Island Air in Chapter 11

In a move blamed on threats of legal action to ground aircraft and strand hundreds of passengers, Hawaii’s second-largest carrier, Island Air, has filed for chapter 11 to allow it to maintain its inter-island flights as it reorganises.

The airline, which has not made a profit for the past five years, said there would not be any changes to its frequent flyer scheme or the Island Biz corporate travel programme and it anticipated maintaining its regular routes.

The airline embarked on a strategy to expand this year, and purchased a new fleet of larger aircraft to meet that goal.

Second to Hawaiian Airlines as the Aloha state’s second-largest carrier, Island Air brought in a new fleet of larger aircraft this year amid an aggressive expansion strategy.

It is reported to have four Q400s in service, three of which are managed by Elix Aviation Capital and one by Nordic Aviation Capital. Another leased Q400 is in storage.

A bankruptcy federal judge in Hawaii has granted Island Air permission to continue to use cash collateral until a final hearing on Wednesday (8 November).

www.islandair.com

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