07 April 2008

Skybus Airlines goes bankrupt

A Sydney Morning Herald report sasy that Skybus Airlines, a US low fare carrier that started operations less than a year ago, filed for bankruptcy after stopping service.

The airline is the third carrier to seek bankruptcy in the past 2 1/2 weeks on rising fuel costs and a slowing economy, joining Aloha Airgroup and ATA Airlines. Skybus started service on May 22, with some tickets as low as $US10 for a four- hour flight.

''Our financial condition is such that our board of directors felt it had no choice but to cease operations,'' Skybus said in a statement on its Web page yesterday.

The closely held Columbus, Ohio-based airline has assets of $US100 million to $US500 million and debt of $US50 million to $US100 million, according to a Chapter 11 petition filed yesterday in US Bankruptcy Court in Delaware. The largest unsecured creditor is Chicago-based World Fuel Management, with an $US8.5 million claim, according to the filing.

Separately, Champion Air, a carrier based in Bloomington, Minnesota, will cease flying May 31 because of high jet-fuel costs for its Boeing 727s and the loss of charter contracts for 13 National Basketball Association teams to its former owner, Northwest Airlines. There will be no bankruptcy filing, said Jon Austin, a spokesman for the carrier.

A Report by The Mole from The Sydney Morning Herald