Just a few days after Direct Air left thousands of passengers stranded, they have abruptly filed for bankruptcy protection in a Massachusetts court Thursday.
The South Carolina-based airline suddenly suspended flights on Monday afternoon and stranded some passengers who rely on them to shuttle them to tourist spots in the Southeast including Florida, Midwest and Northeast. They service 17 different cities throughout the U.S. including Niagara Falls and Myrtle Beach.
On their website, Direct Air announced that they would suspend service until May 15. Direct Air doesn’t actually own its own planes and instead relies on other carriers, Sky King and Xtra Airways, to conduct flights. Those two carriers stated they were cutting off service because of non-payment.
In light of these troubles, Direct Air retained a bankruptcy attorney and filed for debt protection on Thursday. Their Chapter 11 filing listed assets of $500,000 to $1 million with debts between $10 million and $50 million.
The company cited rising fuel prices as a reason for their financial problems, much like other airlines that have been forced to hire bankruptcy lawyers to help them restructure in the past.
Direct Air told passengers, who hold tickets, to contact their credit card companies for a refund. This halt comes in the wake of spring break.
Unforeseen circumstances or mismanagement can cause a business to become insolvent, which can be mitigated with the assistance of a bankruptcy lawyer.
