Island Air, the state’s second-largest airline, which brought in a new fleet of larger aircraft this year amid its aggressive expansion strategy, filed today for Chapter 11 reorganization bankruptcy.
The company said the bankruptcy filing was caused by threats of legal action to ground the aircraft and strand hundreds of passengers. Island Air said the filing prevents the threatened action and allows it to continue interisland service for its customers.
During the reorganization, Island Air said it expects to fly its scheduled routes as normal and honor all previously purchased tickets and confirmed reservations. In addition, there will be no changes to the Island Miles frequent-flyer and other customer service programs, including Kupuna & Keiki Saver Fare, Island Biz corporate travel program, and military and group travel programs.
Island Air, which had never filed for bankruptcy in its 37 years of existence, has lost money for 17 straight quarters.