Charter Carrier To Stop Flying May 31
Two days... and two fewer US
airlines. Hot on the heels of Aloha Airlines' Sunday announcement
it will stop flying at the close of business Monday, Champion Air
announced it will cease flight operations effective May 31.
"This is a sad day for the entire Champion family," said
Champion President and CEO Lee Steele. "The men and women of this
airline have poured themselves into providing safe, reliable and
pleasing service to millions of customers over our 11 years in
business. Unfortunately, however, our business model is no longer
viable in a world of $110 oil, a struggling economy and rapidly
changing demand for our services. Those factors also have impeded
our efforts to attract new capital and new investors. Accordingly,
the management team and our board of directors have decided that
the best course of action is to cease flying and to wind up our
operations in a responsible, deliberate manner."
Champion's demise has been predicted for several months. As ANN reported in December
2007, Steele hinted the end was likely nigh, as the
carrier faced the impending loss of "all contract revenue" on its
prior arrangements by August 2008. The airline -- which operates a
fleet of Boeing 727s -- operated charter flights for Northwest
Airlines subsidiary MLT Vacations, and 13 National Basketball
Association teams.
In his announcement Monday, Steele noted the run-up in fuel
prices strongly impacted Champion’'s fleet of aging, thirsty
trijets... and that both the overall economic slowdown and the
tight credit markets had a strong, negative impact on the
airline’s business prospects and its efforts to attract
investors.
Compounding the challenges facing the airline was a growing
trend in the marketplace away from charter carriers for certain
types of flying... the very market Champion clung to.
"Champion really has experienced a
'perfect storm' that has simultaneously affected our cost
structure, our ability to generate revenue and our ability to
restructure ourselves," Steele said. "Any one of those factors
would be difficult; collectively they are
insurmountable…even with the tremendous employees we have
and the best efforts of everyone involved.
"The people of this airline can take a very justifiable pride in
what they have created," Steele continued. "This situation is in no
way a reflection of their talents, their commitment or their
passion for our customers."
Champion tells ANN it will fulfill all outstanding service
commitments and will remain fully in compliance with all
regulatory, operational and labor contract requirements. The
company has adequate funds to continue operations and to settle all
outstanding financial obligations. The airline’s current 550
employees will continue to receive their pay and benefits through
May 31.
Notification of the impending shutdown as mandated by the Worker
Adjustment and Retraining Notification (WARN) Act and any similar
state and local regulations is underway.