View Full Version : Independance Air Shutting Down After Only 18 Months

01-03-2006, 07:39 AM
This is really a bummer, as they seemed to be a carrier of the same quality as Southwest. Really shows the shambles that the airline industry is in right now.

Jan. 3, 2006, 5:16AM
Independence Air to Shut Down on Thursday

By DERRILL HOLLY Associated Press Writer
2006 The Associated Press

CHANTILLY, Va. Independence Air, which won fans with its low fares, announced plans Monday to cease operations just days into the new year.

The carrier said its money troubles will force it to cancel all departures after 7 p.m. Thursday. The end came less than 19 months after the airline's first takeoff.

"Things traditionally in the airline industry slow down drastically in January, so the total number of people that are going to be affected by this is much less than it would have been during the holiday season," said Rick DeLisi, a spokesman for Independence Air.

It was not immediately clear how many people had tickets, which DeLisi said the airline would continue selling through Thursday. On Monday afternoon _ hours after the announcement _ flights could still be purchased on its Web site.

"A lot of people have described the current economic conditions in the industry as the worst ever in history, and that's certainly proved to be the case in our situation," DeLisi said.

Thursday will be last day of work for most of the 2,700 employees, though about 180 will remain to close out the carrier's affairs.

The airline filed for bankruptcy protection in November. Parent company FLYi Inc. tried in vain to find a major investor or buyer.

"There has not been a firm offer put forward that meets the financial criteria necessary to continue operations," Kerry Skeen, Independence Air's chairman and chief executive officer, said in a statement Monday.

Last week, the carrier reportedly sent letters to its unionized pilots, flight attendants and mechanics, warning of the looming shutdown.

Passengers with roundtrip tickets are being contacted to see if they can return before the shutdown. Independence Air will ask a bankruptcy court to give refunds to those who cannot, as well as to people who booked flights for Friday and beyond. There will be no refunds for vouchers or free tickets.

Other U.S. airlines operating on the same routes as Independence Air are required to offer standby seats for $50 each way to passengers holding unrefunded tickets, according to a message posted on the Independence Air Web site. The requirement is part of a federal law passed in November, 2001, to protect airline passengers following the Sept. 11 terrorist attacks. Passengers must make their requests to the carriers within 60 days after Independence Air halts it service.

Decisions on outstanding aircraft leases and gate space at dozens of airports will be determined through bankruptcy proceedings.

Independence Air's hub at Washington Dulles International Airport _ about 30 miles west of Washington _ was busy Monday. More than a dozen clerks were checking in streams of passengers.

"We knew there was a possibility this would happen, but I'll just hope it works out for the best," said a ticket agent who did not want to be identified.

"We've flown them quite a bit. They had a lot of flight options and good prices," said Chris Turpin, 37, of Indian Rocks Beach, Fla., who also gave high marks to the friendly staff.

"I've never been made angry by this airline," said Adrian Burns, 25, as he waited to check in for a flight to Columbus, Ohio.

At Dulles, Independence Air vied with discount carriers JetBlue Airways Corp., AirTran Holdings Inc. and UAL Corp.'s Ted. It also faced major competition from Southwest Airlines Co., which flies out of Baltimore-Washington International Thurgood Marshall Airport.

The company was formerly known as Atlantic Coast Airlines. It operated as a contract carrier for United Airlines and Delta Air Lines Inc., but when United sought to renegotiate its contract with Atlantic Coast at lower rates, Atlantic Coast executives decided they had a better future as an independent carrier.

After a year of planning, flights began with great fanfare at Dulles on June 16, 2004. 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 Air expanded to fly to most states on the East Coast and major cities on the West Coast. In recent months, it was forced to drop several routes.

01-03-2006, 10:54 AM
This is really unfortunate. My flights to Columbus out of Dulles just got a lot more expensive.

01-03-2006, 10:56 AM
I believe I read when they first started that some were questioning their choice of aircraft (RJ I believe) as the wisest choice for being a low cost provider. It may have contributed to the problems.

I heard many rave reviews about them, but they never came up as the low cost provider for me for flights i took from Buffalo.

01-03-2006, 11:18 AM
Assuming the RJ in question was the CRJ (Canadair Regional Jet), it is a fine choice for a low-cost carrier. A newer stretch version can hold about as many people as a used 737 at a fraction of the maintenance cost, with lower landing fees and less fuel consumption.

Of course, operating cost efficiencies don't mean much if you can't get buns in seats.

01-03-2006, 11:52 AM
What I have been hearing is that there is a belief that Independence wasn't properly capitalized when they started service, and were practically doomed from the start. Purchasing an entire set of new jets, and higher fuel costs, help put th enail in their coffin.

Still unfortunate, though. Their presence helped keep fares down at a lot of airports.

01-03-2006, 12:14 PM
Tough Industry to break in during gas crisis times.

Remember Ozark Air?


01-03-2006, 12:14 PM
From what I can dig up, they actually leased their CRJs from GE Capital Services, which is a common practice in the industry.

They were in the process of acquiring 28 brand-new A319s from Airbus, though. Those aren't cheap, but, again, they can make money assuming normal ticket sales.

There can be little doubt that the company was poorly capitalized if it only lasted this long. Particularly if its business strategy was simply to undercut the big boys on price. Part of being a big boy is having the wherewithal to slash margins when necessary. Current economic climate notwithstanding.

01-03-2006, 12:23 PM
America West and US Airways merged. So there still maybe hope for those on the East Coast. I don't know what airports US Airways serve, but they weren't cheap when I looked into flying them.

01-03-2006, 01:04 PM
I've heard that fares into Indianapolis are much cheaper than flying into any of the Ohio airports (and CVG) lately. Was Independence Air was a big factor in that?

01-03-2006, 02:57 PM
I don't know enough about prices into and out of IND to say with certainty.

I can say that IND hasn't been much of a commercial hub since USAirways drastically scaled back its scheduled service in about 1998.

Generally, being a hub is great for travelers' convenience, since it offers more non-stop destinations, but it's bad for their pocketbooks, due reduced levels of competition (such as we see at CVG).

So, presumably, if IND offered cost competitiveness, it was probably due to five or six years of standard supply and demand left unchecked by a dominant player like Delta, for example. Then low-cost carrier Independence Air showed up and offered lower prices that other carriers then (generally) tried to match. Then Northwest became an aggressive player in that market a year or so ago, which probably helped push prices even lower.

With the low-cost threat eliminated, prices at IND will probably normalize. Commercial aviation has this drill down to a science. The industry goes through one of these every few years.