Ramon Lopez/WASHINGTON DC
Kiwi International Airlines, facing permanent shutdown of scheduled passenger services after filing for bankruptcy-court protection, has been rescued by Wasatach International, a Florida-based investment concern.
The low-fare US carrier, which filed for Chapter 11, on 30 September and forced to suspend, scheduled flight operations on 15 October. The carrier was on the brink of extinction, facing the prospect of making asset sales, when the rescue was made by Wasatach, which also owns Palm Beach Cruise Lines and the Viking Princess cruise ship.
Company lawyers said in the bankruptcy court that Wasatach would immediately provide $5 million of secured financing and additional funds beyond that. Other investors are being sought, but Kiwi says that Wasatach will become the majority stockholder.
Kiwi has struggled to survive since its launch in 1992, but weathered two short-term forced shutdowns earlier this year by the US Federal Aviation Administration over pilot training issues. The carrier also says that it suffered in the wake of the bad publicity, which hit the US no-frills carriers in the wake of the ValuJet crash in May. The carrier was also carrying heavy debts.
Kiwi is expects to restore services to Newark, Atlanta and Chicago once the cash infusion takes place. Suspended flights to Florida cities may soon follow. Kiwi hopes to resume scheduled flights before Thanksgiving Day on 28 November, one of the busiest travel periods in the USA.
Kiwi did not act on a vague proposal from deposed Kiwi chairman Robert Iverson, who offered $25 million in investor financing. Iverson was said to be after the company name and operating certificate. He also wanted the right to reject any of Kiwi's aircraft leases.
Kiwi is to file a re-organisation plan with the court on 31 October, signalling yet another new start for the low-fare airline.
Source: Flight International
