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Independence Air: The Little Carrier that Strived to Be So Much More September 20, 2005

Posted by Andrew in Uncategorized.
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Photo: Aeroposte Editor (Flyi Airbus A319)

Tired of operating regional aircraft under the United Express banner for parent company United Airlines, Independence Air CEO Kerry Skeen broke ties with the legacy carrier fourteen months ago, with the belief that he was steering the airline toward bluer skies. Instead, he may have sent the airline in for a fiery crash landing, as Independence faces either a Chapter 11 filing or Chapter 7 liquidation in the near future. Independence Air, commonly referred to by its stock symbol “Flyi”, was to serve East coast, and eventually West coast cities with scrappy Bombardier regional jets and plush Airbus A319 aircraft. Even though regional aircraft are well-known by airline executives to be expensive to operate without high load factors, Independence Air executives showed no fear as they worked to convert the outfit from the bastard child of United to a low-fare contender. Provided of course, oil stayed at $35 per barrel, as it was at the time, the airline had a fighting chance.

Instead, Independence Air has struggled to make a profit. While its in-flight product has won accolades from various travel magazines, the bottom-line of the airline has been less than stellar. The introduction of larger, more efficient Airbus A319 aircraft has had a positive effect financially, but their effect has not been profound enough to turn the fortune of the carrier. Eight months after Flyi’s so-called “Independence Day”, management reached a restructuring agreement with its creditors. The process entailed selling off a large portion of its Bombardier CRJ-200 regional jets to other airlines while expanding its Airbus fleet. With the latest cutbacks in capacity and destinations served, Independence Air seemed in prime position to reposition itself. Then, the FAA slapped the airline with maintenance fines for violations when the airline flew for United Airlines. Load factors didn’t exactly pan out either, and now, Independence Air is at a crossroads. Since nearly all of property is leased, the airline doesn’t have many assets. Without assets, the airline doesn’t have capital to continue operations in its current state. Indeed, as Kerry Skeen was quoted, “There are tough times ahead” for the little carrier that strived to be so much more.

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