Island Air files for Chapter 11 bankruptcy
Hawaii interisland carrier Island Air has abruptly filed for Chapter 11 bankruptcy protection.
The struggling airline says Chapter 11 is necessary amid a dispute over the leasing of aircraft.
"While in the process of negotiating its aircraft leases with its lessors, Island Air was very surprised that the lessors served them with notices of termination of the leases and demands to surrender its airplanes," it said in a statement.
"Prioritizing its customers, employees and the communities it serves, Island Air made the difficult decision to file for bankruptcy protection. Continuing to operate under the protection of the United States Bankruptcy Court will allow Island Air to maintain its service to its customers, provide continued employment to its more than 400 valued employees, and ensure a revenue stream so its vendors are paid."
During the bankruptcy proceedings all routes will operate as normal and all current bookings will be honored.
Aircraft lessors made threats to ground aircraft, Island Air said, but it gave no details about what is behind the spat.
"Island Air expects to emerge as a stronger airline with a solid financial structure that will allow us to continue to meet the demands of Hawaii’s dynamic interisland market, while positioning us for future growth and expansion," said Island Air president and CEO David Uchiyama.
Island Air operates about 200 flights a week between Oahu, Maui, Kauai and Hawaii Island.
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