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Direct Air ends flights, fires managers, files bankruptcy

Hints that Southern-based carrier Direct Air would file for Chapter 11 bankruptcy began when the charter airline suddenly left its passengers in a lurch. The airline recently canceled flights without warning. Four days later, company officials filed a petition in U.S. Bankruptcy Court for protection from its creditors.

The decision to file a petition for bankruptcy comes just six months after an investor group took majority control of the company. The new owners attempted to shore up Direct Air's poor financial situation with a jolt of fresh operating capital.

Direct Air officials stated that the bankruptcy filing was necessary because the charter carrier had fallen to a "severe operating loss position" The price of airline fuel and expenses to keep the charter company operating were listed in the Chapter 11 filing as reasons for the company's financial spiral.

Flight cancellations began on a Monday, and a company announcement suspending public charter flights through mid-May was made the next day. A change of leadership also took place. Company operations managers who had survived the investor group's takeover last September were removed and replaced just before a Thursday bankruptcy filing.

Direct Air, headquartered in South Carolina, serviced 17 destinations from New York to Florida. Some passengers, who were booked on a Niagara Falls to Palm Beach flight on the airline's last day of operations, were left hanging at an airport in New York.

The company vaguely touched on the subject of a possible emergence from bankruptcy, saying it hoped to reorganize under Chapter 11 and recover its financial status soon. Although it's unknown how much debt the company has, the Chapter 11 filing should give it time to reorganize and emerge as a stronger company.

Source: sun-sentinel.com, "Direct Air Files Chapter 11 bankruptcy protection," Arlene Satchell, Mar. 16, 2012

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