November 09, 2005

Independence Air Declares Bankruptcy

Low-cost startup airline Flyi Inc. announced Monday that its parent company, Independence Air, has filed for Chapter 11 bankruptcy protection. In a statement released by the airline, it said the bankruptcy filing will allow it to "restructure the company's aircraft leases and other costs to achieve necessary cost savings."

According to Rick DeLisi, director of communications, "No changes in routes, destinations or schedules are planned." Delisi also said the airline will be concentrating on lowering operating costs. As with many other airlines, high fuel costs combined with low fares and multiple carriers on the same route have hurt Independence Air's bottom line.

The announcement is terrible news for investors of the carrier. In a statement posted on its Web site, the airline said that after Chapter 11 proceedings, stock in the company would most likely be worthless. Trading at $6 on its first day of operations, Tuesday afternoon the price of Flyi stock had fallen to .08 cents on the Nasdaq exchange.

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