Hawaii’s second-largest airline, Island Air, filed for Chapter 11 reorganization bankruptcy on Monday.
The bankruptcy filing was caused by threats of legal action to ground the aircraft and strand hundreds of passengers, according to the airline. The filing prevents the threatened action and allows it to continue interisland service for its customers.
The airline just this year brought in a new fleet of larger aircraft as part of an aggressive expansion strategy.
This is Island Air’s first bankruptcy filing in 37 years of operation. The airline has lost money for 17 straight quarters.
During the reorganization, Island Air stated it expects to fly its scheduled routes as normal and honor all previously purchased tickets and confirmed reservations.
“Island Air will continue to hold our customers and employees, as well as our invaluable vendors, as our main priorities during this reorganization process,” said David Uchiyama, Island Air president and CEO. “Once we have completed the reorganization process, Island Air expects to emerge as a stronger airline with a solid financial structure that will allow us to continue to meet the demands of Hawai’i’s dynamic interisland market, while positioning us for future growth and expansion.”
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.