Staff Leaves With Mementos and What-Ifs
By Bill Brubaker
Washington Post Staff Writer
Friday, January 6, 2006
There was an everything-must-go sale in Washington Dulles International Airport's Concourse A yesterday -- caps, T-shirts, pillows, blankets, mouse pads, model airplanes, all priced to move -- because the seller, Independence Air, really did have to go.
On the last day of the Washington area's homegrown low-fare airline, a company that carried more than 8 million passengers over 18 months but never figured out how to make money, Independence Air employees stood in a line 25 deep for a chance to grab some mementos.
"This is sort of sad," said pilot Bill Brown, clutching a clump of shirts with the Independence Air logo. "It would have been better if the boys who ran this airline had a better plan so we wouldn't all be here today, buying this stuff."
The airline's final day began in a fog, with many of its flights delayed for an hour or longer. It ended shortly before 9 p.m. as one of its relatively new Airbus A319 jets pulled into Dulles International Airport from Tampa.
In between, misty-eyed workers hugged, swapped e-mail addresses and spoke of job prospects and what-ifs. Lots of what-ifs.
What if Dulles-based Flyi Inc., which had begun life in 1989 as Atlantic Coast Airlines, a regional commuter carrier for United Airlines, had not broken away from United to become Independence Air? What if Flyi had not sold its seats so cheaply -- as low as $29 one way?
"We needed an angel to come rescue us," said Gordon Herndon, 80, a customer service representative who came to the company nine years ago after a career in publishing. "We needed a Bill Gates to come in and buy us."
The shutdown came two months after Flyi filed for Chapter 11 bankruptcy protection and a year after it first warned of trouble, citing record fuel prices and an unrelenting response by competitors. Two rivals, JetBlue Airways and United Air Lines, promptly sought job applications from furloughed Flyi workers.
"This is one of the saddest days of my life," senior customer service representative Peggy Anstead Hudson said at Dulles Airport's Gate B26 as a regular Flyi passenger approached with tears in her eyes.
"I love this airline. Your service is fabulous," Kate Williams of Leesburg said. "I just called my girlfriend to say: 'Can you believe this? I'm at the airport crying.' "
Two airlines, United and Mesa Air Group Inc., had showed interest in bidding for some Flyi assets, but neither wanted to operate Independence as a stand-alone carrier.
Wall Street analysts and the realists among Flyi's 2,700 employees were not surprised. The airline simply had burned through too much cash.
"They went into a cost-savings program maybe three months ago, telling us things like, 'Don't waste paper,' " pilot Brown said. "But it was too late."
Atlantic Coast Airlines was a moneymaker when it was aligned with United, receiving a fixed fee for every departure. In late 2002, however, United filed for bankruptcy protection and decided to cuts the fees it paid its regional partners.
By then, Atlantic Coast chief executive Kerry B. Skeen had posed this question to his board members in a presentation: "Seize Opportunities or 'Hunker Down'?"
That question, according to internal company documents, was followed by another: "Does there exist a profitable, defensible niche for a low-fare, low cost airline using regional jets?"
The risks of starting over with an "unknown brand" were many, the presentation on July 31, 2002, suggested. The plan that emerged from that meeting was code-named "Goldilocks."
Just as Goldilocks had declared the three bears' porridge "too cold" and "too hot" before settling on a bowl that was "just right," Atlantic Coast Airlines "was trying to find something that wasn't too big, wasn't too small but was just right," said pilot Kevin P. Moore, who joined the company in 1993.
Under Goldilocks, the airline would flood the market with short-hop, low-fare flights on 50-seat regional jets that Atlantic Coast already owned or leased, then add longer-haul service on new Airbus jets as the company grew.
But the regional jets were "ill-suited to making money," Moore said, because they are expensive to operate and designed for business travelers willing to pay higher fares.
"We started the business with the equipment we had, not what we wish we had," said Moore, whose final schedule yesterday included runs to Orlando International Airport and New York's La Guardia Airport. "It was a risky proposition, but it was a balanced risk against staying with the United operation, which was pretty much believed to be a dead end."
Former Flyi pilot Katie Pribyl, who was furloughed last March, said the airline simply flew too many 50-seat jets -- it started with 87 -- to too many cities -- 47 early on.
"I remember flying from Dulles to Providence, Rhode Island, one morning in the fall of 2004 and we had zero passengers," she said. "We couldn't cancel the flight because we had 20 passengers to bring back from Providence. I remember thinking: We can't sustain this very long."
The passenger totals increased but not enough to rescue the airline.
Many Flyi workers do not have jobs lined up, though yesterday the company received bankruptcy court approval to pay $4.4 million in salary and bonuses to 165 workers who will help the operation wind down.
In Concourse A, Bill Race, who headed the airline's baggage and ticket counter operations, waxed philosophic as he bid farewell to Rick DeLisi, the company's public relations director.
"All things must end," Race said, shaking hands with his soon-to-be former colleague. "And when one door closes, another one usually opens."
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