United Seeks Piece of Independence Air

Independence Air, which filed for bankruptcy protection last month, has received another bid for its assets -- this one, from its former longtime partner, United Airlines.

United's parent, UAL Corp., which has been operating under bankruptcy protection for two years, said yesterday it wants to buy unidentified assets of Dulles-based Flyi Inc., which runs low-cost Independence Air.

In documents filed with U.S. Bankruptcy Court in Chicago, United sought the court's permission to place a confidential bid in the auction called by Flyi on Nov. 7.

United did not specify which assets it is seeking, and it asked the court to keep details of its bid confidential.

"To preserve United's competitive position in the Auction it is necessary to keep the description of the assets on which it is bidding" and the amount of the bid, "confidential," United said in the filing.

United is the second known bidder for Flyi, which has been losing money since it was formed in June 2004. Last week, The Washington Post reported thatMesa Air Group Inc., an Arizona-based regional carrier that tried to acquire the parent of Independence Air two years ago, is also bidding.

If its bid is successful, Mesa plans to fold Flyi into its overall operations and return it to its original form -- that of a regional feeder for a larger airline, sources told The Washington Post.

Flyi's predecessor, Atlantic Coast Airlines Holding Corp., operated as a feeder carrier for United from 1989 to 2004.

Jean Medina, a United spokeswoman, said last night that the Elk Grove Township, Ill.-based carrier is "seeking the formality of court approval to enable us participate in their auction should it move forward. However, we have not indicated what, if any, assets we may be interested in."

Rick DeLisi, a spokesman for Flyi, said last night: "We're not offering any comments on any of the bids. The process is designed to be conducted in confidence."

United, which is hoping to emerge from bankruptcy protection this winter, has a hub at Washington Dulles International Airport, where Flyi is based.

Flyi has complained that its financial problems are due in part to United's competitive response at Dulles, where it has added flights and matched fares.Flyi last month received approval from the U.S. Bankruptcy Court in Wilmington, Del., to auction all or part of its assets on Jan. 3. DeLisi said recently, however, that the airline has no deadline to complete the auction.

United asked the bankruptcy court in Chicago for permission to file under seal an exhibit that will offer details of its bid, according to yesterday's filing.

Washington Post Staff Writer Staff Keith L. Alexander contributed to this report.