was more likely that any potential investors would purchase some of the airline's assets.
"There is no future when you send a letter like this out to your employees. This is basically a cadaver they're trying to breathe life into," Boyd said. Boyd said travelers should use caution in purchasing tickets on the carrier -- at least until the airline announces its plans.
However if Independence folds, travelers holding tickets could redeem them on competing airlines for a fee of $50 each way through next Nov. 30. That provision was part of a statute created by Congress to protect consumers following the Sept. 11, 2001, terrorist attacks.
Flyi has received at least two bids for its assets -- one from its former longtime partner, UAL Corp., parent of United Airlines, the other from Mesa Air Group Inc., a Phoenix-based regional carrier that tried to acquire Flyi two years ago.
From 1989 to 2004 Flyi -- then known as Atlantic Coast Airlines Holding Co. -- operated as a feeder carrier for United, the nation's second largest airline.
Flyi has been tangling with United since the larger carrier filed for bankruptcy protection in December 2002, then sought to renegotiate its deal with Atlantic Coast. The two companies didn't come to terms, and Flyi reinvented itself as a low-cost carrier in June 2004.
In a claim filed in the U.S. Bankruptcy Court in Chicago, where United's case is being heard, Flyi is seeking $1.28 billion from UAL -- profits Flyi says it lost because UAL terminated its contract.
Bankruptcy court judge Eugene Wedoff recently reduced the maximum amount Flyi could claim to $500 million. On Tuesday, Flyi appealed Wedoff's ruling.
Another one bites the dust :(
Could you aviation pinglist this?
No surprise....
I have pilot friends at this airline; however, it needs to be shut down. Terribly managed and run. Hopefully as more excess capacity is removed from the system the remaining carriers will at some point become profitable again.
And yes, I have been in their shoes before.
Eliminating capacity doesn't always mean profits for someone else. Flyi flew with incredibly low fares that hurt other carriers adn got people to fly that wouldn't normally. With them gone, UA and US will raise fares back to normal levels, but the amount of fliers on those routes will go down.
They never flew to Phoenix, but they did do a few test runs here when they got their first A319, they did their high/hot testing here in the summer.
What a shame. At one point there was talk of them having jet flights from my city to Washington Dulles. That would have been great and I would have taken advantage of that service but it was not to be.
Does that plane have a German flag and registration number on it?
I managed to focus a little better. Yes, it's German.
Phew! I flew Independence Air over the Christmas holiday, using a $250 credit from last year. Good thing I acted when I did.
Too bad.
Never heard of them.
Still trying to get used to Jet Blue (the 800 pound gorilla of the minor leagues)...
There are two sides to the 'little guy' story.
The picture was taken in germany before the A319 got delivered to America. I believe the paint job went on there.
Its one of them obscure rules with planes, the german flag is not on their regular fleet in America.
Jet Blue is having some troubles, all those new planes are due for costly C checks and they brought on a new plane type, and have lots more coming on line, but no real exciting place to put them yet.
Thanks for the explanation.
I just heard this news this morning here in the D.C. area (Independence Air hubs out of Dulles). Sorry to hear it, but not surprised. The management had a very aggressive growth & advertising strategy, from my view.
As of today, January 2, 2006, Independence Air will effectively cease all operations on Thursday, January 5th. I am currently a flight attendant for flyi (as some of you may remember), and it has been a fun ride. Great people to work with, great times on the A319s and RJs, and it's a shame that we weren't able to pull through. I hope everyone (myself included!) manages to find another position in the sky, as it has definitely gotten into our blood. R.I.P Independence Air.
From the webpage:
Today is a sad day for Independence Air.
Today we must announce that we will be ceasing scheduled service operations this Thursday evening, January 5. The financial pressures in the industry have prevailed. We have run out of time.
It has been an amazing 18 months. We set out to challenge the status quo and to re-set your expectations about air travel. We set out to introduce you to lower fares and a new level of service delivered by employees who care. Currently ranked #2 in customer satisfaction among all US airlines, we are proud that we did indeed earn your respect and loyalty. We are proud that we built a brand so universally praised by over 8 million customers. We are proud of the mark we have made.
Customers with reservations whose trips are completed between now and Thursday evening should expect the same great service for which we have become known.
Additionally, we are seeking bankruptcy court approval to automatically provide refunds to customers holding reservations on flights occurring after our shutdown of operations on January 5th. No refunds will be offered for free tickets or vouchers.
Finally, we will be contacting those customers with itineraries that start before and end after our shutdown (including those customers who have already commenced their travel) to offer them the opportunity to change their return reservations to a flight on one of our remaining days of operation if possible. Customers can immediately change travel dates on their own by visiting the “Change Itinerary” section of our website, FLYi.com. All change fees will be waived when travel dates are changed via our website, but a difference in fare could be incurred (unfortunately, this results from a website process that cannot be disabled). Alternatively, if moving the return trip to one of our remaining operating days is not feasible, we are also seeking bankruptcy court approval to refund any amounts paid by these customers for their return reservations.
Please be aware that under section 145 of the Aviation and Transportation Security Act (November 19, 2001) Congress has obligated U.S. airlines to offer stand-by transportation to passengers holding un-refunded tickets for airlines that have ceased operations due to insolvency or bankruptcy. The Act stipulates that passengers must make their request to carriers serving the same routes as the bankrupt carrier and must do so within 60 days of the cessation of service. The U.S. Department of Transportation has ruled that airlines who offer the stand-by transportation may charge $50 one-way per person to cover related expenses.
Today is a sad day for Independence Air. Today is a sad day for our customers who have gotten used to tender loving service and paying less for air travel. We will miss serving you. Thank you for your vigorous support.
Sorry to hear it, hope you find something else. I know USAirways will probably hire FA's soon, not sure where the crew base for it would be, probably PHX.
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