Dierct Air - Management & Marketing Mistakes
The following case study employs the array of industry metrics discussed above to determine major factors that contributed to Direct Airways filing for Chapter 11 bankruptcy during the time period from 2007-212. This time period was chosen because SEC filings at that time available, providing valuable insight into the stark differences between the two airlines. Direct Airways was a major U.S. carrier that was founded in 2001 and operated for 7 years until it fell into bankruptcy in 2001. This terminated an unrestrained years for Direct Airways, which filed for Chapter 11 bankruptcy last year of 2012 (Jayanti).
I understood that already the subject of a federal investigation by transportation regulators, the outdated charter service Direct Air long ago would soon may be facing a far-reaching investigation of its finances by the bankruptcy trustee (Bomkamp). The lawyer governing Direct Air's bankruptcy went ahead and asked a judge for approval to interview under oath all of the people that were connected with the company and to force the company's banks and professional services firms to turn over financial statements and other records. Worcester lawyer Joseph H. Baldiga, the trustee chosen to supervise Direct Air's liquidation, mentioned in a motion that had been filed in U.S. (Lavery). Bankruptcy Court here yesterday that he needs approval to do so in order to get a glimpse into potential fraud and embezzlement of funds leading up to the company's sudden collapse in late March (Bomkamp).
In his motion, Mr. Baldiga made the point that he and his staff have been "examining the many allegations of fraud that had been raised by interested parties" (Bomkamp) during the bankruptcy case, and that he "believes that this is the reason for the misappropriation and transfers of significant sums of money may have been made by the borrower or its managers previous to the petition date."
Just three days after shortly stopping service and leaving explorers stranded, the parent of discount airline Direct Air went ahead and then filed for bankruptcy security. Southern Sky Air & Tours LLC then moved along to file for Chapter 11 protection which would late Thursday in Worcester, Mass. Court forms show the corporation has some where among $10 million and $50 million in debt and just $500,000 to $1 million in assets (Bomkamp). Since this case study, the company has not yet really filed a list of its top 30 creditors. The airline did mention that it had somewhere around 100 to 200 creditors, which could contain everything from energy dealers to airports.
Figure 1 this graph shows that part of Direct Air bankruptcies was due to bankruptcies.
The research shows that on a Monday this airline abruptly stopped flying during the middle of the afternoon -- and all of this happened to be at the peak of the spring break travel season - apparently because it could not pay its fuel bills (Baran). Direct Air, which was founded in Myrtle Beach, S.C., at the time made the statement that it would not fly again until May 15. During that time all ticket holders were told to contact their credit card companies to get all of the refunds back (Gutc). Direct Air started its flying process somewhere in March 2007. During the time it brought service to about East, Midwest, and South. It has gone through increased rivalry in recent years from a lot of discount carriers and that includes Spirit, Allegiant, and Southwest. Rapidly quickening fuel charges this year were also an offender in the business's filing (Lavery).
Figure 2 one of causes of bankruptcy at Direct Airways was the decline with passengers.
Background Information
Southern Sky Air Tours, which is also known as Direct Air was an airline corporate that was first started in Myrtle Beach, South Carolina, in the United Sates (Gutc).Direct Air actually begin is major missions trips in 2007 and rents aircraft with contract airlines. Its key base during that time was in Myrtle Beach International Airport. Most of the Direct Air's flights had been operated by Sky King, Inc., Xtra Airways, World Atlantic Airlines, and USA Jet. In March 2012 Direct Air stopped maneuvers, marooning a lot of its passengers (Lavery). The airline intended to restart procedures on May 15, 2012, (Baran) even though this was disputed by the U.S. Department of Transportation (Lavery) The charter carrier was the topic to Chapter 7 closing on April 12, 2012. (Bummer: Direct Air Files for Bankruptcy and REDjet Cancels All Flights ) Direct Air's flights are now operated primarily by principal platers such as Sky King and Xtra Airways, Inc. Boeing 737-400 aircraft. Sometimes, particularly throughout peak travel periods, extra other working aircraft and carriers and types are being utilized. These have comprised Dynamic Airways, Vision Airlines, USA Jet, and Miami Ai (Bomkamp)r.
On March...
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