Vanguard Airlines is filing for bankruptcy. They were denied the $35 to $40mm in federal loans they were seeking. Thank goodness this airline is being allowed to die. They’ve been operating on less than $200,000 cash on hand for some time. They never had a profitable route system or strategy.

Unfortunately, Midway Airlines wasn’t allowed to just die. It was in bankruptcy proceedings — for the second time — on September 11th. They suspended operations immediately thereafter. Immediately after 9/11 the feds gave direct cash payments to airlines based on previous year’s traffic to make up for time lost while the nation’s airways were shut down. Since Midway had been in the air the previous year, it got cash. The bailout funded the airline’s ability to get back in the air. It was unfortunate, because this twice-failed airline had no viable business plan.

It turns out that Midway couldn’t survive. It has suspended operations and will re-emerge as a USAirways Express carrier.