The chief of Independence Air's hub at Washington Dulles International Airport has resigned to work at a rival low-cost carrier, a blow to the financially troubled airline.
Rick Pelc, a key figure at Independence since its launch 15 months ago, took over Monday as head of AirTran Airways' hub at Hartsfield-Jackson Atlanta International Airport.
His resignation follows predictions by Wall Street analysts that Independence Air's parent, Flyi Inc., which has been stung in recent months by rising fuel prices, will soon file for bankruptcy protection. The company's stock, which closed at 29 cents yesterday, has lost 95 percent of its value since Independence began service June 16, 2004.
"It sounds like he's bailing out," Betsy R. Snyder, an airline analyst at Standard & Poor's, said when she learned of Pelc's departure.
And, to cut losses, Flyi plans to discontinue its daily Airbus service from Dulles to Los Angeles on Oct. 1.
Pelc, 51, said Flyi's troubles did not figure in his decision.
"It was all about the great opportunity that AirTran presented," said Pelc, who came to Flyi after a 26-year career at US Airways, where at various times he headed the carrier's operations in Philadelphia and Charlotte. "It's an airline with a lot of growth potential, and Atlanta is the busiest airport in the world."
Flyi named Leo Malloy, the company's service performance director, to replace Pelc.
"Leo Malloy is more than capable of doing as good a job and potentially even better" than Pelc, said Rick DeLisi, Flyi's spokesman. He declined to comment on Pelc's departure.
Independence Air sold about 75 percent of its seats this summer, and it has scored well in some recent independent customer satisfaction surveys.
But Snyder predicted a Chapter 11 filing "in the very near future, and it's because of fuel prices." She added, "I think it's a pretty dire situation."
According to DeLisi, Flyi is paying about $2.40 a gallon for jet fuel, more than double what it paid when the airline began service last year.
Flyi has not decided whether to file for bankruptcy protection, DeLisi said. "We are continuing to consider all possibilities and explore all avenues to improve liquidity and strengthen the financial outlook of the company," he said.
Besides cutting the Dulles-Los Angeles service, Flyi earlier had announced plans to drop its flight from Dulles to San Diego at the end of this month. Service to San Jose was cut last month.
"It's all about fuel. Flying to L.A. burns a lot of fuel, and we're not seeing average fares that cover that," Jeff Pollack, Flyi's senior director of market planning, wrote in a recent employee newsletter. "We burn about 3,500 gallons on a trip to the West Coast, and since fuel is up by a dollar in recent months, that's another $3,500 per trip we need to recoup. The current fares people are willing to pay to the West Coast just aren't able to cover the expense of flying there."
Flyi plans to use that jet on an eastern route that should be more profitable, DeLisi said. "The jet will be able to make three round trips in about the same span of time" as the single West Coast flight, he said.