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Mon, Apr 28, 2008

A Brutal Market: EOS Airlines Files Chapter 11

Planned Investment Does Not Close, Carrier 'Forced' to Wind Down Operations

The tough times for niche carriers continues. Eos Airlines, a 'premium class' New York to London carrier has announced that it has filed a voluntary petition under Chapter 11 of the US Bankruptcy Code. The petition was filed April 26, 2008 in the US Bankruptcy Court in the Southern District of New York.

The airline planned to operate Saturday's Flight 6 (8:30pm) from JFK to STN. On April 27, 2008, Eos operated Flights 3 (1:00pm) and 7 (6:30pm) from STN to JFK. Flight 5 from STN to JFK and all flights from JFK to STN on April 27, 2008 were canceled.

Eos will immediately implement a reduction in its workforce, eliminating the positions of most of its employees, and is ceasing operations entirely, effective after April 27, 2008.

"After overcoming today’s extremely challenging economic and credit environment to negotiate terms for a round of financing, it is regrettable that we were forced to take this action," said Jack Williams, Eos CEO. "We had been clear since closing on our last round of financing that we would need additional capital. As difficult as it is to raise funds in the current environment, investors believe in our business model and we were on the verge of success.

"Unfortunately, just as we were working toward closing on an investment that would have carried us to corporate profitability in 2009, some issues arose that we could not overcome. It is regrettable that, even though investors continue to be enthusiastic about our business model, and even though we had a term sheet in hand, we were unable to close on the financing we needed. That leaves us with insufficient cash on hand to continue operations.

"There are times in business when even though you execute your business plan and even though your employees do their jobs beautifully, external forces prevent you from controlling your own destiny.

"I want to express my appreciation to our dedicated employees and to the many Guests who have become like family to us."

Eos is the second trans-Atlantic business-class carrier to fold in the past four months. As ANN reported, MAXJet filed for Chapter 11 bankruptcy on Christmas Eve; at that time, Eos picked up the slack by accommodating displaced MAXJet fliers on its planes.

FMI: www.eosclass.com, http://kccllc.net/eosairlines


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