The Failure of Direct Air
Myrtle Beach, South Carolina based Direct Air filed for Chapter 11 bankruptcy protection on March 15th of this year. The discount airline was well known for its flights connecting smaller cities throughout the United States to popular tourist destinations, mostly in South Carolina and Florida. The airline stopped operations overnight without any notice to customers or employees. The airline has announced that it is opening an investigation into what called its financial collapse. It appears that the collapse was ultimately due to an inability to pay its bills for fuel and to its charter carriers. Direct Air owed Sky King airlines alone an estimated $900,000. In its bankruptcy filing statements, Direct Air said that it owed a total of $10 million - $50 million but only had assets worth about $500,000. Lawyers are blaming the former president and top executives of the company, saying they abandoned the company when they realized that it was in trouble. Just days before the airline stopped operations, the escrow account that is used for reimbursing passengers for cancelled flights had large amounts of money withdrawn from it.