Direct Air not coming back to Punta Gorda

PUNTA GORDA - Direct Air, which abruptly stopped flights in March amid allegations of mismanagement and a bankruptcy filing by its parent, will not resume service to Punta Gorda Airport. Two months ago, the troubled charter airline said it planned to overcome rising fuel costs and expenses, reorganize and restart flights in mid-May. But those hopes were dashed when a federal judge in Massachusetts ordered the airline's parent to liquidate. "Direct Air is never coming back," said James Parish, assistant executive director of the Punta Gorda Airport.
May 22, 2012
4 min read

PUNTA GORDA - Direct Air, which abruptly stopped flights in March amid allegations of mismanagement and a bankruptcy filing by its parent, will not resume service to Punta Gorda Airport.

Two months ago, the troubled charter airline said it planned to overcome rising fuel costs and expenses, reorganize and restart flights in mid-May. But those hopes were dashed when a federal judge in Massachusetts ordered the airline's parent to liquidate.

"Direct Air is never coming back," said James Parish, assistant executive director of the Punta Gorda Airport.

Though airport officials had largely resigned themselves to the loss, and Allegiant Air - the lone remaining airline at Punta Gorda Airport - intends to add flights in June, Direct's Air's formal exit is a significant blow.

Direct Air had flown two dozen flights per week from the Charlotte County airport since 2008. In 2011, it carried 177,000 passengers - 61 percent of all the airport's fliers.

Since the carrier's March 13 grounding, the airport has been hit by a pair of economic blows that could affect its bottom line if not reversed. Parking collections in March and April are off 32 percent, to $36,400, since Direct Air ceased operations. Rental car revenue has fallen even further - by 42 percent - to $189,600, records show.

The airport's fixed-base operator is listed as a creditor owed $74,000 for fuel hookup fees in the bankruptcy filing by Direct Air parent Southern Sky Air & Tours LLC, according to court records.

Southern Sky listed debts of $8.6 million to its 20 largest creditors and total liabilities of as much as $50 million, against assets of $500,000 to $1 million.

In addition, Direct Air may owe consumers as much as $30 million in ticket refunds, according to published reports.

"They sold a lot of tickets," said Joseph H. Baldiga, the Worcester, Mass., lawyer appointed as the bankruptcy trustee to oversee the airline's liquidation. "They did pretty well in terms of selling tickets."

Baldiga added that more than 90,000 consumers had claims against Direct Air at the time the airline shut down. He believes most consumers have received refunds through their credit card companies, but those lenders are now out money.

The huge liability prompted an investigation following the March 15 filing, and accusations that executives had looted an escrow account of millions of dollars.

The escrow account, which was supposed to contain $10 million to $20 million, had only $1 million in it at the time of the bankruptcy filing, Baldiga said.

A judge is expected to rule next week on Baldiga's plan to investigate Direct Air's finances.

Judy K. Tull, the Myrtle Beach, S.C.-based carrier's former president, countered that she and other executives were locked out of the airlines's offices following its purchase by equity fund Avondale Ventures LLC last September.

By mid-April, it was clear Direct Air would be unable to deal with its enormous debts. Punta Gorda airport officials said they had not heard from the airline since the week after the bankruptcy filing.

Direct Air's telephone is out of service, and company officials could not be reached. Avondale's managing partner directed questions to attorneys in New York, who either declined comment or did not respond to requests for comment.

Punta Gorda Airport officials say they are continuing to pursue carriers to replace Direct Air. For now, though, Parish said the airport is focused on Allegiant's four new flights, which begin June 27.

Airport executive director Gary Quill estimates that the airport should make up Direct Air's passenger count within 12 to 14 months, thanks to the additional Allegiant flights.

Allegiant flew 111,000 passengers through the airport last year.

Both Parish and Jessica Wheeler, an Allegiant spokeswoman, said advanced bookings for the pending flights to and from Niagara Falls, N.Y.; Fort Wayne and South Bend, Ind.; and Peoria, Ill., have been good. If the twice-weekly flights are successful, the carrier may add additional routes.

"We expected Punta Gorda to be a popular route for these four markets," Wheeler said. "We'll keep an eye out for other opportunities, but right this minute we're going to focus on getting the new routes off the ground, so to speak."

Copyright 2012 Sarasota Herald-Tribune Co.All Rights Reserved
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