Western Pacific Airlines, a 2 1/2-year-old startup airline promoted as an aggressive, low-fare carrier to major cities, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court on Monday.
The airline will continue to fly and is actively negotiating a letter of intent for "debtor in possession" financing, Western Pacific CEO Robert A. Peiser said.The airline's filing stays creditors' claims until it can reach an overall agreement with all of its creditors. The result is to allow Western Pacific to continue operating.
The fast-growing airline, which inaugurated its schedule on May 30, 1995, with a flight from Colorado Springs to San Francisco, hopes the filing will allow uninterrupted service.
The abrupt resignation last Friday of four members of Western Pacific's board of directors has caused deep concern, Peiser said.
Less than a week after a merger with Frontier Airlines failed, four members of Western Pacific's seven-member board, Ivan Irwin Jr., Jim Wilkert, Glenn Stinchcomb and Clay Bennett, stepped down. They said they did so "to avoid potential conflicts of interests" between WestPac and their business interests.
The resignations added to the troubles of the airline that reported a net loss of about $17 million in the April-to-June quarter this year, just prior to its shift of the bulk of its operation from Colorado Springs to DIA.
WestPac officials, and airport officials at Colorado Springs had vowed to keep the line there and to draw Denver passengers there because of lower rates.
The airline's first CEO, chairman and president, Ed Beauvais, envisioned the central location at Colorado Springs as a "true hub," much as United Airlines does at Denver International Airport.
But no low-fare airline has ever successfully created a hub in the interior of the United States, records show.