Silver Airways filed for bankruptcy at the end of December.
After American Airlines dropped them as a codeshare partner last year, and the carrier stopped flying north of Greenville-Spartanburg in South Carolina, and I said they were bleeding cash. The carrier took strenuous objection, blowing up my email with unpleasantries. I turned out to be correct.
Now in bankruptcy there seems to be concern about their proper handling of money, including government-mandated payments.
- Airlines collect airport fees from passengers when selling tickets, and remit those fees to the airports.
- Those ‘passenger facility charges’ (PFCs) aren’t the property of the airline, they are held for the airport.
- But it seems that Silver hasn’t been great about proper handling of these funds.
According to a motion filed by the City of Tallahassee on behalf of its airport, Silver Airways’ bankruptcy counsel has been non-responsive about PFCs.
Tallahassee airport (through the city) has gone to the bankruptcy court, asking them to direct Silver Airways to create a separate bank account for passenger facility charges in order to segregate those funds, to regularly remit those funds owed to airports, and to provide regular reporting of deposits and payments from that account. They also want the court to order that those funds not be used as security for any credit agreement.
The docket shows similar filings by Key West, Tampa and San Juan airports. It seems that while Silver Airways has been charging passengers for PFCs on behalf of the airports where they operate, there’s concern over what’s happening to the money.
Credit: Silver Airways
Anguilla already kicked out Silver Airways over $103,000 in unpaid airport fees. Even before bankruptcy, Silver hadn’t been paying rent at its Fort Lauderdale hub and faced eviction after running up a seven figure tab.
Silver airlines owed me reimbursement for hotel stay due to 5 hours flight delay since 10/23. They never intended to pay but keep stringing me along.
Worse Airline
To avoid any problems with those fees the FAA should have a rule requiring those fees to be automatically put in a segregated (or escrow) account immediately upon receiving the ticket payment. Yes, I can already see a response complaining about governmental rule making, but having it as an operational requirement would avoid all of these subsequent court motions and appearances, which would be better
That PFC money is probably long gone in the pile of cash they were burning through.
Doesn’t paint a rosy picture for the airline’s odds of survival beyond Chapter 11.
Silver has to be a very poorly run company, They held a monopoly on many routes for years (FLL-TLH for one) until JetBlue began service. Many of their routes to the Bahamas out islands are monopoly as well except for AA Eagle out of MIA.
Me thinks their undoing came from expanding to places like Charleston and GSP that have plenty of competition.
Obviously, they burned through a pile of cash.