A BUDGET airline has gone out of business after failing to attract any possible buyers at a bankruptcy auction.
Beleaguered Silver Airways had been fighting for survival after filing for bankruptcy in December last year.
Travelers have been told to avoid going to the airport[/caption]
But, the low-cost carrier is to stop trading and travelers have been urged to avoid going to the airport, as per the CBS affiliate WTSP-TV.
A bankruptcy auction was held earlier this week, but no potential buyers stepped forward.
Chiefs had been struggling to clear mounting debts for months and the company had only eight turboprop planes as part of its fleet.
Its debts totaled more than $100 milllion, according to the radio outlet WLRN.
And, it was only surviving due to a $5.7 million loan provided by Wexford Captal.
A potential buyer had to exceed that figure if they wanted to buy out the company.
Silver Airways also suffered a financial hit during the Memorial Day weekend.
Planes were grounded because of a mechanical fault.
In March, Silver Airways flights from Orlando airport were grounded.
In a letter to customers, Silver Airways bosses had stressed the company would continue operating as normal.
“Our team remains committed to delivering the safe, comfortable, and reliable travel experience you deserve—whether you’re flying for business, reuniting with loved ones, or taking a well-earned beach getaway,” they said.
“We deeply appreciate your trust and loyalty to Silver Airways. Thank you for choosing us to meet your travel needs.
“We look forward to welcoming you aboard in the new year.”
Execs revealed that the company would be in a stronger position following the bankruptcy filing.
Silver Airways provided flights to Florida, as well as Caribbean destinations.
How does bankruptcy work?
Bankruptcy is a specific legal process that helps companies eliminate debt they can’t repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
Services were provided to cities such as Key West and Tampa in Florida.
Travelers could also book getaways to the Bahamas, Puerto Rico, St. Kitts, the US Virgin Islands, and the British Virgin Islands.
In November last year, Spirit Airlines bosses filed for bankruptcy.
The company had debts of around $9 billion at the time of the bankruptcy filing.
But, the process was completed four months later, and bosses revealed how they would entice potential travelers.
Ted Christie, the CEO, is spearheading an effort to “redefine” the low-cost travel sector.
Execs revealed that the company’s loyalty program would be examined.
Spirit has since launched a new extra-legroom seating option and new benefits for its customers.
Customers will be able to take advantage of an expanded range of food and drinks on board Spirit flights.
The U.S. Sun reported how Spirit Airlines is launching new flight routes.
Non-stop flights to Newark, New Jersey, will soon become a reality this August.
Spirit bosses have announced flights to Nashville, Tennessee, will start from October.
