א גרויסע פארלוסט פאר קרית יואל-פלארידע

Airline leaves hundreds stranded

By Tim Logan
tlogan@th-record.com
Times Herald-Record

Discount carrier Southeast Airlines abruptly shut down Wednesday morning, leaving hundreds of local travelers stranded.
Citing high fuel costs and intense competition, the Tampa-based airline fired its 350 employees and notified the airports it serves that it will stop flying immediately. Stewart received word overnight.
In the morning, terminal personnel scrambled to get stranded passengers on other carriers to Florida. Some passengers even rented cars for a ride down to New York City airports.
Southeast is the airport's busiest airline, and carries as much as 40 percent of its passengers some months on six daily flights to three Florida cities.

Southeast Airlines ends operations

By Dave Richardson
Times Herald-Record
drichardson@th-record.com

With a terse message on its corporate Web site, discount air-carrier Southeast Airlines called it quits last night, leaving hundreds – possibly thousands – of travelers suddenly in the lurch.
The brief message read:
"Southeast Airlines has made its final landing and has ceased airline operations. We apologize for the inconvenience this will cause to our customers.
"This action is due in part to the unplanned and uncontrollably high cost of fuel combined with a low yield environment that makes it impossible for Southeast to continue offering low-cost air transportation.
"We sincerely thank all of our loyal employees, customers, and vendors for their dedication, support, and efforts.
"Customers should refer to their Operator Participant Contracts, or contact their credit card companies, for information on how to receive refunds of their unused tickets."
Company officials were unavailable to confirm the story last night. A recorded message at the airline's corporate offices gave no hint of anything amiss, saying only that the carriers last scheduled flight of the day – from Allentown, Pa., to St. Petersburg, Fla. – would arrive just after 5 a.m.
A report published by a Tampa area television station early this morning said employees had been gathered together, given the bad news, handed their last paychecks and sent packing.
As of 1:30 a.m. this morning, it was unclear what would happen to Southeast passengers scheduled to fly out of Stewart International Airport. No official notification had yet been made by the airline to airport officials.
The airline's first scheduled flight of the day is at 10:10 a.m. to Stewart to Orlando, with other flights to Fort Lauderdale and St. Petersburg scheduled later in the day.
A woman who said she was a company employee in the Tampa area, who did not want to be named, told the Times Herald-Record about 12:30 a.m. she was shocked at the news.
"I wish they would have given us some warning," the employee said. "I know a lot of people will be stranded."

Southeast cites GE, plane leases for shutdown

By Tim Logan
Times Herald-Record
tlogan@th-record.com

Nearly a week after grounding itself overnight, Southeast Airlines spoke up yesterday. And it blamed General Electric for its instant collapse.
General Electric?
Yes, a division of the nation's fifth-largest company by revenue holds the leases on four of Southeast's eight planes. In a phone interview yesterday, a senior exec for the airline said GE choked Southeast by refusing to bend those leases and by not delivering on costly maintenance contracts.
For two years, Southeast had been asking GE Capital Aviation Services to refinance its leases, said Terry Haglund, vice president for administration and legal. The company wouldn't.
Meanwhile GE required Southeast to maintain the planes through another subsidiary. They charged for the services, Haglund said, but didn't deliver.
"They were supposed to provide maintenance and parts and they did not regularly do either," Haglund said.
So the airline had to buy its supplies from someone else, creating cash flow problems. Compounding the problem, Haglund said, GE improperly withdrew money from Southeast's account.
Big lenders often require small airlines to use their own maintenance shops, said aviation consultant John Pincavage. They're just protecting their investment by making sure the maintenance is done right.
GE had little to say yesterday. Officials there had not heard from the airline since learning of the shutdown last week, said spokesman Eric Jones.
But it wouldn't be a surprise if the lender took a tough stance on refinancing, Pincavage said. Small airlines like Southeast don't have much leverage.
"[GE's] playing the odds," he said. "Most airlines that size don't make it anyway."
Right up to the end, Haglund said, Southeast owner Thomas Kolfenbach thought he'd beat the odds.
The airline was so confident a deal could be worked out that it took possession of a new plane just two weeks ago and was planning new routes.
"We expected GE would refund the money they overcharged us and give us a rent holiday," Haglund said. "When they didn't it was too late."
Since Tuesday, the airline's few remaining employees managed the crisis, essentially as volunteers, Haglund said. There's money in the bank for one last payroll, but the account is frozen. It's unclear how much money there is for Southeast's various creditors, or for ticket holders.
The airline has talked with bankruptcy lawyers, Haglund said. But no filing is imminent.
Right now the focus is on getting employees paid and passengers taken care of. Then, Haglund said, they hope to find a way for Southeast to fly again.