Direct Air parent files for bankruptcy protection

Associated Press

NEW YORK (AP) — Just three days after abruptly stopping service and leaving travelers stranded, the parent of discount airline Direct Air has filed for bankruptcy protection.

Southern Sky Air & Tours LLC late Thursday filed for Chapter 11 protection in Massachusetts. Court documents show the company has between $10 million and $50 million in debt and just $500,000 to $1 million in assets. The company has not yet filed several documents required by the court as part of the bankruptcy filing process, including a list of its top 20 creditors. The airline said it has 100 to 200 creditors, which could include everything from fuel suppliers to airports.

The airline abruptly stopped flying Monday afternoon — at the peak of the spring break travel season — apparently because it couldn't pay its fuel bills. Direct Air, based in Myrtle Beach, S.C., says it will not fly again until May 15. Ticket holders were told to contact their credit card companies for refunds.

Direct Air began flying in March of 2007. It serves 17 cities in the Midwest, East and South — mostly smaller markets where big airlines don't fly. It's faced increased competition in recent years from a number of discount carriers including Spirit, Allegiant and Southwest. Rapidly accelerating fuel prices this year were also a culprit in the company's filing.

An attorney for Direct Air did not immediately return a telephone call seeking comment on the bankruptcy filing.

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