Lincoln Airport Authority Wants Red Way to Pay Refunds Before Getting Its Final Payment

Oct. 26—The Lincoln Airport Authority passed a resolution on Thursday in an attempt to get refunds for about 670 people still holding tickets for canceled Red Way flights.

"We are taking steps to assist the remaining Red Way customers who have not received refunds," said John Olsson, the airport authority board chair.

The resolution would allow payment to the failed startup airline for its final invoice only after it refunds about $450,000 to ticket holders for flights that never took place.

"It identifies the concerns dealing with refunds," said David Haring, executive director of Lincoln Airport. "And it identifies some concerns related to collection of other fees that were specifically for a designated purpose that have not been received."

Earlier, the airport authority officially accepted an independent accountant's report — a detailed list of every flight and all income and expenditures incurred by Red Way, which began flying in early June before it pulled the plug at the end of August.

The final payment to Red Way was capped to not exceed the $3 million — $1.5 million each from the city of Lincoln and Lancaster County in American Rescue Plan Act funds — used to help launch the airline.

The independent audit cleared the way for Red Way's final invoice — $707,300 — to be presented for payment to the Lancaster County Board of Commissioners, which has the final say on whether to pay it.

However, the airport authority made it clear on Thursday it wants the $450,000 in ticket refunds to be paid first.

"It is my conclusion that these funds should be available for passenger refunds," said Nicki Behmer Popp, the only member of the airport authority board to vote against passing the invoice to the Lancaster County Commission. "If they are not readily available, the board and the customers deserve to know what happened to those funds before any additional payments are made to Red Way."

Last week, it was discovered that Red Way was sending emails to ticket holders telling them their refunds couldn't be made until the Lincoln Airport made good on the money it owed the airline.

It prompted Olsson to explain the way the ticketing process works.

According to U.S. Department of Transportation regulations, when a customer purchased tickets with Fly Next LLC (Red Way's official business name), "Red Way, as the charter operator, has to take specific steps to protect that customer's money," Olsson said.

The air carrier is required to have a surety agreement, such as a bond or, more commonly, an escrow account at a bank to hold that money until the flight is completed.

"Neither the Lincoln Airport, nor any other airport, has access to these escrow funds," Olsson said. "That agreement exists solely between the customer and the charter operator."

Thursday's resolution requires Maverick BankCard Inc., the processing agent for Red Way's ticket sales, to pay the refunds first, before Red Way's final payment can be received.

"Once that has been substantiated and proven, then the airport will move the money from there," Haring said.

And while the resolution, drawn up by Lincoln Airport attorney Bill Kutilek, is legal, Haring warned that Maverick may not honor the terms of the resolution.

"This resolution allows us to do it, but it doesn't necessarily mean (Maverick) is going to do it," he said.

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