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Sun, Jan 25, 2004

Bankrupt: Great Plains Airlines

All Flights Halted

The Great Plains Airlines ticket counter is abandoned at St. Louis MidAmerica Airport. Passengers are stranded. Another airline has gone belly-up.

Great Plains filed for Chapter 11 bankruptcy late Friday, saying it wants to continue service in some form. Company President David Johnson says the carrier plans to commence operations again sometime in March. The airline says it will continue charter service, but did not elaborate.

"The number of passengers using Great Plains exceed our expectations," St. Clair County (MO) Board Chairman John Baricevic said. "From a MidAmerica Airport perspective, they were a great success."

But the airline apparently wasn't successful enough to stave off creditors. That's bad news for St. Clair County, which is heavily invested in Great Plains. The county loaned the airline $500,000 interest-free for aircraft leases, as well as $250,000 for parts and a guarantee to purchase $100,000 worth of tickets. The county also agreed to participate in a $500,000 ad campaign.

Still, none of that was enough to kick-start the airline into profitability. In spite of the Chapter 11 filing, authorities in St Clair County say the relationship should continue. "The debt that they're suffering with right now is what they had before we started our relationship," said Airport Director Tim Cantwell. "We also knew that their business plan was solid and they needed to just have more assets -- we helped them with their assets."

But at least one county executive wants his money back. Frank Heiligenstein, a Democrat, said it's time to cut the county's losses.

"I don't think we need to commit any more funds to this project if they are in this situation," he said. "I'm sure that their finances are shallow, and I just don't have much confidence in something being able to emerge from this Chapter 11 here."

Earlier this month, the airline gave an indication of trouble to come when it reduced its flight schedule between MidAmerica, Tulsa (OK) and Washington (DC) because of maintenance issues on its Dornier 328 jets. In a recent letter to shareholders, Johnson said the company is in the process of turning those two Fairchild aircraft over to its bank.

"It's not their fault; it's Pratt and Whitney's," St. Clair County Board Chairman John Baricevic said. "The regular maintenance that's supposed to be provided by the manufacturer isn't taking place."

FMI: www.gpair.com

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