State of the Airlines

Monday, February 28, 2005

NEWS: FLYi - Make a Deal?

Investment group East Texas Capital Partners is encouraging FLYi to seek opportunities to merge or sell the valiant but struggling Independence Air. East Texas Capital owns about 1% of the carrier. They are not the first investment group to encourage FLYi to pursue this course. Par Capital Management, a 10% stakeholder, suggested this very idea last November. Both groups feel that looking for a way to merge or sell the airline is the best way to protect the shareholders interests...shareholders....oh right that would be them.

Sadly they may be right. It was a bold move for Atlantic Coast Airlines to strike out on its own as Independence Air instead of being a regional feeder for United. Times were not great but they saw a reasonable opportunity. But fuel prices were the wild card they did not count on and competition is coming at them from all angles. Even Delta is positioning itself to compete. So, perhaps, Indy Air must go.