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Another airline seeks bankruptcy protection

Months ago we posted on the fact that American Airlines had filed for bankruptcy. At the time, the airline cited the increase in fuel costs as one of the reasons for the filing. Now, another airline — Direct Air — has also filed for Chapter 11 bankruptcy. The company is also citing the rising costs of fuel and operating as the reason for the need to file.

The Chapter 11 bankruptcy filing also comes just days after the company abruptly canceled flights. One of these flights was to Palm Beach International Airport in Florida. The unexpected cancelations led to many passengers being stranded.

Since then, the charter company has released a statement apologizing to those passengers who were inconvenienced. The company is also hopeful that it will be able to emerge from this bankruptcy.

The day after the flights were canceled, the company had reported that all charters would stop until May 15 in order to allow “operational matters” to be taken care of. However, with the news of the bankruptcy filing it is unclear if flights will start after that date.

Overall, Direct Air is not alone in its decision to file. In fact, with the recent economic conditions, many consumers have stopped spending as much, and in turn many businesses have turned to Chapter 11 bankruptcy protection as a way to reorganize and hopefully once again continue to thrive.

However, even though many businesses — large and small — have decided to file for Chapter 11, it’s important to keep in mind that the process can still be somewhat intimidating and confusing, but that an attorney who focuses on bankruptcy can be of help when it comes to guidance.

Source: Sun Sentinel, “Direct Air files Chapter 11 bankruptcy protection,” Arlene Satchell, March 16, 2012

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