Independence Air may have bought itself some breathing time with a $257 million restructuring by cutting lease payments and marketing costs and reducing staff numbers. However, analysts are showing little confidence in its longer-term survival.
Known until last year as Atlantic Coast, Independence broke from its United Express role to become the first US regional jet operator to try a low-cost strategy but promptly ran into a buzzsaw of competitive response at its Washington Dulles hub, losing $86 million in the fourth quarter alone. After cutting its Bombardier CRJ200 fleet from 87 to 58 aircraft, Kerry Skeen, chairman of parent FLYi, proclaimed "light at the end of the transition tunnel".
Independence now places its hopes on its fleet of six Airbus A319s, which it is using on longer routes to Florida and to five cities on the west coast. It will add six more A319s by June. Skeen says: "We expect to be an efficient carrier by the start of the third quarter and there is a decent chance that we can improve our CRJ utilisation."
FLYi's cash has fallen to under $126 million, Raymond James & Associates analyst Jim Parker says, adding its "cash position could sharply decline to around $6 million by the end of the year" and that it could file for bankruptcy by year-end.
Source: Airline Business
