Independence Air - Decline

Decline

After its emergence as an independent brand name, Independence Air became known for offering very low airfares: as little as $29 one-way to Florida from Washington Dulles International Airport. However, the company never overcame a series of financial problems during its transition, and its decline started only six months after its launch.

In February 2005, one of its aircraft was repossessed after the company missed a lease payment, after trying and failing to restructure the lease. Later that year, three more aircraft were sold or repossessed and in November 2005, FLYi, Inc., their parent company, declared bankruptcy. The company cited rising-costs in the airline industry as the reason its low-cost strategy did not succeed.

In the intervening months between FLY I's declaration of bankruptcy and Independence Air's cessation of operations, a number of airlines expressed an interest in acquiring the airline's assets including: Mesa Air Group, United Airlines and Richard Branson.

Not finding a suitable buyer in time to keep the planes flying, Independence Air announced on January 2, 2006, that it would cease operations at 7:26 p.m. UTC-5 on January 5, 2006 following a flight from Westchester County Airport in New York. When the airline ceased operations, it employed more than 2,500 staff, many of whom had been with the airline since its inception as Atlantic Coast Airlines. Over its 18 months of operation, Independence carried more than 8 million passengers.

On March 10, 2006, Northwest Airlines bought the operating certificate of Independence Air for $2 million to establish a new regional airline. On March 29, 2006, Northwest reported that Independence Air would be renamed Compass Airlines. The first flight route would be a twice daily service between Washington Dulles International Airport and Minneapolis-Saint Paul International Airport beginning in early June 2006.