LYCOS RETRIEVER 
Independence Air
built 657 days ago
[T]he takeoff of low-fare carrier Independence Air, a project once codenamed "Goldilocks", has proved to be about as smooth as lumpy porridge. Yet Kerry Skeen, the unorthodox chief of the star-crossed company, which shuts down Thursday evening, apparently has no regrets over his fruitless attempt to create the industry's first such airline flying 50-seat jets.
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DULLES, Va., Nov. 8 /PRNewswire/ -- Low-fare airline Independence Air was named one of the best U.S. airlines in the 2005 consumer poll released yesterday by Zagat Survey. In the categories of "Top Service/Economy," "Top Website/Economy," "Top Comfort/Economy," and "Top Overall/Economy" the company finished in the top five. A total of 22 U.S.-based carriers were included in the survey.
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After loading the airline’s complete budget and complete general ledger into QlikView, Independence Air “almost instantly” had a very powerful budget variance tool, Shaffer points out. “It has caused a lot of departments to do a double-take in the last budget variance meetings.”
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Throughout 2005, Independence Air planned to emerge from deficits through fleet changes and workforce layoffs. At its inception, Independence Air's small Canadair Regional Jets cost the company $0.22 per seat-mile to operate. Low-cost carriers with larger aircraft were able to operate at much lower costs: $0.065 for JetBlue (with Airbus A320s) and $0.075 for Southwest Airlines (with Boeing 737s). In an effort to lower its costs to a competitive level, Independence Air began taking deliveries of new Airbus A319 aircraft that were expected to reduce operating costs toward JetBlue and Southwest's levels. The airline was never able to rebound.
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As of this Thursday, January, 5, Independence Air, based at Dulles International Airport outside Washington, will cease operations. Its parent, FLYi Inc., cites the inability to garner new outside investors as the reason. It’s been an uphill struggle from the beginning in 2004, when the former Atlantic Coast Airlines, a profitable contract feeder for United Airlines, decided to go it alone as a carrier following Uniteds bankruptcy protection filing. In all, some 2,500 of 2,800 employees will be immediately laid off.
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DAVID FIELD: If you are an airline in desperate straits trying to avoid bankruptcy as Independence was for the last nine, ten, 12 months of its life, you need cash coming in just to pay your bills. You need cash flow. That's always been the case of a desperate airline.
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