Last week I discussed the dilemma facing Independence Air, suggesting that a business model predicated on both regional jets and low fares was unlikely to survive.
Independence Air filed for bankruptcy today. There’s been much speculation about when this would happen, so my writing on the subject was hardly prescient.
The airline plans to hold a court-supervised auction, hoping that a buyer can be found during the next 60 days. They have $24 million in unrestricted cash which they believe will be sufficient to fund operations during this time.
I don’t have a prediction on whether or not the airline will find a buyer. Prudence would suggest not, but the old joke about how to become a millionaire quickly comes to mind…
Start out with a billion dollars and invest in an airline.
There seems to be endless streams of capital which flow towards ill-fated airline operations. (Anyone interested might just keep an eye on eBay, entire airlines do tend to pop up there now and again.)
I may squeeze in one more post before my guest stint ends later today. If not, my sincere thanks to Tyler and Alex for inviting me to guest blog, and to all of the Marginal Revolution readers who sent me notes and questions. The quality and thoughtfulness of those emails was really quite astounding!