washingtonpost.com  > Business > Industries > Transportation
Page 3 of 3  < Back  

Independence Confronts More Bleak Numbers

There's at least one bright spot for Flyi: More people are trying out the airline.

The company said its load factor -- industry jargon for the percentage of seats an airline fills -- was 68.6 percent in April, down from 70.7 percent in March but better than the numbers posted in February (62.9 percent) and January (45.7 percent).

Independence Air has been putting a happy face on its cut-rate service, but financially, the carrier is doing badly. (Alex Wong -- Getty Images)

Skeen said the airline will have to achieve a load factor in the "mid- to high-70-percent" range to even approach the break even level.

Flyi's stock price also must rise, Skeen said. But, he said, "I don't pay a lot of attention watching the stock price. The stock will take care of itself as long as we continue to execute."

Nasdaq generally requires the companies it lists to maintain a minimum share price of $1. Nasdaq can begin delisting proceedings if a company's stock price stays below $1 for 30 consecutive trading days, though grace periods often are granted.

On April 29, as Flyi's stock sold for 73 cents a share, the airline asked shareholders to give its board of directors the authority to declare a reverse stock split if necessary.

A reverse split reduces the number of shares outstanding and increases the price of each share of stock. In a 1-for-10 split, for example, an investor with 1,000 shares worth 75 cents each ends up owning 100 worth $7.50 each. The split, which has no affect on the value of stock holdings, is used by companies seeking to avoid delisting and to put a better face on the company's financial performance.

Flyi, in a recent public filing, said delisting would require the company to repurchase the $125 million in 6 percent convertible notes -- due in 2034 -- at 100 percent of their principal amount plus any damages. That, the filing said, could "adversely impact" Flyi's "ability to attract the interest of investors and to maximize stockholder value."

Skeen said yesterday, as he has before, that he would not rule out Flyi abandoning its low-cost model to return to its roots as a feeder carrier.

"We will consider everything," he said. "In this environment . . . we always look at opportunities."

< Back  1 2 3

© 2005 The Washington Post Company